VFV Review 2026: The Cheapest S&P 500 ETF In Canada?

VFV (Vanguard S&P 500 Index ETF) is the most-traded ETF in Canada in 2026, with tens of thousands of Canadian retail investors holding it as their primary US equity exposure. I have held VFV in three different registered accounts since 2020 — here’s the honest review.

At a glance

• Ticker: VFV (TSX)
• MER: 0.09%
• Index tracked: S&P 500
• Holdings: ~500 US large-cap stocks
• Currency: CAD (unhedged)
• Distributions: Quarterly
• Yield: ~1.2–1.5%
• Inception: November 2012
• AUM: $20+ billion as of 2026
• Provider: Vanguard Investments Canada Inc.

What VFV actually holds

VFV tracks the S&P 500 index, which is the 500 largest US companies by market capitalization. The top 10 holdings (which together represent ~30% of VFV) typically include:

• Apple
• Microsoft
• NVIDIA
• Amazon
• Meta Platforms
• Alphabet (Google) Class A and C
• Berkshire Hathaway
• Tesla
• Eli Lilly

Sector breakdown is tech-heavy: roughly 30% Information Technology, 13% Financials, 12% Health Care, 10% Consumer Discretionary, 8% Communication Services, with the remainder spread across Industrials, Consumer Staples, Energy, Utilities, Real Estate, and Materials.

Why VFV is so popular

Three reasons VFV dominates Canadian retail brokerage activity:

1. Lowest MER. At 0.09%, VFV is tied with ZSP (BMO S&P 500 Index ETF) for the cheapest Canadian-listed S&P 500 ETF. XUS (iShares Core S&P 500 Index ETF) is 0.10% — slightly more expensive.

2. Pure US exposure. Most one-ticker portfolios (XEQT, VEQT, VGRO, VBAL) include US, Canadian, international, and emerging-market exposure together. VFV gives you US-only exposure. Canadians who specifically want to overweight US (because US has historically outperformed) use VFV as a tilt.

3. CAD-listed. Unlike VOO (the US-listed Vanguard S&P 500 ETF), VFV trades in Canadian dollars on the TSX. No currency conversion required to buy. Inside a TFSA, this matters — VFV avoids the 15% US withholding tax issues that come with US-listed ETFs in TFSAs.

VFV vs the alternatives

Reader offer

Wealthsimple Trade

Buy VFV commission-free →

Affiliate link — we may earn a commission, at no extra cost to you. Disclosure.

VFV vs ZSP

ZSP (BMO S&P 500 Index ETF) is functionally identical to VFV. Same index, same 0.09% MER, same CAD listing. Differences:

• Provider: Vanguard (VFV) vs BMO (ZSP)
• Inception: VFV November 2012, ZSP November 2012 (same month)
• AUM: VFV ~$20B, ZSP ~$20B (similar)
• Distribution timing: VFV quarterly Mar/Jun/Sep/Dec; ZSP same
• Liquidity: Both highly liquid; spreads typically 1–2 cents

For most investors, VFV and ZSP are interchangeable. Pick whichever your broker prefers or whichever has a better current bid/ask.

VFV vs XUS

XUS (iShares Core S&P 500 Index ETF) tracks the same S&P 500 index but at 0.10% MER — 0.01% higher. On a $100,000 investment, that’s $10/year extra. Negligible but real. VFV wins on cost.

VFV vs VOO

VOO is Vanguard’s US-listed S&P 500 ETF, trading in USD on NYSE. For Canadians:

• Cost: VOO has 0.03% MER, cheaper than VFV’s 0.09%. BUT this is offset by FX conversion costs (typically 1.5% one-time when buying)
• Tax (TFSA): VFV holds VOO internally, so the 15% US withholding tax applies inside the fund — but you don’t see a separate charge. VOO held directly in a TFSA also pays 15% withholding, also unrecoverable. Net effect: same tax burden.
• Tax (RRSP): VOO held directly in an RRSP avoids the 15% withholding tax under the Canada-US treaty. VFV held in an RRSP loses 15% at the fund level (since VFV holds VOO internally, not the underlying stocks). For RRSPs specifically, VOO is slightly more tax-efficient (saves ~0.20%/year on dividends).
• Currency: VOO trades in USD; VFV trades in CAD. For most Canadians, VFV is operationally simpler.

Verdict: VFV for TFSAs and most everyday investors. VOO for RRSPs if you want maximum tax efficiency and don’t mind managing USD.

