How to Invest in the S&P 500 from Canada (2026 Guide)

The S&P 500 is the most-watched index on earth — and Canadians have easy, low-cost access to it. Here's which ETF to buy, where to hold it, and one tax trap that catches investors off guard.

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The S&P 500 is an index of the 500 largest publicly traded companies in the United States — Apple, Microsoft, Amazon, Nvidia, and hundreds more. It has returned roughly 10% per year on average over the past century, making it one of the most compelling long-term investment vehicles available anywhere in the world.

Canadians can get full exposure to the S&P 500 through ETFs that trade right on the Toronto Stock Exchange (TSX) in Canadian dollars, for as little as 0.09% per year in fees. You don't need a US brokerage account, and you don't need to convert currency first.

Here's a complete guide to doing it right.

Why Canadian investors want S&P 500 exposure

Canada's stock market (the TSX) is heavily concentrated in three sectors: financials, energy, and materials. Together those three sectors make up well over 50% of the TSX Composite. That leaves Canadian investors with very little exposure to the sectors that have driven global market returns over the past two decades — technology, healthcare, and consumer discretionary.

The S&P 500 fixes that. It's roughly 30% technology, with broad representation across every major industry. Adding it to a Canada-heavy portfolio immediately diversifies your sector exposure and gives you access to the world's largest companies.

Currency exposure is also a factor: holding USD assets in your portfolio provides a natural hedge against a falling Canadian dollar. When global risk rises and CAD weakens, your US holdings tend to offset some of the damage.

The best Canadian-listed S&P 500 ETFs

These ETFs all track the S&P 500 index and trade on the TSX in CAD. You can buy them at any Canadian brokerage without currency conversion.

All four are excellent products. The main differences are issuer preference, distribution frequency, and whether you want currency hedging. For most long-term investors, VFV or ZSP are the default picks — both are cheap, liquid, and unhedged.

Hedged vs unhedged: which should you choose?

This is the most common point of confusion for new Canadian investors buying US index ETFs.

Unhedged ETFs (VFV, ZSP, XUS) give you the S&P 500 return in USD, then converted to CAD. If the US dollar strengthens against the Canadian dollar, your return is boosted. If the CAD strengthens, it's reduced. Your portfolio effectively holds a mix of S&P 500 risk and USD/CAD currency risk.

Hedged ETFs (VSP, ZUE) use currency derivatives to remove the USD/CAD exchange rate effect. You get the S&P 500 return as if it were a Canadian-dollar asset.

Which is better? For most long-term investors, unhedged wins for three reasons:

• Hedging costs money. Currency derivatives create ongoing drag that compounds over time.
• Currency diversification has value. USD exposure provides a partial buffer when global risk rises and CAD weakens.
• Over long time horizons, currency movements tend to mean-revert. The short-term noise averages out.

Hedged ETFs are most useful for investors with a short time horizon or for those who are already heavily exposed to USD through other means.

What about US-listed ETFs: VOO, SPY, IVV?

VOO (Vanguard S&P 500 ETF), SPY (SPDR S&P 500 ETF Trust), and IVV (iShares Core S&P 500 ETF) are the US-listed versions. VOO has the lowest MER of any S&P 500 ETF at 0.03%, which beats VFV's 0.09%.

However, for most Canadians, the fee advantage disappears when you account for the full picture:

• Currency conversion costs (Norbert's Gambit reduces this, but adds complexity)
• US estate tax exposure for estates over ~US$60,000 in US-situs assets
• 15% US withholding tax on dividends when held in a TFSA (you cannot recover this)

The RRSP is the exception: under the Canada-US tax treaty, US-listed ETFs held in an RRSP are exempt from the 15% dividend withholding tax. If you have a large RRSP and want to squeeze out every basis point of fee, holding VOO directly in your RRSP is the optimal strategy.

Where to hold your S&P 500 ETF

Where to buy S&P 500 ETFs in Canada

Any Canadian brokerage can buy these ETFs. Three stand out for self-directed investors:

Questrade — offers free ETF purchases (you pay only when you sell). A strong choice if you're making regular contributions, since you won't pay commission on each buy order.

Wealthsimple Trade — fully commission-free on both buys and sells. No USD account option, so you'll pay the FX spread if you want to hold US-listed ETFs, but for Canadian-listed ETFs like VFV, it's seamless.

IBKR (Interactive Brokers) — lowest commissions for active investors, genuine USD accounts (useful for VOO in your RRSP), and the best platform for multi-currency management. Steeper learning curve than the above two.

Should you own only the S&P 500?

The S&P 500 is a powerful building block — but it's not a complete portfolio. It gives you 500 large US companies, which is excellent diversification within the US. What it doesn't give you is:

• Canadian market exposure (useful for avoiding foreign withholding tax on dividends)
• International developed markets (Europe, Japan, Australia)
• Emerging markets (China, India, Brazil)
• Small-cap or value tilts
• Fixed income or bonds for volatility dampening

Many Canadian investors combine the S&P 500 with a Canadian equity ETF (like XIC or VCN) and an international ETF (like XEF or VIU) to build a complete global portfolio. Alternatively, an all-in-one ETF like XEQT or VEQT already bundles US, Canadian, and international exposure — with the S&P 500 making up roughly 45% of XEQT's holdings.

The bottom line

Investing in the S&P 500 from Canada is straightforward: buy VFV or ZSP at any Canadian brokerage. