Best Mutual Funds Canada 2026: Low-Fee Picks (vs ETFs)

The best mutual funds in Canada, judged on cost, are a short list: TD’s e-Series index funds and Tangerine’s Core Portfolios. This guide compares their fees with typical Canadian mutual fund fees and with index ETFs, explains how to invest in mutual funds step by step, and shows what the fee gap costs over 30 years.

Fees checked on October 7, 2026. YieldMaple checked TD Asset Management’s Fund Facts documents for the four core e-Series index funds and Tangerine’s Core Portfolios page on October 7, 2026: TD’s funds had annual fund expenses of 0.22% to 0.49% (as of December 31, 2025), and every Tangerine Core Portfolio showed a 1.06% MER.

Best mutual funds in Canada at a glance

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Low-fee Canadian mutual funds vs index ETFs (checked October 7, 2026)

Feature	Annual cost	What it holds	Type
TD Canadian Index Fund e-Series	0.22% (better on this row)	Solactive Canada Broad Market Index	Index mutual fund
TD U.S. Index Fund e-Series	0.28%	Solactive US Large Cap Index	Index mutual fund
TD Canadian Bond Index Fund e-Series	0.40%	Solactive Broad Canadian Bond Universe TR Index	Index mutual fund
TD International Index Fund e-Series	0.49%	developed-market large- and mid-cap stocks outside North America (a Solactive index)	Index mutual fund
Tangerine Core Portfolios (all five)	1.06%	Balanced Income, Balanced, Balanced Growth, Equity Growth and Dividend	All-in-one index mutual fund
XEQT (for comparison)	0.19%	Global stocks in one fund	All-in-one ETF
XIC (for comparison)	0.06%	Broad Canadian stock index	Index ETF

TD figures are total fund expenses (MER plus trading expense ratio) as of December 31, 2025, from each fund's Fund Facts. Tangerine MER from tangerine.ca. ETF MERs from the fund providers. Checked October 7, 2026.

TD Canadian Index Fund e-Series is the cheapest fund in the table at 0.22% a year and tracks the Solactive Canada Broad Market Index. TD U.S. Index Fund e-Series costs 0.28% and tracks the Solactive US Large Cap Index. TD Canadian Bond Index Fund e-Series costs 0.40% and tracks the Solactive Broad Canadian Bond Universe TR Index, and TD International Index Fund e-Series costs 0.49% for developed-market large- and mid-cap stocks outside North America (a Solactive index). Tangerine’s five Core Portfolios (Balanced Income, Balanced, Balanced Growth, Equity Growth and Dividend) each charge 1.06%. For comparison, the all-in-one XEQT ETF charges 0.19% for global stocks, and XIC charges 0.06% for the broad Canadian stock market.

What are the lowest-fee mutual funds in Canada?

The lowest-fee mutual funds in Canada that YieldMaple checked are TD’s e-Series index funds, at 0.22% to 0.49% a year, followed by Tangerine’s Core Portfolios at 1.06%. Both are index products.

1. TD e-Series funds

TD e-Series is a series of TD Asset Management’s index mutual funds covering Canadian, U.S. and international stocks and Canadian bonds. Per the Fund Facts, the series carries no sales charge (no-load), TD pays no trailing commission (TD Asset Management does not pay one on e-Series units), and the minimum is $100 initial; no minimum subsequent investment. That low minimum is the practical advantage over ETFs: small automatic purchases every payday buy exact dollar amounts.

Strengths:

• The lowest annual cost of any mutual fund family in this guide
• Four building blocks (Canadian, U.S., international, bonds) for a do-it-yourself index portfolio
• No sales charge and no trailing commission

Drawbacks:

• Still more expensive than equivalent ETFs: TD Canadian Index Fund e-Series costs 0.22% against 0.06% for XIC, and TD U.S. Index Fund e-Series costs 0.28% against 0.08% for VFV
• A short-term trading fee of up to 2% of the purchase cost if you redeem or switch within 30 days
• Four funds to hold and rebalance yourself, unlike an all-in-one portfolio

Which TD accounts can hold e-Series units, and how to order them, is set by TD; confirm the current options with TD before opening an account.

