7 Best S&P 500 ETFs in Canada for 2022

Photo of author

by Enoch Omololu, MSc (Econ)

Published on

Advertiser Disclosure

The S&P 500 is the benchmark US equity index that holds 500 of the largest publicly traded American companies.

This index was established in March of 1957 by the statistics and publishing company Standard and Poor’s.

Investing in Exchange Traded Funds (ETFs) that track the S&P 500 is an excellent way to own diversified exposure to the US equities market.

Canadian investors can invest in the S&P 500 via a Canadian dollar-denominated ETF that trades on the TSX, or they can also invest in US-domiciled ETFs that trade in US dollars.

In this article, I will cover the 7 best S&P 500 ETFs in Canada for 2022, where to buy them, and why they make a great addition to any diversified portfolio.

What is the S&P 500 Index?

The S&P 500 is the most widely tracked index in the world and is a barometer of the health and strength of the US stock market.

Since 1957, the S&P 500 has provided an average annual return of about 10.5% to investors.

It is a free-float weighted and market-capitalization-weighted index. This means that the companies with the largest market caps hold the largest allocations in the index.

The top ten companies account for about 30% of the total market capitalization of the index. Not surprisingly Apple, Microsoft, Amazon, Alphabet, and Tesla account for the highest weighted holdings.

Best Canadian S&P 500 ETFs to Buy in 2022

Vanguard Canada S&P 500 Index ETF

  • Ticker symbol: VFV
  • MER: 0.09%
  • Number of Holdings: 505
  • 5-year average annual return: 10.68%
  • Issuer: Vanguard Canada
  • Assets under management: $6.4 billion
  • Distribution frequency: Quarterly
  • Distribution yield: 1.03%
  • 12-month trailing yield: 1.18%
  • Inception date: November 02, 2012

VFV is the Vanguard Canada S&P 500 Index that was established in 2012 and trades on the Toronto Stock Exchange. It is one of the best Canadian ETFs.

It provides Canadian investors with direct exposure to the S&P 500 but is denominated in Canadian dollars.

With $6.4 billion in AUM, it is one of the largest ETFs in Canada and one of the most popular Vanguard ETFs.

The 0.09% MER for VFV is amongst the lowest in the industry and is one of the cheapest ways that Canadian investors can own US-domiciled stocks.

Buy ETFs Free on Questrade ($50 Trade Credit)

Vanguard S&P 500 index ETF (CAD-Hedged)

  • Ticker symbol: VSP
  • MER: 0.09%
  • Number of Holdings: 505
  • 5-year average annual return: 9.55%
  • Issuer: Vanguard Canada
  • Assets under management: $1.98 billion
  • Distribution frequency: Quarterly
  • Distribution yield: 1.02%
  • 12-month trailing yield: 1.20%
  • Inception date: November 02, 2012

VSP is identical to the VFV ETF from Vanguard Canada, except that it is hedged with the Canadian dollar. This allows the ETF to hedge against any currency risks for Canadian investors.

Historically, VSP has provided slightly lower returns than its non-hedged counterpart in VFV.

VSP has the same MER as VFV but pays out a slightly lower annualized distribution yield. Learn more about it in this review.

BMO S&P 500 Index ETF

  • Ticker symbol: ZSP
  • MER: 0.09%
  • Number of Holdings: 504
  • 5-year average annual return: 10.74%
  • Issuer: BMO Global Asset Management
  • Assets under management: $9.1 billion
  • Distribution frequency: Quarterly
  • Distribution yield: 1.44%
  • 12-month trailing yield: N/A
  • Inception date: November 14, 2012

ZSP is the S&P 500 Index ETF from BMO Global Asset Management that trades on the Toronto Stock Exchange. This ETF has the same MER as VFV and VSP but pays out a slightly higher distribution yield of 1.44%.

It has a medium risk rating and is eligible for all registered and non-registered accounts for Canadian investors.

