Here Are My 2 Favourite ETFs for 2026
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada
You know what’s unlikely to get disrupted by artificial intelligence? Real assets. Consulting firms, software developers, marketing agencies, and even parts of finance and law may feel pressure from automation and AI-driven productivity.
But pipelines, apartment buildings, power grids, and telecom towers still need to exist. People still need places to live, electricity to power their homes, and infrastructure to move goods and data around.
We’ve already seen early signs of rotation in 2026, with investors moving back into energy, industrials, and consumer staples. My focus is slightly different.
I’m personally looking at infrastructure and real estate — the physical backbone of the economy. Here are two exchange-traded funds (ETFs) I find compelling this year.
Canadian real estate has had a rough stretch. Office properties continue to struggle with hybrid work. Condo prices in certain markets have softened. And many individual landlords are feeling the squeeze from high financing costs.
But that’s largely a leverage story. Many investors got into trouble because they borrowed heavily. If rents don’t fully cover mortgage payments, taxes, and maintenance, cash flow turns negative quickly.
That’s not a problem when you own real estate investment trusts (REITs) through an ETF, especially inside a registered account like a Tax-Free Savings Account (TFSA). My preferred vehicle is BMO Equal Weight REITs Index ETF (TSX:ZRE).
ZRE holds roughly 20 Canadian REITs across retail, multifamily residential, industrial, healthcare, and office properties. The key feature is equal weighting. Each REIT is capped at around 5% at rebalance. That prevents one large name from dominating the portfolio and enforces a disciplined buy-low, sell-high approach over time.
Income is a major feature of REITs. Combined in ZRE, the portfolio currently supports a 4.61% yield, paid monthly. That’s meaningfully higher than most broad-market equity ETFs.
The trade-off is cost. ZRE charges a 0.61% expense ratio, which is higher than plain-vanilla index ETFs. You’re paying for targeted sector exposure and equal-weight construction.
A major portion of the Canada Pension Plan’s portfolio is allocated to infrastructure. They favour it for a reason. These are tangible assets with regulated or contracted revenue streams that tend to hold up across economic cycles.
As a retail investor, you can’t directly invest alongside CPP in private infrastructure. What you can do is gain exposure through public markets. One accessible option is BMO Global Infrastructure Index ETF (TSX:ZGI).