2. Tangerine Core Portfolios

Tangerine sells five all-in-one index portfolios. Each is a single fund that Tangerine says is reviewed quarterly and rebalanced as needed, so there is nothing to rebalance yourself.

Tangerine Core Portfolios (checked October 7, 2026)

Feature	Target mix	MER
Balanced Income Portfolio	30% stocks, 70% bonds	1.06%
Balanced Portfolio	60% stocks, 40% bonds	1.06%
Balanced Growth Portfolio	75% stocks, 25% bonds	1.06%
Equity Growth Portfolio	100% stocks, 0% bonds	1.06%
Dividend Portfolio	100% stocks (dividend-paying companies worldwide), 0% bonds	1.06%

Source: Tangerine Core Portfolios page, checked October 7, 2026. Tangerine notes the percentages may change slightly over time.

The Balanced Income Portfolio targets 30% stocks, 70% bonds, the Balanced Portfolio 60% stocks, 40% bonds, the Balanced Growth Portfolio 75% stocks, 25% bonds, the Equity Growth Portfolio 100% stocks, 0% bonds, and the Dividend Portfolio 100% stocks (dividend-paying companies worldwide), 0% bonds. Every one carries the same 1.06% MER. Tangerine says a fund’s expenses are made up of the management fee (which includes the trailing commission), operating expenses, trading costs and a fixed administration fee; for the Core Portfolios the management fee is 0.80% and the administration fee is 0.15%. Tangerine’s separate Global ETF Portfolios charge a lower 0.50% management fee.

Tangerine is also running a new-money offer of 2% (up to $20,000 per account) on a net investment of $25,000 or more, open July 8 to October 30, 2026 and paid in equal monthly payments over 30 months, as extra fund units in TFSAs, RSPs and non-registered accounts. Read the offer terms on Tangerine’s site before moving money for it.

Strengths: one fund is a whole portfolio, automatic rebalancing, and purchases straight from a Tangerine account.

Drawbacks: the 1.06% MER is several times XEQT’s 0.19%, and the gap compounds over decades (see the worked example below).

3. RBC and Scotiabank index funds

RBC and Scotiabank also sell index mutual funds that cost less than their actively managed funds. YieldMaple did not re-check their MERs for this update, so they are not ranked here; each fund’s Fund Facts document lists its current MER.

Are mutual funds or ETFs cheaper in Canada?

Index ETFs are cheaper than the lowest-cost mutual funds in this guide: XEQT charges 0.19% and XIC 0.06%, versus 0.22% to 0.49% for TD e-Series. The gap looks small in a single year but compounds.

Worked example. Take a $100,000 lump sum, an assumed 6% yearly return before fees, 30 years and no further contributions. Returns are hypothetical; only the fees are real.

In this example, XEQT ends about $220,000 ahead of the example fund charging 2.00%, and about $119,000 ahead of a Tangerine Core Portfolio. TD Canadian Index Fund e-Series lands within about $5,000 of XEQT, which makes e-Series the mutual fund family in this guide closest to ETF pricing. The Ontario Securities Commission says mutual fund MERs run from less than 1% to more than 3%, so the 2.00% example is not an outlier.

Mutual funds still have real conveniences: exact dollar purchases, automatic contributions from a bank account, and no brokerage account needed. The best Canadian ETFs guide covers the ETF side, and the VFV vs XEQT comparison compares two of the most-held ones.

Why do Canadian bank mutual funds cost so much?

Many branch-sold bank mutual funds cost more because the MER pays for active management and, in many series, a trailing commission to the dealer that sold the fund. The Ontario Securities Commission puts typical trailing commissions at 0.25% to 1.5% a year and mutual fund MERs at from less than 1% to more than 3%.

Other charges to look for in a fund’s Fund Facts:

• Front-end sales charge: up to 5% of the amount invested, per the OSC.
• Deferred sales charges: the DSC purchase option was banned in Canada on June 1, 2022, although units bought before then can still carry a schedule.
• Short-term trading fees: for example, TD e-Series charges up to 2% of the purchase cost if you redeem or switch within 30 days.

Self-directed platforms have moved away from trailer-paying series. TD Direct Investing, for example, now offers only mutual funds without trailer fees (since June 1, 2022).

