If your only investment vehicle is a registered retirement savings plan (RRSP), you may rarely worry about holding cash or cash-like instruments. But if you’re saving for a near-term goal—such as a down payment on a home—you will likely prioritize capital preservation, liquidity and returns that at least keep pace with inflation.
For short-term objectives like this, cash-alternative ETFs can be a practical solution. These funds aim to preserve value, provide quick access to your money and offer yields comparable to short-term bank products. Unlike a guaranteed investment certificate (GIC), ETFs trade on an exchange so you can sell at any time; however, they are not covered by deposit insurance. Still, many cash-equivalent ETFs minimize interest-rate and credit risk and deliver predictable monthly or quarterly income.
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Our top picks for cash-alternative ETFs
| ETF | Ticker | Management fee | MER | Holdings | Description |
|---|---|---|---|---|---|
| Global X 0–3 Month T-Bill ETF | CBIL | 0.10% | 0.11% | 6 | Holds Canadian government treasury bills maturing in under three months; designed for minimal duration and credit risk with a monthly distribution that follows short-term interest rates. |
| BMO Money Market Fund ETF | ZMMK | 0.12% | 0.13% | 420 | Invests across short-term government and high-quality corporate paper to deliver stable, low-risk income suitable for cash management and short horizons. |
| Global X High Interest Savings ETF | CASH | 0.10% | 0.11% | 5 | Allocates to high-interest savings accounts at select Canadian institutions, offering a cash-like option with monthly yield distributions tied to deposit rates. |
Among the cash-equivalent ETFs available in Canada, our panel highlighted the Global X 0–3 Month T-Bill ETF (CBIL) as a top choice for investors who want the highest degree of capital preservation in Canadian dollars. Because it focuses exclusively on federal treasury bills with very short maturities, the fund carries virtually no duration risk, and its net asset value remains relatively stable.
Panelist Tony Dong emphasized the fund’s low ongoing costs and reliable income: “A low 0.11% MER for a fund that offers a stable NAV, minimal credit exposure and income that moves in step with the Bank of Canada rate makes it a practical option for short-term cash needs.”
Our panel also recommended the BMO Money Market Fund ETF (ZMMK) for investors who are comfortable with a slightly broader mandate that can include short-term corporate paper, which can lift yield modestly while maintaining a conservative risk profile. The Global X High Interest Savings ETF (CASH) earned third-place recognition for its straightforward approach of investing in insured high-interest savings products from a small group of Canadian financial institutions, making it a simple solution for those who prefer deposit-like exposure inside an ETF wrapper.
- Overview: Best ETFs for Canadian investors
- Best Canadian ETFs
- Best U.S. ETFs
- Best international ETFs
- Best fixed-income ETFs
- Best all-in-one ETFs
- Desert-island ETF picks
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