XIC vs XIU (2026): Which Canadian Index ETF Wins?

XIC and XIU are both iShares (BlackRock Canada) Canadian equity index ETFs, often confused or compared by investors. The decision is mostly about MER and how much of the Canadian market you want to capture. Here’s the breakdown.

At-a-glance

XIC vs XIU — full comparison (May 2026)

	XIC	XIU
Full name	iShares Core S&P/TSX Capped Composite Index ETF	iShares S&P/TSX 60 Index ETF
Index tracked	S&P/TSX Capped Composite	S&P/TSX 60
Holdings count	~250	60
MER	0.06%	0.18%
Inception	2001	1990 (one of the oldest Canadian ETFs)
AUM (May 2026)	~$11B	~$13B
Distribution frequency	Quarterly	Quarterly
Distribution yield	~2.7%	~2.8%
Bid-ask spread	Tight (~$0.01)	Tighter (~$0.005)
Mid-cap exposure	Yes (~25% of fund)	No
Best for	Most investors	Pure large-cap exposure

What XIC actually holds

XIC tracks the S&P/TSX Capped Composite Index — about 250 Canadian-listed stocks weighted by market cap, with a “cap” rule that limits any single stock from exceeding 10% of the fund. The cap exists because in some periods Canadian markets have been so concentrated (e.g., Nortel in 2000, Valeant Pharmaceuticals in 2015) that a single stock could dominate an uncapped index.

Composition (approximate):

• ~75% large caps (60 largest Canadian stocks)
• ~25% mid caps (additional 190 stocks)

Top 10 holdings of XIC are essentially identical to XIU’s top 10 — Royal Bank, Toronto-Dominion, Enbridge, BCE, Canadian Pacific Kansas City Southern, Brookfield Corp, Shopify, etc. The difference is in the bottom 190 stocks XIC holds that XIU doesn’t.

What XIU actually holds

XIU tracks the S&P/TSX 60 Index — exactly 60 Canadian large-cap stocks. These are the largest companies on the TSX by market capitalization.

XIU is one of the oldest ETFs in the world (launched 1990 as TIPS, the first Canadian ETF, before being renamed XIU). Its longevity gives it strong institutional liquidity — large investors trade it frequently because of the 35+ year track record.

For retail investors, the longevity matters less than the cost and exposure differences.

The MER difference (and what it costs)

XIC’s 0.06% MER vs XIU’s 0.18% saves you 0.12% per year. The compounding impact:

XIC vs XIU fee impact (assumes 7% gross annual return)

	Investment	30-year XIC end balance	30-year XIU end balance	Difference
$10,000	$74,800	$73,000	$1,800
$50,000	$374,000	$365,000	$9,000
$100,000	$748,000	$730,000	$18,000
$500,000	$3.74M	$3.65M	$90,000

The fee gap is real but small. For a $50K position over 30 years, you’d save about $9,000 by choosing XIC over XIU. Significant, but not life-changing.

Performance comparison

Over the past 10 years, XIC and XIU have performed within 0.1–0.3% per year of each other. The slight differences come from:

• XIC’s MER advantage (~0.12% per year)
• XIC’s mid-cap exposure (helps in years mid-caps outperform, hurts when they underperform)

In aggregate, XIC slightly edges out XIU on return — primarily due to the MER advantage. XIU has slightly lower volatility (large-cap concentration is smoother), but the difference is modest.

When XIU might still make sense

Three reasons to choose XIU over XIC:

1. You specifically want pure large-cap Canadian exposure. If your investment philosophy is “only the biggest names,” XIU’s 60-stock concentration matches that.

2. You’re a large institutional investor or trader who values XIU’s tighter bid-ask spread. For retail investors trading $1K–$50K, the spread difference is noise. For institutions trading $100M, XIU’s tighter spread saves more than the MER gap.

3. You already hold XIU in a non-registered account with significant capital gains. Selling to switch to XIC would trigger taxes that may exceed the fee savings for shorter holding periods.

For most retail investors in 2026, none of these apply. XIC is the better choice.

My take

I held XIU from 2018–2021, then switched to XIC for the lower MER. The math on $30K of Canadian equity exposure was about $36/year in saved fees — modest but compounding over decades.

For investors building a fresh Canadian equity allocation in 2026, XIC is the obvious choice. It’s broader, cheaper, and equally well-managed by iShares.

For investors who already hold XIU in registered accounts, switching is essentially free — sell and buy in the same trade. In non-registered accounts, calculate the tax cost first.

Where XIC and XIU fit in a portfolio

Most Canadians don’t need XIC or XIU as standalone holdings. Better approaches:

1. One-ticker solution: hold XEQT or VEQT (which already includes XIC’s exposure as ~25% of the fund). No need to add XIC separately.

2. DIY 4-ETF portfolio: XIC + VFV (US) + XEF (international) + VEE (emerging) — slightly cheaper than XEQT but requires manual rebalancing.

3. Canadian dividend tilt: add VDY (4.5% yield) or XEI alongside the broader Canadian exposure XEQT or XIC provides.

XIU rarely makes sense as a primary holding in 2026. The MER alone makes XIC, VCN, or ZCN better choices for the same exposure.

Where to buy XIC or XIU

Both are commission-free to buy at:

• Wealthsimple Trade — $0 buy and sell.
• Questrade — $0 buy, $4.95–$9.95 sell.
• National Bank Direct Brokerage — $0 both sides.

Bank brokers charge $9.95 per trade.

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My final answer

For new buyers in 2026: XIC. Lower MER, broader exposure, and effectively identical performance to XIU.

For existing XIU holders in registered accounts: switch to XIC for the cost savings — costless to do.

For existing XIU holders in non-registered with large unrealized gains: hold or partially switch over multiple years. The fee savings still favor XIC long-term, but the tax cost matters in the short term.

Read next

• Best Canadian ETFs — full ETF landscape
• XEQT vs VEQT — one-ticker comparison
• VFV vs XEQT — US large-cap vs global all-in-one
• Wealthsimple vs Questrade — where to buy