XIC Review 2026: The Cheapest Canadian Index ETF (0.06%)?

XIC (iShares Core S&P/TSX Capped Composite Index ETF) is a low-cost way to own the broad Canadian stock market: 217 stocks at a 0.06% MER. This review covers what XIC holds, what it costs, how it has performed and how it compares with ZCN, VCN, XIU and VDY. It is general education, not financial advice.

For US exposure, compare VFV (0.08% MER) and ZSP (0.09% MER), both S&P 500 funds. For dividend-focused Canadian equity, see VDY. The full Canadian ETF lineup is in Best Canadian ETFs 2026.

XIC at a glance

YieldMaple checked iShares Canada’s XIC page on October 8, 2026. Returns are iShares’ total returns to September 30, 2026.

In sentences: XIC charges a 0.06% MER (the management fee inside it is 0.05%), held 217 stocks and $35.3 billion in net assets, and pays distributions quarterly at a trailing yield of 1.98%. It returned 12.35% a year over 10 years and launched on February 16, 2001.

What does XIC hold?

XIC held 217 Canadian stocks on October 6, 2026, following the S&P/TSX Capped Composite Index. BMO’s fact sheet for ZCN, which tracks the same index, describes it as representing approximately 95% of the Canadian equity market, with index weights capped at 10% per company. The cap is there so that one very large company cannot dominate the fund.

Ten largest holdings on October 6, 2026, per iShares, in order:

• Royal Bank of Canada (7.61%)
• Shopify (5.56%)
• Toronto-Dominion Bank (5.44%)
• Bank of Montreal
• Bank of Nova Scotia
• Enbridge
• Canadian Imperial Bank of Commerce
• Canadian Natural Resources
• Agnico Eagle Mines
• Suncor Energy

Those ten were about 38.3% of the fund. No holding was near the cap: the largest, Royal Bank, was 7.61%.

Five largest sectors:

In sentences: financials were 33.92% of XIC, materials 18.26%, energy 16.34%, industrials 9.97% and information technology 9.14%. Banks, miners and energy companies drive most of what the fund does.

Is XIC the cheapest Canadian index ETF?

Not quite: XIC’s 0.06% MER is level with BMO’s ZCN and one basis point above Vanguard’s VCN, which charges 0.05%. In dollars, XIC’s MER is about $6 a year for every $10,000 held, and the gap to VCN is $1 a year on $10,000.

Three things explain why XIC is so widely held:

1. Low fee. 0.06%, among the lowest MERs of the Canadian broad-market ETFs YieldMaple checked.
2. Single-stock cap. The index limits any one company to 10% of its weight.
3. Long track record. XIC launched on February 16, 2001, so it has more than 25 years of history, and at $35.3 billion it is far larger than ZCN ($18.4 billion).

XIC vs ZCN, VCN, XIU and VDY

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Holdings counts are each provider’s latest checked figure (XIC and XIU on October 6, 2026; ZCN, VCN and VDY on August 31, 2026).

XIC vs ZCN

ZCN (BMO S&P/TSX Capped Composite Index ETF) tracks the same index at the same 0.06% MER. The differences:

• Provider: iShares (XIC) vs BMO (ZCN)
• Size: $35.3 billion for XIC on October 7, 2026; $18.4 billion for ZCN on August 31, 2026
• Holdings: 217 for XIC, 220 for ZCN
• History: XIC launched on February 16, 2001. ZCN launched on May 29, 2009 and has tracked this index since September 21, 2012.

Same index and same fee mean the two should deliver nearly the same result. The bid/ask spread on the day of purchase is the main practical difference.

XIC vs VCN

VCN (Vanguard FTSE Canada All Cap Index ETF) charges 0.05%, one basis point less than XIC, and held 212 stocks on August 31, 2026, per Vanguard. It follows a different index provider (FTSE rather than S&P), though both funds own largely the same large Canadian companies.

• VCN fits a reader who wants the lowest fee of the three or already holds Vanguard funds.
• XIC fits a reader who wants the S&P/TSX index or already holds iShares funds.

XIC vs XIU

XIU (iShares S&P/TSX 60 Index ETF) is the older fund, launched on September 28, 1999, and it holds only the largest Canadian companies: 61 holdings against 217 for XIC. XIU’s MER is 0.17%, which is nearly three times XIC’s. XIU is still a very large fund, at $22.7 billion.

For more: XIC vs XIU comparison.

XIC vs VDY

VDY selects Canadian stocks for dividend yield, while XIC holds the broad market weighted by company size. VDY’s trailing yield was 3.11% against 1.98% for XIC, and it held 60 stocks against 217. VDY’s MER is 0.22%.

• XIC fits a reader who wants the whole Canadian market.
• VDY fits a reader who wants more of the return paid out as income and accepts a narrower fund.

