What is the best S&P 500 ETF in Canada?

VFV and ZSP are the most popular S&P 500 ETFs in Canada with MERs under 0.10%. VFV (Vanguard) has 0.09% MER, ZSP (BMO) has 0.09%. Both are unhedged CAD.

Should I buy hedged or unhedged S&P 500 ETF?

Unhedged (like VFV, ZSP) is generally better for long-term investors. Hedging costs ~0.30% annually and currency fluctuations even out over time. Hedge only if you need USD value stability.

Is it better to buy VOO or VFV?

VFV is usually better for Canadians as it trades in CAD with no currency conversion. VOO (US-listed) may be better in large RRSPs using Norbert's Gambit, but gains are small.

Best S&P 500 ETFs in Canada 2026 | Complete Comparison

Best S&P 500 ETFs in Canada

ETF	Provider	MER	Hedged	Currency	AUM
VFV	Vanguard	0.09%	No	CAD	$9.8B
ZSP	BMO	0.09%	No	CAD	$13.5B
XUS	iShares	0.10%	No	CAD	$4.2B
VSP	Vanguard	0.09%	Yes	CAD	$2.1B
XSP	iShares	0.10%	Yes	CAD	$7.8B
ZUE	BMO	0.09%	Yes	CAD	$1.2B
HXS	Horizons	0.10%	No	CAD	$3.8B

Unhedged vs Hedged Explained

Unhedged (VFV, ZSP, XUS)

Feature	Details
Currency exposure	Yes — USD
When CAD weakens	Returns increase
When CAD strengthens	Returns decrease
Long-term effect	Evens out
Hedging cost	None

Hedged (VSP, XSP, ZUE)

Feature	Details
Currency exposure	No — returns in CAD
When CAD weakens	No impact
When CAD strengthens	No impact
Long-term effect	~0.3% lower returns
Hedging cost	~0.3%/year

Recommendation: Unhedged for most long-term investors.

Detailed ETF Comparison

VFV (Vanguard S&P 500 Index ETF)

Feature	Details
MER	0.09%
Hedged	No
Distribution	Quarterly
Yield	~1.3%
Replication	Full replication
AUM	$9.8 billion
Best for	Most investors

ZSP (BMO S&P 500 Index ETF)

Feature	Details
MER	0.09%
Hedged	No
Distribution	Quarterly
Yield	~1.3%
Replication	Full replication
AUM	$13.5 billion
Best for	Most investors

XUS (iShares Core S&P 500 Index ETF)

Feature	Details
MER	0.10%
Hedged	No
Distribution	Quarterly
Yield	~1.3%
Replication	Holds US-listed IVV
AUM	$4.2 billion
Best for	iShares preference

HXS (Horizons S&P 500 Index ETF)

Feature	Details
MER	0.10%
Hedged	No
Distribution	None (swap-based)
Yield	0% (reinvested)
Structure	Total return swap
AUM	$3.8 billion
Best for	Taxable accounts

Performance Comparison (CAD Returns)

Period	VFV	ZSP	XUS	VSP (hedged)
1 Year	+28.5%	+28.5%	+28.4%	+26.2%
3 Year	+12.1%	+12.1%	+12.0%	+10.8%
5 Year	+15.8%	+15.7%	+15.7%	+14.2%
10 Year	+14.2%	+14.1%	+14.1%	+12.5%

Note: Unhedged versions outperform in CAD over long periods due to:

No hedging costs
Slight USD appreciation trend

Cost Comparison ($100,000 Portfolio)

ETF	MER	Annual Cost	25-Year Cost*
VFV	0.09%	$90	~$9,000
ZSP	0.09%	$90	~$9,000
XUS	0.10%	$100	~$10,000
VSP (hedged)	0.09% + ~0.30%	$390	~$39,000

*Assumes 7% growth, fees compound

Hedging costs 4x more than the MER itself.

Best Account Type for Each ETF

TFSA

Choice	Verdict
VFV/ZSP/XUS	✅ Best — no currency hassle
VSP/XSP	⚠️ Don’t hedge in long-term account
HXS	✅ Tax-efficient (no distributions)

RRSP

Choice	Verdict
VFV/ZSP/XUS	✅ Simple, good choice
VOO (US-listed)	⚠️ Slightly better if using Norbert’s Gambit
HXS	❌ Less beneficial (no tax advantage)

Taxable Account

Choice	Verdict
HXS	✅ Best — no annual distributions
VFV/ZSP/XUS	✅ Good, but taxable dividends
Hedged ETFs	❌ Avoid — higher costs

Dividend Tax Considerations

Withholding Tax Structure

ETF	Level 1 (US)	Level 2	Recoverable in RRSP?
VFV	15% withheld	Embedded	No (already paid)
ZSP	15% withheld	Embedded	No
XUS	15% withheld	Embedded	No
VOO (direct)	15% withheld	None	Yes

Reality: The ~0.30% withholding tax drag is embedded in all Canadian-listed S&P 500 ETFs. Holding US-listed VOO in an RRSP saves this, but currency conversion costs often exceed savings.

Should You Use Norbert’s Gambit for VOO?

Portfolio Size	Currency Cost (VFV)	Gambit Savings	Worth It?
$25,000	$0	~$75	No
$50,000	$0	~$150	Maybe
$100,000+	$0	~$300/year	Yes

Norbert’s Gambit makes sense for large RRSP holdings switched to VOO.

Sample Portfolios Using S&P 500 ETFs

100% S&P 500 (Aggressive)

ETF	Allocation
VFV	100%

Simple but lacks diversification.

US + Canada + International

ETF	Allocation	Exposure
VFV	50%	US Large Cap
VCN	25%	Canada
VIU	25%	International

More diversified approach.

S&P 500 + Bonds (60/40)

ETF	Allocation
VFV	60%
VAB	40%

Balanced with fixed income.

When to Consider Hedged ETFs

Scenario	Hedge?
Long-term investing (10+ years)	No
Short-term (< 3 years)	Consider yes
Regular withdrawals in CAD	Consider yes
Expecting CAD to strengthen	Consider yes
Expecting CAD to weaken	No
Not sure about currency	No (default)

Alternatives to S&P 500

If You Want	Consider
Total US market	VUN (0.16% MER)
US + International	VXC (0.21% MER)
All-in-one	VEQT, XEQT
More diversification	XAW (0.22% MER)
US tech focus	QQC.F (Nasdaq 100)

The Verdict

Category	Best ETF
Overall best	VFV or ZSP
Lowest MER	VFV/ZSP (tied at 0.09%)
Taxable account	HXS
Need CAD stability	VSP or XSP
Largest/most liquid	ZSP

Bottom line: VFV and ZSP are essentially identical. Pick one and contribute consistently.