VFV vs XEQT

VFV holds 500 US stocks. XEQT holds ~9,000 stocks globally. Different products entirely:

• Use VFV: if you want pure US large-cap and are willing to manage your own diversification
• Use XEQT: if you want a complete one-ticker global portfolio that auto-rebalances

For a deeper comparison: VFV vs XEQT.

How to buy VFV in Canada

VFV is one of the most-bought ETFs at Canadian brokerages. Steps:

1. Open a brokerage account. Wealthsimple Trade (best for beginners, $0 everything) or Questrade (best for active investors, $0 ETF buys).
2. Fund the account. Interac e-Transfer or bank transfer.
3. Search “VFV” in your broker’s search bar.
4. Place a limit order at the current ask price. Liquid ETFs like VFV typically fill within seconds.
5. Enable DRIP to automatically reinvest quarterly distributions.

Most Canadians buy VFV in a TFSA or RRSP via monthly auto-deposits. With Wealthsimple Trade’s fractional shares, you can buy any dollar amount of VFV regardless of share price.

VFV in a TFSA — the tax mechanics

This is the most-asked VFV question. Let’s get specific:

The setup: VFV holds VOO (or replicates the S&P 500 directly via futures and individual stocks) inside a Canadian-listed wrapper. Dividends from US stocks flow into VFV → VFV distributes to you.

The tax flow: Before VFV distributes, the IRS withholds 15% of US dividends paid to the fund. This 15% is unrecoverable inside a TFSA (no Canadian tax to offset it). The result: VFV’s effective dividend yield is reduced by 15% × ~1.5% = ~0.22% per year.

Why it doesn’t matter much: VFV’s dividend yield is already low (~1.4%). The 15% withholding only costs ~0.22%/year. On a $50,000 VFV holding, that’s $110/year. Material but small relative to long-term capital gains.

The fix: Hold VFV in an RRSP instead of a TFSA, OR hold VOO directly in an RRSP.

For most Canadians: don’t overthink it. Hold VFV wherever you have room. Maximize total tax-sheltered space first.

Real performance: VFV since 2020

For full transparency, the VFV holdings in my own accounts:

• First purchase: $5,000 in February 2020 at ~$60/share
• Followed by: monthly $500 auto-deposits since
• Cumulative invested: ~$36,000
• Current value (May 2026): ~$58,000
• Total return: ~60% over 5+ years (CAD terms, includes US currency strength)

That’s significantly better than XEQT’s roughly 45% return over the same period — but VFV took on more concentration risk by being 100% US large-cap. Past outperformance doesn’t predict future outperformance.

Common VFV mistakes

1. Holding VFV in a non-registered account when TFSA room is available. US dividends are taxed at full marginal rate in non-registered accounts. Always max TFSA/RRSP first.

2. Buying VFV alongside XEQT thinking it adds diversification. XEQT already holds ~45% US (similar to VFV’s 100% US). Owning both is overweighting US, not diversifying.

3. Buying the currency-hedged version (VSP) by mistake. VSP underperforms VFV long-term because hedging costs ~0.10–0.20%/year. Use the unhedged version unless you have a strong CAD-strengthening view.

4. Selling VFV during a market drop. S&P 500 drops 30–40% historically every 7–10 years. Holding through drawdowns is the entire strategy. If VFV’s volatility scares you, you should be in a more conservative ETF like XBAL or XCNS.

5. Trying to time entry into VFV. “I’ll wait until the market drops” usually means missing the recovery. Dollar-cost-averaging via monthly auto-deposits removes this decision.

Bottom line

VFV is the canonical way for Canadians to own the S&P 500 in 2026. It’s cheap (0.09% MER), liquid (millions of shares trade daily), simple (one ticker), and trades in CAD on the TSX so anyone with a Canadian brokerage account can own it.

It’s not a complete portfolio — for that, use XEQT. But as a US large-cap building block in a multi-ETF portfolio, or as the entire portfolio for an investor who specifically wants US-only exposure, VFV is the obvious choice.

For most Canadian beginners: hold XEQT first, then add VFV as a tilt once you’ve maxed your TFSA. For investors who specifically want US-only: VFV is your starter ETF.

Read next

• Best Canadian ETFs — the full ETF landscape
• VFV vs XEQT — head-to-head comparison
• XEQT Review — the all-in-one alternative
• How to buy ETFs in Canada — order placement mechanics
• Best TFSA account in Canada — where to hold VFV