Best International ETFs in Canada
Expand your portfolio beyond North America with the top developed and emerging market ETFs.
Completing the Global Picture
A portfolio consisting only of Canadian and US stocks misses out on nearly a third of the global equity market. International ETFs provide exposure to massive global corporations based in Europe, Japan, Australia, and beyond—companies like Nestlé, Toyota, Samsung, and LVMH.
Top Developed Market ETFs (EAFE)
When Canadian brokerages refer to "international" markets, they are usually talking about the EAFE index (Europe, Australasia, and Far East). These are highly developed, stable economies.
1. XEF - iShares Core MSCI EAFE IMI Index ETF
XEF is often considered the gold standard for Canadian investors looking for international exposure. Crucially, it holds its underlying stocks directly rather than holding a US-listed ETF. This structure prevents a second layer of foreign withholding tax on dividends.
- MER: ~0.22%
- Holdings: ~2,500 companies
- Best for: Broad, tax-efficient exposure to developed markets outside North America.
2. VIU - Vanguard FTSE Developed All Cap ex North America Index ETF
VIU is Vanguard's main international offering for Canadians. Like XEF, it holds stocks directly to improve tax efficiency. It tracks a slightly different index but offers similar performance and regional exposure.
- MER: ~0.23%
- Holdings: ~3,900 companies
- Best for: Investors who prefer the FTSE index methodology or want to pair it with other Vanguard funds.
3. ZEA - BMO MSCI EAFE Index ETF
ZEA is BMO's highly liquid international offering. While its MER is slightly lower than XEF and VIU, it only tracks large and mid-cap companies, missing out on the small-cap exposure the others provide.
- MER: ~0.20%
- Holdings: ~800 companies
- Best for: A slightly cheaper, large-cap focused international holding.
Emerging Markets: High Risk, High Reward
Emerging markets (EM) include countries like China, India, Brazil, and Taiwan. These economies are growing rapidly but face higher political, regulatory, and currency risks.
XEC - iShares Core MSCI Emerging Markets IMI Index ETF
XEC is a popular choice for capturing EM growth. Note that, unlike XEF, XEC holds a US-listed ETF (IEMG) internally, meaning you do lose some dividend yield to US withholding taxes.
- MER: ~0.27%
- Holdings: Exposure to ~3,000 EM companies
- Best for: Adding a 5-10% growth kicker to a fully diversified portfolio.
The All-World ex-Canada Approach
If managing US, Developed International, and Emerging Market ETFs sounds too complicated, you can buy an ETF that holds everything in the world except Canada.
XAW - iShares Core MSCI All Country World ex Canada Index ETF
XAW is a "fund of funds" that holds the US market (approx. 60%), developed international (approx. 28%), and emerging markets (approx. 12%). Pair XAW with a Canadian equity ETF (like VCN), and your global equity portfolio is complete in just two steps.
Explore More
Discover how international stocks fit into a broader portfolio strategy:
- Back to the Best Canadian ETFs in 2026 Master Guide
- Explore Best US Equity ETFs for Canadians
- Discover All-in-One ETFs that handle international exposure for you
Frequently Asked Questions
What does an international ETF cover?
In the Canadian context, "international" typically refers to developed markets outside of North America (EAFE: Europe, Australasia, and the Far East). It usually excludes the US, Canada, and emerging markets.
Are international ETFs tax-efficient?
It depends on how the fund is structured. ETFs like XEF that hold the underlying foreign stocks directly are generally more tax-efficient than those that hold a US-listed wrap ETF, as they avoid an extra layer of foreign withholding tax.
Should I invest in emerging markets?
Emerging markets offer higher potential growth but come with significantly higher political and economic volatility. They usually make up a small portion (5-10%) of a well-diversified global portfolio.