Like VFV, ZSP also has a CAD-hedged version of its ETF which trades as the BMO S&P 500 Hedged to CAD Index ETF (ZUE).

Best S&P 500 ETFs in Canada-img

Horizons S&P 500 Index ETF

  • Ticker symbol: HXS
  • MER: 0.10%
  • Number of Holdings: 504
  • 5-year average annual return: 10.68%
  • Issuer: Horizons ETFs
  • Assets under management: $2.3 billion
  • Distribution frequency: N/A
  • Distribution yield: N/A
  • 12-month trailing yield: N/A
  • Inception date: November 30, 2010

HXS is the S&P 500 Index ETF offering from Horizons ETFs that trades on the Toronto Stock Exchange.

This ETF has a slightly higher MER than its competitors and it should be noted that HXS does not pay out a quarterly distribution.

It also has a hedged version of the ETF that trades as the S&P 500 CAD Hedged Index ETF (HSH) that also trades on the TSX.

Having been established in 2010, HSX is one of the first Canadian-domiciled S&P 500 index ETFs. It is eligible to be traded in all registered and non-registered accounts for Canadian investors.

iShares Core S&P 500 Index ETF

  • Ticker symbol: XUS
  • MER: 0.10%
  • Number of Holdings: 504
  • 5-year average annual return: 10.74%
  • Issuer: Blackrock iShares
  • Assets under management: $4.1 billion
  • Distribution frequency: Semi-Annual
  • Distribution yield: 1.13%
  • 12-month trailing yield: 1.28%
  • Inception date: April 10, 2013

XUS is an S&P 500 Index ETF in Canada that is issued by Blackrock iShares and trades on the Toronto Stock Exchange.

One distinguishing feature of XUS compared to its peers is that it pays its distributions on a semi-annual basis, compared to quarterly.

This ETF also has a CAD-hedged version called the iShares Core S&P 500 Index ETF (CAD-Hedged) and trades on the TSX under the ticker symbol XSP.

Both XUS and XSP are eligible for all registered and non-registered accounts for Canadian investors.

Buy Stocks & ETFs Free on Wealthsimple Trade ($25 Bonus)

Top US-Listed S&P 500 ETFs

State Street SPDR S&P 500 ETF Trust

  • Ticker symbol: SPY
  • MER: 0.09%
  • Number of Holdings: 504
  • 5-year average annual return: 13.22%
  • Issuer: State Street Global Advisors
  • Assets under management: $349 billion USD
  • Distribution frequency: Quarterly
  • Distribution yield: 1.56%
  • 12-month trailing yield: N/A
  • Inception date: January 22, 1993

SPY is one of the largest ETFs in the world and trades on the US-domiciled NYSEARCA index in US dollars.

With an inception date of January 1993, it is credited as being the very first ETF to ever be listed in the United States.

Canadian inventors can invest in US-domiciled ETFs like SPY in their RRSPs without any reduction to distribution yields via the 15% foreign withholding taxes.

Vanguard S&P 500 ETF

  • Ticker symbol: VOO
  • MER: 0.03%
  • Number of Holdings: 505
  • 5-year average annual return: 11.28%
  • Issuer: Vanguard
  • Assets under management: $247 billion USD
  • Distribution frequency: Quarterly
  • Distribution yield: 1.45%
  • 12-month trailing yield: N/A
  • Inception date: September 7, 2010

VOO is Vanguard’s US-domiciled S&P 500 Index that trades on the NYSEARCA index in US dollars.

This ETF is known for one of the lowest MERs in the industry with just a 0.03% fee for holding shares. This means that for every $10,000 invested in VOO, the annual fee is just $3.00.

It can be held in a registered account like an RRSP, and Canadian investors will not have to pay the 15% foreign withholding taxes. This is not the case in unregistered accounts like a TFSA.

How to Invest in S&P 500 ETFs in Canada

Canadian investors that are looking to invest in the S&P 500 can easily do so through some of Canada’s most popular discount brokerages.