To see what a fund costs in dollars, multiply its MER by the balance. On a $50,000 balance, a 2.00% MER costs about $1,000 a year, Tangerine’s 1.06% costs about $530 a year, and XEQT’s 0.19% costs about $95 a year.

How to invest in mutual funds in Canada

Investing in mutual funds in Canada takes five steps: pick the account, pick where to buy, read the Fund Facts, place the order, and automate contributions.

1. Pick the account type. Mutual funds fit in a TFSA, RRSP, FHSA or non-registered account; CRA lists TFSA-eligible investments as cash, mutual funds, securities listed on a designated stock exchange, GICs, bonds and certain shares of small business corporations. The TFSA vs RRSP guide explains which account suits which goal.
2. Pick where to buy. Options are the fund company or bank directly (Tangerine sells its portfolios from a Tangerine account), a bank branch advisor, or a self-directed brokerage. Brokerage mutual fund commissions differ: TD Direct Investing charges $0 commission to buy, sell or switch (a short-term redemption fee may apply within 30 days), RBC Direct Investing $0 commission (full-suite accounts; not available in GoSmart), BMO InvestorLine no commission to buy, sell or switch, CIBC Investor’s Edge $6.95 per purchase or redemption ($0 on money market funds and regular investment plan purchases), and Questrade $9.95 per trade.
3. Read the Fund Facts. This short document lists the MER, any sales charge, trailing commission and short-term trading fee. Compare the MER with an index alternative before buying.
4. Place the order. Mutual fund orders are in dollars, not shares, and fill at the fund’s end-of-day price. Minimums vary, for example $100 initial; no minimum subsequent investment for TD e-Series and, at National Bank Direct Brokerage, $0 commission, with a $1,000 minimum first purchase per fund ($500 after that, or the fund company's minimum if higher).
5. Automate contributions. A pre-authorized purchase plan buys the same dollar amount each week or month, which is the main practical edge mutual funds keep over ETFs.

Watch for early-sale fees in the first weeks: BMO InvestorLine charges 1% if you sell within 90 days (minimum $35 on online orders) and Qtrade charges 1% (minimum $45) if you sell or switch a fund held less than 90 days (money market funds excepted).

How do you switch from mutual funds to ETFs?

Switching from mutual funds to ETFs means moving the account to a self-directed brokerage, selling the funds and buying ETFs, ideally inside a registered account where the sale is tax-free.

If the mutual funds are in a TFSA, RRSP or FHSA

1. Open a self-directed account at Wealthsimple Trade or Questrade (the Wealthsimple vs Questrade comparison covers the differences).
2. Request a transfer-in from the current institution; in-kind or in cash, depending on what the receiving broker can hold.
3. Check the transfer-out fee. At Wealthsimple, transfer-out fees are reimbursed on transfers of $25,000 or more, up to $150 per account; other brokers set their own reimbursement rules.
4. Once the funds arrive, sell the mutual fund units (no tax inside a registered account) and buy the chosen ETFs.
5. Allow time: Wealthsimple’s average for TFSA, RRSP and FHSA transfers-in is 2–4 weeks.

If the mutual funds are in a non-registered account

The same steps apply, with a tax cost. Selling units that have gained in value creates a capital gain, and part of that gain is added to taxable income for the year. Work out the tax before selling, and compare it with the yearly fee saving from the calculation above; spreading sales across more than one tax year is an option some investors use. YieldMaple’s complete Wealthsimple guide covers account types and transfers in more detail.

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The verdict

TD e-Series index funds are the lowest-cost mutual funds in Canada in this comparison, at 0.22% to 0.49%, and suit investors who want automatic dollar-amount purchases of index funds. Tangerine’s Core Portfolios, at 1.06%, suit investors who want one fund, automatic rebalancing and no brokerage account, and accept a higher fee for it. Index ETFs such as XEQT at 0.19% cost less than either, for investors comfortable using a brokerage. Branch-sold funds toward the high end of the OSC’s MER range (from less than 1% to more than 3%) need a clear reason, such as advice actually being used, to justify the cost.

This guide is general education, not financial advice.

Related guides

• Best Canadian ETFs, the low-cost alternative to mutual funds
• Best Canadian dividend ETFs, for income-focused investors
• Wealthsimple vs Questrade, two places to hold ETFs
• TFSA vs RRSP, which account to use