Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage experienced manager choices in an attempt to beat the market. The best ones serve as building blocks for a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.
In February 2025, the top-performing ETFs included Greater China equity fund BMO MSCI China Selection Equity Index ETF ZCH and financial services equity fund Evolve European Banks Enhanced Yield EBNK. Data in this article is sourced from Morningstar Direct.
Screening for the Best-Performing ETFs
To find the month’s best-performing ETFs, we screened equity, allocation, and fixed income funds that trade within Canada for those that have at least C$10 million in total assets. We narrowed the list to only ETFs with parent pillars for their Morningstar Medalist Ratings of average or above, meaning our analysts believe they’re backed by industry-standard asset management companies. We also excluded exchange traded notes, known as ETNs.
Within our list, two funds fell into the Greater China equity category, where the average name rose 6.94% in February.
The 10 Best-Performing ETFs for February 2025
1. BMO MSCI China Selection Equity Index ETF ZCH
2. Evolve European Banks Enhanced Yield EBNK
3. iShares China Index ETF XCH
4. First Trust Morningstar Dividend Leaders ETF (CAD-Hedged) FDL
5. BMO Long-Term US Treasury Bond Fund ETF ZTL
6. iShares US High Dividend Equity Index ETF (CAD-Hedged) XHD
7. iShares US High Dividend Equity Index ETF XHU
8. Invesco S&P 500 Low Volatility Index ETF ULV.F
9. TD US Long Term Treasury Bond ETF TULB
10. Fidelity International Value ETF FCIV
Best-Performing Canadian ETFs
Source: Morningstar Direct. Data as of Feb. 28, 2025.
Metrics for the Best-Performing ETFs
BMO MSCI China Selection Equity Index ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.67%
• Morningstar Category: Greater China Equity
The C$102 million BMO MSCI China Selection Equity Index ETF was the best-performing ETF in February, with a 14.69% return. The passively managed BMO ETF beat the 6.94% gain on the average fund in Morningstar’s Greater China equity category for the month. Over the last 12 months, the BMO MSCI China Selection Equity Index ETF has returned 55.19%, outperforming the 32.92% gain on the average fund in its category, leaving the ETF in the 8th percentile.
The BMO MSCI China Selection Equity Index ETF takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Bronze.
Evolve European Banks Enhanced Yield
• Morningstar Rating: 5 stars
• Expense Ratio: 0.69%
• Morningstar Category: Financial Services Equity
The second-best performing ETF in February was the C$17 million Evolve European Banks Enhanced Yield. The passively managed Evolve Funds ETF returned 10.53%, outperforming the average financial services equity fund, which lost 0.53%. Looking back over the last year, the Evolve European Banks Enhanced Yield has returned 47.35%, outperforming the 29.39% return on the average fund in its category, leaving the ETF in the 2nd percentile.
The Evolve European Banks Enhanced Yield has a Negative Morningstar Medalist Rating, meaning that our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.
iShares China Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.86%
• Morningstar Category: Greater China Equity
The C$163 million iShares China Index ETF ranked third for the month, returning 9.87%. The iShares ETF, which is passively managed, topped the 6.94% average return on funds in the Greater China equity category for February. Over the last 12 months, the iShares ETF has returned 62.01%, ahead of the 32.92% gain on the average fund in its category, leaving the ETF in the 1st percentile.
The iShares China Index ETF, launched in January 2010, has a Morningstar Medalist Rating of Neutral.
First Trust Morningstar Dividend Leaders ETF (CAD-Hedged)
• Morningstar Rating: 2 stars
• Expense Ratio: 0.61%
• Morningstar Category: US Dividend & Income Equity
With a 5.52% return, the C$10 million First Trust Morningstar Dividend Leaders ETF (CAD-Hedged) ranked fourth in February. The passively managed First Trust ETF outperformed the 0.62% return on the average us dividend & income equity fund. Over the last year, the fund has gained 22.21%, ahead of the 20.36% return on funds in its category, placing it in the 45th percentile for the period.
The First Trust Morningstar Dividend Leaders ETF (CAD-Hedged) has a Neutral Morningstar Medalist Rating. It was launched in September 2016.
