ZSP Review 2026: BMO's Cheapest S&P 500 ETF (0.09% MER)

ZSP (BMO S&P 500 Index ETF) is BMO’s flagship Canadian-listed S&P 500 product. At 0.09% MER, it ties with Vanguard’s VFV as the cheapest way for Canadians to own the S&P 500 in CAD. I have used ZSP as a tax-loss harvest partner for VFV in my non-registered account since 2022.

At a glance

• Ticker: ZSP (TSX, CAD) / ZSP.U (TSX, USD)
• MER: 0.09%
• Index tracked: S&P 500
• Holdings: ~500 US large-cap stocks
• Currency: CAD (unhedged) — ZUE for hedged version
• Distributions: Quarterly
• Yield: ~1.2–1.5%
• Inception: November 2012 (same month as VFV)
• AUM: $20+ billion as of 2026
• Provider: BMO Global Asset Management

What ZSP holds

ZSP tracks the S&P 500 index — the same 500 large US companies as VFV, XUS, and any other S&P 500 ETF. Top 10 holdings (representing ~30% of ZSP):

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

Sector weights:

• Information Technology: ~30%
• Financials: ~13%
• Health Care: ~12%
• Consumer Discretionary: ~10%
• Communication Services: ~8%
• Industrials, Consumer Staples, Energy, Utilities, Real Estate, Materials: combined ~27%

This is identical to VFV’s exposure — both track the same index.

ZSP vs VFV — the eternal coin flip

The most-asked ZSP question: “ZSP or VFV?”

The honest answer: functionally interchangeable. Same index. Same MER. Same currency. Same registered account eligibility. Same tax treatment. Same liquidity.

Minor structural difference: ZSP holds the 500 underlying stocks directly via BMO’s index replication. VFV holds VOO (Vanguard’s US-listed S&P 500 ETF) as a wrapper. This creates microscopic tracking error differences but no investor would notice across normal holding periods.

When to pick ZSP over VFV:

• You already use BMO for banking
• You want to support a Canadian provider (BMO is Canadian; Vanguard is US)
• ZSP has a tighter spread at the moment of purchase

When to pick VFV over ZSP:

• You want Vanguard’s structural reputation
• VFV has a tighter spread at the moment of purchase
• You’re consolidating with other Vanguard products

For most Canadians: pick whichever your broker recommends or whichever has the better bid/ask. The difference is negligible.

ZSP vs alternatives

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ZSP vs ZSP.U (USD version)

ZSP trades in CAD; ZSP.U trades in USD on the TSX. Same underlying portfolio. Use ZSP.U if:

• You have a native USD account (Questrade, Interactive Brokers, Moomoo)
• You’re already holding USD cash and don’t want to convert to CAD
• You want to avoid implicit FX exposure when buying

For most Canadians using CAD accounts: regular ZSP is simpler.

ZSP vs ZUE

ZUE (BMO S&P 500 Index ETF (CAD-Hedged)) costs 0.11% MER and uses currency forwards to neutralize CAD/USD changes. Long-term, ZUE has underperformed ZSP because:

1. Hedging adds drag (~0.10–0.20%/year in derivative costs)
2. CAD has weakened against USD over the past decade

Don’t use ZUE unless you have a strong CAD-strengthening view. For most long-term Canadian investors: ZSP (unhedged).

ZSP vs VFV

Functionally identical. See above.

ZSP vs XUS

XUS (iShares Core S&P 500 Index ETF) is the iShares competitor at 0.10% MER — 0.01% more than ZSP. On $100K invested, that’s $10/year more. Negligible. ZSP wins on cost but barely.

ZSP vs VOO

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

• VOO MER: 0.03% (cheaper than ZSP’s 0.09%)
• VOO requires USD: must convert CAD → USD (1.5% FX fee on most brokers, free at Questrade with native USD account)
• VOO in TFSA: 15% US withholding tax on dividends (unrecoverable, same as ZSP)
• VOO in RRSP: 15% US withholding tax exempted under Canada-US tax treaty (saves ~0.20%/year vs ZSP)

For RRSPs with native USD accounts, VOO is more tax-efficient. For TFSAs and most CAD accounts, ZSP is operationally simpler and the cost difference is negligible.

Tax-loss harvesting with ZSP and VFV

In non-registered accounts, the CRA’s superficial loss rule says you can’t claim a capital loss if you buy “identical property” within 30 days. The CRA considers ZSP and VFV to be different ETFs (different providers, different fund structures), even though they track the same index.

This means: you can sell VFV at a loss, immediately buy ZSP, claim the tax loss, and maintain S&P 500 exposure. After 30 days, you can swap back if you want.

This is one of the cleanest tax-loss harvesting opportunities available to Canadian retail investors. On a $100,000 VFV holding that drops 15%, harvesting the $15K loss saves $4,500–7,500 in taxes (depending on your bracket).

ZSP in different account types

Account type	Notes
TFSA	15% US withholding tax applied at fund level — unrecoverable but small impact
RRSP	Same 15% US withholding tax at fund level. Hold VOO directly in RRSP for tax treaty exemption if you want maximum efficiency
FHSA	Same as TFSA tax-wise. Tax-free for first home if used.
RESP	Same as RRSP for tax purposes
Non-registered	Dividends taxed as foreign income at full marginal rate

For most Canadians: hold ZSP wherever you have room. Maximize total tax-sheltered space first.

Real performance: ZSP since 2022

For full transparency, my ZSP usage:

• Used as VFV’s tax-loss harvesting partner in my non-registered account since 2022
• Total realized losses harvested via ZSP/VFV swap: ~$3,200 over 3 years
• Tax savings (45% combined federal/provincial bracket): ~$1,440

I don’t hold ZSP as a long-term position — VFV is my primary US holding. But ZSP earns its keep as the rotation partner for tax efficiency.

Common ZSP mistakes

1. Buying both ZSP and VFV thinking it adds diversification. They track the same 500 stocks. Owning both is duplication, not diversification.

2. Choosing ZUE (hedged) instead of ZSP (unhedged). ZUE has historically underperformed by ~1–2% per year due to hedging drag plus CAD weakness. Default to unhedged.

3. Holding ZSP in a non-registered account when TFSA room is available. US dividend distributions are taxed as foreign income at full marginal rate in non-registered accounts. Always max TFSA/RRSP first.

4. Ignoring ZSP’s quarterly distributions. Distributions left as cash earn nothing. Either DRIP-reinvest into ZSP or manually deploy into other holdings.

5. Selling ZSP during a drawdown. S&P 500 has dropped 30%+ multiple times historically. Long-term holders who didn’t sell experienced full recoveries within 1–4 years. Don’t panic sell.

Bottom line

ZSP is one of the two canonical Canadian-listed S&P 500 ETFs in 2026. Same index, same MER, same currency, same liquidity as VFV. Choose based on convenience or current bid/ask spreads — there’s no meaningful long-term difference.

For most Canadians: pick ZSP or VFV (coin flip), buy it commission-free at Wealthsimple Trade or Questrade, and DRIP-reinvest distributions. For a complete portfolio, combine ZSP/VFV with Canadian (XIC), international (XEF), and emerging market (VEE) ETFs. Or use a one-ticker solution (XEQT) that includes all of these together.

If you only want US large-cap exposure: ZSP (or VFV) is the canonical choice.

Read next

• Best Canadian ETFs — full landscape
• VFV Review — the Vanguard equivalent
• XEQT Review — for one-ticker global exposure
• VFV vs XEQT — US-only vs global
• How to buy ETFs in Canada — order placement