The Best S&P 500 ETF in Canada (2024)

Billions of dollars find their home in funds mirroring the S&P 500’s performance. The S&P 500, the Standard & Poor’s 500 Index, is a popular stock market index for investors following the 500 largest U.S. corporations. This stock market index is considered a universal benchmark to compete against. Even Warren Buffet is investing his legacy in the index after his passing. An S&P 500 ETF can be a great way for Canadians to diversify their portfolios to help avoid a home country bias. To simplify your decision-making process, here are the top ten Canadian S&P 500 ETFs worth considering now.

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

1. HSU: BetaPro S&P 500 2x Daily Bull ETF
2. VFV: Vanguard S&P 500 Index ETF
3. ZSP: BMO S&P 500 Index ETF
4. XUS: iShares Core S&P 500 Index ETF
5. HXS: Horizons S&P 500 Index ETF
6. VSP: Vanguard S&P 500 Index ETF (CAD-hedged)
7. XSP: iShares Core S&P 500 Index ETF (CAD-Hedged)
8. ZUE: BMO S&P 500 Hedged to CAD Index ETF
9. EQL: Invesco S&P 500 Equal Weight Index ETF
10. EQL.F: Invesco S&P 500 Equal Weight Index ETF – CAD Hedged

10. Invesco S&P 500 Equal Weight Index ETF – CAD Hedged

Invesco S&P 500 Equal Weight Index ETF (EQL.F) invests in either securities of Invesco S&P 500 Equal Weight ETF (NYSE Arca ticker: RSP) or in securities of U.S.-listed companies in order to replicate the S&P 500 Equal Weight Index which has the same constituents as the capitalization-weighted S&P 500; however, each company represented in the index is allocated a fixed weight of 0.20% at each quarterly rebalancing of the index. The ETF seeks to hedge the foreign currency exposure of the portion of the portfolio attributable to the CAD-Hedged Units back to the Canadian dollar to the extent that such exposure is hedged by the index provider in the hedged version of its index.

9. Invesco S&P 500 Equal Weight Index ETF

Invesco S&P 500 Equal Weight Index ETF (EQL) invests in either securities of Invesco S&P 500 Equal Weight ETF (NYSE Arca ticker: RSP) or in securities of U.S.-listed companies in order to replicate the S&P 500 Equal Weight Index which has the same constituents as the capitalization-weighted S&P 500; however, each company represented in the index is allocated a fixed weight of 0.20% at each quarterly rebalancing of the index.

• Want capital growth over the long term
• Want a well-diversified core US equity investment
• Own, or plan to own, other types of investments to diversify their holdings
• Are comfortable with medium risk

8. BMO S&P 500 Hedged to CAD Index ETF

The BMO S&P 500 Hedged to CAD Index ETF (ZUE) has been designed to replicate, to the extent possible, the performance of the S&P 500 Hedged to Canadian Dollars Index (Index), net of expenses. The ETF invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index. The U.S. dollar currency exposure is hedged back to the Canadian dollar. In addition, as ZUE is a fund of fund, the management fees charged are reduced by those accrued in the underlying funds.

7. iShares Core S&P 500 Index ETF (CAD-Hedged)

iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP) seeks long-term capital growth by replicating the performance of the S&P 500 Hedged to Canadian Dollars Index, net of expenses. This exposure is also available unhedged in XUS.

• Own a diverse portfolio of 500 US large cap companies while hedging currency risk
• Designed to be a long-term core holding
• Low cost

6. Vanguard S&P 500 Index ETF (CAD-hedged)

Vanguard S&P 500 Index ETF (CAD-hedged) (VSP) seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad U.S. equity index that measures the investment return of large-capitalization U.S. stocks, which Index is hedged to the Canadian dollar. Currently, this Vanguard ETF seeks to track the S&P 500 Index (CAD-hedged) (or any successor thereto). It invests directly or indirectly primarily in stocks of U.S. companies and uses derivative instruments to seek to hedge the U.S. dollar exposure of the securities included in the S&P 500 Index back to the Canadian dollar.

