The Best ETF? Why That’s the Wrong Question to Ask

#diyinvestingcanada #investingtips #wealthbuilding #womeninvestors Sep 07, 2025

For the past two years, I've had the honour of sitting on the MoneySense panel to help select the Best ETFs in Canada. It’s always an honour — and a reminder of just how many choices investors face. But here’s the truth: there is no one “best” ETF for everyone.

Too often, people get stuck in analysis paralysis, hunting for the perfect product. The reality? Successful investing is less about chasing the perfect ETF and more about choosing the right ingredients for your portfolio.

Focus on the Ingredients, Not the Brand

Think of your portfolio like a recipe. You need a balance of ingredients:

Global equity
U.S. equity
Canadian equity
Bonds (maybe)
Commodities or gold (maybe)
Bitcoin

Your goal is to get the balance right — not to obsess over which “brand” of U.S. equity ETF you pick. There will always be 10–20 solid options. The key is building the right mix, then actually getting your money invested instead of overthinking it.

Avoid the Duplication Trap

One of the biggest mistakes I see? Overlapping holdings.

Example: someone owns an all-U.S. equity ETF and an S&P 500 ETF. But the S&P 500 companies are already inside the broader U.S. equity ETF — so you’re doubling up without realizing it.

Or another one: buying an asset allocation ETF (which is designed as a complete portfolio in a single fund)… and then layering on extra bond funds and equity ETFs. That’s like adding eggs and milk to a cake after it’s already baked.

Choose a Strategy and Stick With It

Here’s the simple rule:

If you’re using an asset allocation ETF, stick with it. Only add things that aren’t included (like gold, Bitcoin, or a niche sector play you really believe in).
If you’re building your own portfolio, then focus on those core building blocks — not multiple versions of the same thing.

The Fun Side: Desert Island Picks

One quirky thing about the MoneySense Best ETFs list? Each expert shares their “desert island ETF” — the one they’d choose if they could only have one. It’s always fascinating to see what comes up. With so many niche and thematic ETFs hitting the market, this part of the exercise shows what’s really catching the attention of seasoned investors, and what the be all and end all must-have in the portfolio would be.

The Bottom Line:

Investing doesn’t have to be complicated. Focus on your core ingredients, avoid duplication, and stick to a strategy. That’s how you build lasting wealth.