Questrade

Questrade is the largest and oldest discount brokerage in Canada that offers its highly rated platform for both desktop and mobile versions.

This site allows Canadian investors to buy ETFs for free but does charge a $4.95 fee when ETFs are sold.

Questrade

questrade logo

Trade stocks, ETFs, options, etc.

Low and competitive trading fees

Top platform for advanced traders

Get $50 trade credit with $1,000 funding

Wealthsimple Trade

Wealthsimple Trade is the stock trading segment of the popular Wealthsimple financial services platform that was established in 2014.

This platform has gained popularity amongst Canadian investors due to its zero-commission trading for stocks, ETFs, mutual funds, and even cryptocurrencies.

Wealthsimple Trade

wealthsimple logo

Trade stocks and ETFs for free

Best trading platform for beginners

Deposit $150 to get a $25 cash bonus

Transfer fees waived up to $150

CIBC Investor’s Edge

While not exactly a discount brokerage by any means, CIBC Investor’s Edge offers the lowest trading fees amongst the big banks in Canada.

Equity and ETF trades are only $6.95 per trade with even lower rates for active investors and free trading for Canadians under 25 with CIBC Smart Start.

Learn more about the platform in this detailed review.

Are S&P 500 ETFs a Good Investment?

There is a reason that the S&P 500 is widely seen as the benchmark index for the US stock market.

With a more than 10% average annual return since inception, the S&P 500 is one of the steadiest investments you can make.

Canadian investors can add the S&P 500 ETFs to their portfolio to gain valuable exposure to the US equities market.

With that being said, investors should not take this ETF review article as financial advice and always do their own research and due diligence before making an investment.

Downsides of S&P 500 ETFs

The S&P 500 index is a well-diversified portfolio of American companies that acts as a barometer for the US economy.

Some downsides include 100% allocation to US companies and the fact that 30% of the index is made up of the largest 10 companies by market cap.

Considering the Canadian S&P 500 ETFs hold so many stocks, they also offer a fairly low distribution yield across the industry.

S&P 500 ETF FAQs

Do S&P 500 ETFs Pay Dividends?

Yes, most of them do. Distribution yields vary across the different ETF providers but most land between 1-2% annually and typically pay these out on a quarterly basis. The exception to the rule seems to be HXS from Horizons which does not pay out any cash distributions.

How do I Choose an S&P 500 ETF?

When choosing an S&P 500 ETF, investors should look for low MERs and reasonable distribution yields. This is because each ETF will have mostly the same holdings and historical performance.

What is the S&P 500 Index equivalent in Canada?

The closest thing to the S&P 500 index in Canada would likely be the S&P/TSX 60 index which tracks 60 of the largest Canadian companies on the TSX. Canadian investors who wish to invest in the S&P/TSX 60 can look at buying Canadian-domiciled ETFs like XIU from iShares or HXT from Horizons ETF.

Related posts:

7 Best S&P 500 ETFs in Canada for 2022

Top Investment Offers This month

Get $50 in FREE trades or invest $10,000 FREE for 1 year

Offers self-directed and professionally managed portfolios.

No trading commissions on ETF purchases.

Low fees to buy stocks starting at $4.95 per transaction.

Free transfers from other banks and $0 inactivity fees.

Overall best crypto exchange in Canada + $50 bonus

Top crypto trading platform for beginners and advanced traders.

Low trading fees at 0.20% and multiple fiat currencies supported.

Trade 16 popular cryptocurrencies.

$50 instant bonus when you deposit $200.

Get a cash bonus and FREE stock and ETF trades ($175 value)

Best commission-free stock and ETF trading platform in Canada.

$0 trading commissions to trade thousands of stocks and ETFs.

$25 bonus when you deposit $150 or more in your account.

Up to $150 transfer fees waived when you transfer eligible assets from other brokerages.

Retirement 101 eBook - 3D

Author

Photo of author
Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Shares
Share
Pin
Tweet
WhatsApp
Reddit