What are the best mutual funds in Canada?

The best mutual fund depends on your goal, time horizon, and risk tolerance. For long-term growth, broad Canadian or global equity funds with low MERs are generally preferred. For conservative investors, balanced or bond funds are more appropriate. Rather than chasing past performance, focus on low MER, consistent long-term returns relative to benchmark, and a fund mandate that matches your goals. Index mutual funds from providers like TD (e-Series) and RBC often outperform actively managed funds over time due to lower fees.

Are mutual funds a good investment in Canada?

Mutual funds can be a good investment if you choose low-cost options (index funds or ETFs) and hold them in registered accounts. High-MER actively managed mutual funds have a poor track record of beating their benchmarks after fees over 10+ years — SPIVA Canada scorecards consistently show 80–90% of active funds underperform their index over 15 years. Index mutual funds and ETFs give you market returns minus a very small fee, which outperforms most active funds long term.

What is the minimum to invest in a mutual fund in Canada?

Minimums vary by institution and fund. TD e-Series funds can be purchased with as little as $100 for a systematic investment plan. Most bank branch mutual funds require $500–$1,000 to start with a minimum $50–$100 for monthly contributions. Some advisor-sold funds have higher minimums.

Which Canadian bank has the best mutual funds?

TD is widely regarded for its e-Series index mutual funds — a low-cost option with MERs around 0.30%–0.50%, available through TD Direct Investing or TD Easy Invest. These track major indices (Canadian, US, international) and are among the most cost-competitive mutual funds from a Canadian bank. RBC also offers index-tracking mutual funds. For active funds, no single bank consistently outperforms peers after fees.

Should I choose a mutual fund or an ETF?

If you invest through a robo-advisor or discount brokerage, ETFs are usually better — lower fees, same diversification. If you invest through your bank or a financial advisor and want automatic monthly contributions without thinking about trading, a mutual fund (especially an index series) works well. The key is keeping fees low — below 0.5% if possible, under 1% as a maximum for most investors.

Best Mutual Funds in Canada for 2026

Finding the best mutual fund in Canada means matching the fund to your goal, time horizon, and tolerance for fees — then staying invested. This guide covers the top fund categories, standout options by type, and what to look for when comparing Canadian mutual funds.

What Makes a Mutual Fund “Best” for Canadians?

Rather than simply chasing the highest past returns, consider these factors:

MER (Management Expense Ratio): Lower is almost always better. High fees directly reduce your return.
Benchmark performance: Does the fund consistently beat its index after fees? (Most active funds don’t.)
Investment mandate: Does it match your goal — growth, income, preservation, or balance?
Tax efficiency: Bond and dividend funds generate annual distributions — better held in an RRSP or TFSA.
Minimum investment and contribution options: Can you start with what you have?

Best Low-Cost Index Mutual Funds in Canada

Index mutual funds track a market index (like the S&P/TSX Composite or S&P 500) passively. They consistently outperform most actively managed funds over long periods because of lower fees.

TD e-Series Funds

TD’s e-Series are among the most recommended low-cost mutual funds in Canada, primarily available through TD Direct Investing or TD Easy Invest.

Fund	Index Tracked	MER
TD Canadian Index – e (TDB900)	S&P/TSX Composite	~0.33%
TD US Index – e (TDB902)	S&P 500	~0.35%
TD International Index – e (TDB911)	MSCI EAFE	~0.50%
TD Canadian Bond Index – e (TDB909)	FTSE Canada Universe Bond	~0.50%

These funds allow Canadians to build a complete globally diversified portfolio inside an RRSP or TFSA at very low cost.

RBC Index Funds

RBC offers a similar suite of index mutual funds available to RBC banking clients, with MERs generally in the 0.5%–0.70% range — slightly higher than TD e-Series but still far below active fund MERs.

Best Canadian Equity Mutual Funds

For exposure to Canadian stocks:

Fund	Focus	5-Year Return (Approx.)	MER
TD Canadian Index – e	S&P/TSX Composite	Market return	~0.33%
Mawer Canadian Equity	Active, quality-focused	Competitive vs. benchmark	~1.30%
Beutel Goodman Canadian Equity	Deep value, long-term	Historically strong	~1.00%

Note: Past returns do not guarantee future results. MERs and returns are approximate and subject to change.

Mawer and Beutel Goodman are independent fund managers — not bank-owned — with strong long-term track records. They are among the few active managers that have consistently added value after fees.

Best Balanced Mutual Funds in Canada

Balanced funds hold a mix of stocks and bonds — typically 60% equity / 40% fixed income or a variant. They suit moderate-risk investors who want one-stop diversification.

Fund	Allocation	MER
Mawer Balanced Fund	~65% equity / 35% bonds	~1.14%
Steadyhand Founders Fund	~70% equity / 30% bonds	~1.34%
Vanguard Balanced ETF Portfolio (VBAL)	60/40	~0.24% (ETF, not mutual fund)

VBAL is included for comparison — it is an ETF rather than a mutual fund, but it illustrates the dramatic MER difference available through ETF products.

Best Bond Mutual Funds in Canada

Bond funds are appropriate for conservative investors or as the fixed income component of a portfolio.

Fund	Index/Focus	MER
TD Canadian Bond Index – e	FTSE Canada Universe Bond	~0.50%
Beutel Goodman Income Fund	Active investment-grade bonds	~0.90%
RBC Bond Fund	Broad Canadian bonds, active	~1.50%

For fixed income in Canada, index options like the TD e-Series bond fund typically outperform active bond funds after their lower fees.

Actively Managed vs. Index Mutual Funds: The SPIVA Evidence

SPIVA Canada reports (published by S&P Global) track how actively managed Canadian funds perform against their benchmarks after fees. Results are consistently sobering for active management:

Over 15 years, approximately 85–90% of Canadian equity funds underperform the S&P/TSX Composite Index
Global equity funds have similar underperformance rates
Bond funds fare slightly better in the short run but also mostly underperform over longer periods

This is why most Canadian personal finance guidance now defaults to recommending index funds or ETFs for the core of a portfolio.

Where to Buy the Best Mutual Funds in Canada

TD e-Series: TD Direct Investing or TD Easy Invest (requires a TD chequing or savings account)
Mawer funds: Available through most discount brokerages and advisors
Beutel Goodman: Available through advisors; institutional minimum for some series
RBC index funds: RBC Direct Investing or RBC branch
ETF alternatives: Available at Questrade, Wealthsimple Trade, CIBC Investor’s Edge, National Bank Direct Brokerage (commission-free ETF purchases)

Key Takeaways

Low-cost index mutual funds (TD e-Series, RBC index) consistently outperform most active mutual funds after fees
MER is the most important factor — every 1% in fees reduces your 30-year portfolio value by roughly 25%
Mawer and Beutel Goodman are among the few active managers with long records of outperformance
ETFs offer even lower costs — compare our ETF vs mutual fund guide before deciding
Hold all mutual funds in registered accounts (RRSP, TFSA) to shelter distributions from annual tax