BMO Long-Term US Treasury Bond Fund ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.22%
• Morningstar Category: Global Fixed Income
The fifth-best performing ETF was the C$345 million BMO Long-Term US Treasury Bond Fund ETF, which gained 5.12% in February. This passively managed BMO ETF beat the 1.41% average return on funds in the global fixed income category. Over the past 12 months, the BMO Long-Term US Treasury Bond Fund ETF rose 8.97%, outperforming the 6.83% return on the average fund in its category and placing it in the 23rd percentile.
The BMO Long-Term US Treasury Bond Fund ETF, launched in February 2017, has a Morningstar Medalist Rating of Neutral.
iShares US High Dividend Equity Index ETF (CAD-Hedged)
• Morningstar Rating: 1 star
• Expense Ratio: 0.33%
• Morningstar Category: US Dividend & Income Equity
The C$196 million iShares US High Dividend Equity Index ETF (CAD-Hedged) was the sixth-best performing Canadian ETF in February, with a 5.02% return. The return on the passively managed iShares ETF topped the 0.62% gain on the average fund in Morningstar’s us dividend & income equity category. Looking back over the last year, the iShares US High Dividend Equity Index ETF (CAD-Hedged) has returned 16.44%, underperforming the 20.36% return on the average fund in its category, leaving the ETF in the 77th percentile.
The Neutral-rated iShares US High Dividend Equity Index ETF (CAD-Hedged) was launched in August 2012.
iShares US High Dividend Equity Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.34%
• Morningstar Category: US Dividend & Income Equity
The seventh-best performing ETF in February was the C$217 million iShares US High Dividend Equity Index ETF. The passively managed iShares ETF returned 4.60%, outperforming the average us dividend & income equity fund, which gained 0.62%. Looking back over the last 12 months, the iShares US High Dividend Equity Index ETF has returned 25.04%, outperforming the 20.36% return on the average fund in its category, leaving the ETF in the 20th percentile.
The iShares US High Dividend Equity Index ETF has a Morningstar Medalist Rating of Neutral. It was launched in February 2015.
Invesco S&P 500 Low Volatility Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.31%
• Morningstar Category: US Equity
The C$122 million Invesco S&P 500 Low Volatility Index ETF ranked eighth for the month, returning 4.44%. The Invesco ETF, which is passively managed, topped the 2.09% average loss on funds in the US equity category. Over the last year, the Invesco ETF has returned 16.61%, behind the 19.73% return on the average fund in its category, leaving it in the 69th percentile for performance.
The Neutral-rated Invesco S&P 500 Low Volatility Index ETF was launched in January 2012.
TD US Long Term Treasury Bond ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.23%
• Morningstar Category: Global Fixed Income
With a 4.38% gain, the C$76 million TD US Long Term Treasury Bond ETF ranked ninth in February. The actively managed TD ETF outperformed the 1.41% return on the average global fixed income fund. Over the last 12 months, the fund has returned 9.56%, ahead of the 6.83% return on funds in its category, placing it in the 20th percentile.
The TD US Long Term Treasury Bond ETF, launched in November 2019, has a Morningstar Medalist Rating of Neutral.
Fidelity International Value ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.52%
• Morningstar Category: International Equity
The tenth-best performing ETF was the C$431 million Fidelity International Value ETF, which gained 4.00% in February. The passively managed Fidelity International ETF beat the 1.16% average return on funds in the international equity category. Over the past year, the Fidelity International Value ETF rose 14.83%, outperforming the 13.80% return on the average fund in its category and placing it in the 49th percentile.
The Fidelity International Value ETF has a Morningstar Medalist Rating of Silver. It was launched in June 2020.
What Are ETFs?
Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds – known as open-end funds – which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.
The Best ETFs: More Ideas to Consider
Investors who would like to find more of the top-performing or cheapest ETFs can do the following:
• Use the ETF Screener tool to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.
• Find ideas specific to your needs, or learn more about ETFs, on our ETF Insights page.
• Compare funds and ETFs side by side and easily follow their valuations, ratings, and fees.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