How is XIC used in a portfolio?

XIC is most often the Canadian piece of a multi-ETF portfolio, held next to US and international funds.

Use 1: Multi-ETF portfolio (most common)

Investors who use XIC usually combine it with:

• VFV or ZSP (US large-cap stocks)
• XEF or VIU (developed markets outside North America)
• XEC or VEE (emerging markets)
• A bond ETF, optional

The all-in-one fund XEQT is a useful reference for weights. On October 6, 2026 it held XIC at 24.84%, XEF at 23.97%, XEC at 4.92% and two US funds for the rest.

Use 2: A cheaper stand-in for a one-ticker ETF

Copying XEQT’s weights with XIC at 0.06%, XEF at 0.22%, XEC at 0.28% and VFV at 0.08% for the US portion gives a blended MER of about 0.12%, against 0.19% for XEQT. The gap of about 0.07 percentage points is about $70 a year on $100,000. The DIY version has to be rebalanced by hand, and VFV covers large US companies only rather than the total US market.

Use 3: A swap partner in tax-loss selling

In a non-registered account, some investors sell one Canadian index ETF at a loss and buy another to stay invested. The CRA’s capital gains guide (T4037) says a loss is superficial if the same or identical property is bought in the window from 30 calendar days before the sale to 30 calendar days after it, and a superficial loss is not deductible in that year; the loss is usually added to the adjusted cost base of the repurchased property.

The guide does not say whether two ETFs from different managers that track the same index count as identical property. XIC and ZCN follow the same index, so that pair is where the uncertainty sits. XIC and VCN follow different indexes. An accountant can say how the rule applies to a specific pair.

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How has XIC performed?

XIC returned 12.35% a year over the 10 years to September 30, 2026, per iShares. Over shorter periods to the same date it returned 19.94% over one year, 24.96% a year over three years and 15.11% a year over five. Since inception in 2001 the figure is 8.60% a year.

Between 2021 and 2025 its only losing calendar year was 2022, at −5.85%, and its strongest was 2025, at 31.59%.

Against the US market, the picture depends on the period. Over 10 years to September 30, 2026, VFV returned 15.89% a year, ahead of XIC’s 12.35%. Over five years VFV was also ahead, at 16.14% against 15.11%. Over three years XIC was ahead, at 24.96% against 24.47%, and over one year it returned 19.94% against 18.12%. Leadership between the two markets has changed hands before, and past performance does not predict future returns.

How is XIC taxed?

XIC’s distributions and growth are sheltered inside a TFSA, RRSP or FHSA and taxable in a non-registered account. iShares lists the fund as eligible for registered plans.

• TFSA and FHSA: distributions and growth are tax-free. XIC holds Canadian stocks, so no foreign withholding tax comes out of its dividends.
• RRSP: tax is deferred until withdrawal.
• Non-registered: distributions are taxable each year. Dividends from Canadian companies can qualify for the dividend tax credit, and the annual tax slip shows how each distribution is split.

At a trailing yield of 1.98%, the distributions on $10,000 of XIC come to about $198 a year. This section is general education, not tax advice.

Common XIC mistakes

1. Treating XIC as a whole portfolio. It holds Canadian stocks only, and financials alone are 33.92% of the fund.

2. Buying XIC alongside XEQT or VEQT without meaning to raise the Canadian weight. XEQT already held XIC at 24.84% of its assets on October 6, 2026. Adding more XIC on top increases the tilt to Canada.

3. Paying more for less breadth without noticing. XIU charges 0.17% for 61 holdings; XIC charges 0.06% for 217. XIU suits a reader who specifically wants only the largest companies.

4. Expecting a dividend fund’s income. XIC’s trailing yield was 1.98%, against 3.11% for VDY.

5. Expecting a smooth ride. XIC lost −5.85% in 2022 and gained 31.59% in 2025. Resource and bank stocks can swing the whole fund.

Bottom line

XIC is a low-cost, long-running Canadian broad-market ETF: 0.06% MER, $35.3 billion in net assets and 217 holdings. It is not a complete portfolio, because it holds Canadian stocks only.

• XIC fits a reader building a multi-ETF portfolio who wants the Canadian piece at a low fee.
• VCN fits a reader who wants the one-basis-point lower fee, and ZCN is the same index from BMO.
• XEQT fits a reader who would rather hold one fund that already includes XIC.

XIC trades for $0 commission at Wealthsimple, and Questrade charges $0 to buy and sell Canadian and U.S.-listed stocks and ETFs.

Read next

• Best Canadian ETFs — full landscape
• XIC vs XIU — head-to-head
• VFV Review — for the US large-cap piece
• XEQT Review — for one-ticker alternative
• VDY Review — for dividend-focused alternative