• Invests primarily in the U.S.-domiciled Vanguard S&P 500 ETF. U.S. dollar exposure is hedged back to the Canadian dollar
• Employs a passively managed, full-replicated index strategy to provide exposure of large U.S. companies
• Uses efficient, cost effective index management techniques

5. Horizons S&P 500 Index ETF

Horizons S&P 500 Index ETF (HXS) seeks to replicate, to the extent possible, the performance of the S&P 500 Index (Total Return), net of expenses. The S&P 500 Index (Total Return) is designed to measure the performance of the large-cap market segment of the U.S. equity market

4. iShares Core S&P 500 Index ETF

iShares Core S&P 500 Index ETF (XUS) seeks long-term capital growth by replicating the performance of the S&P 500 Index, net of expenses. This exposure is also available hedged to the Canadian dollar in XSP.

• Own a diversified portfolio of 500 US large cap companies
• Designed to be a long-term core holding
• Low cost

3. BMO S&P 500 Index ETF

The BMO S&P 500 Index ETF (ZSP) has been designed to replicate, to the extent possible, the performance of the S&P 500 Index, net of expenses. The ETF invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

The S&P 500 Index is a world renowned float-adjusted market capitalization weighted Index that tracks the securities of the largest and most liquid public companies in the United States. Constituent securities must pass minimum float-adjusted and liquidity screens to qualify and maintain membership in the Index. Index weights are reviewed quarterly.

2. Vanguard S&P 500 Index ETF

Vanguard S&P 500 Index ETF (VFV) seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad U.S. equity index that measures the investment return of large-capitalization U.S. stocks. Currently, this Vanguard ETF seeks to track the S&P 500 Index (or any successor thereto). It invests directly or indirectly primarily in stocks of U.S. companies.

• Seeks to track the performance of the S&P 500 Index to the extent possible and before fees and expenses
• Invests primarily in the U.S.-domiciled Vanguard S&P 500 ETF
• Employs a passively managed, full-replicated index strategy to provide exposure of large U.S. companies
• Uses efficient, cost effective index management techniques

1. BetaPro S&P 500 2x Daily Bull ETF

BetaPro S&P 500 2x Daily Bull ETF (HSU) seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the daily performance of the S&P 500. HSU is denominated in Canadian dollars. Any U.S. dollar gains or losses as a result of the ETF’s investment will be hedged back to the Canadian dollar to the best of the ETF’s ability.

What is an S&P 500 ETF?

With the explosion of assets under passive management, S&P 500 ETFs replicate the returns of large-cap US equities cost-effectively. As investors cannot directly invest in an index, they typically turn to ETFs that replicate the performance of the S&P 500. Investors can utilize these ETFs to seek exposure to the underlying performance of the US economy. These index ETFs have become a cornerstone of long-term diversified portfolios and offer spectacular returns given the simplicity of owning these assets.

Can You Buy an S&P 500 Index in a TFSA in Canada?

You can in invest in the S&P 500 index in Canada through low-fee ETFs from many asset managers like BlackRock, BMO, Horizons, Invesco and Vanguard. Opting for a Canadian-listed ETF that mirrors the S&P 500 for your TFSA benefits you by avoiding currency conversion expenses. As these ETFs are denominated in Canadian dollars, there’s no need to convert your funds into U.S. dollars when making investments or selling your holdings.

How to Buy S&P 500 ETF in Canada

• Select a Trading Platform: Ensure the broker you choose supports the investment options you’re interested in and evaluate potential fees
• Open and Finance Your Account: Complete an application providing your personal information and link a bank account for funding purposes or transfer existing assets
• Conduct Research on Investment Opportunities: Explore ETFs options and thoroughly analyze each option to determine its suitability for your investment goals
• Execute the Investment: Purchase the desired number of shares using a market order or opt for a limit order to buy at a specified price
• Keep Track of Your Investment: Regularly monitor your investment and adjust your strategy as needed

Conclusion

The only significant difference between these ETFs is whether or not the investment is hedged to the Canadian dollar or not. Vanguard S&P 500 Index ETF (VFV) is currently the oldest and least expensive making it my preferred ETF in this category without leverage.

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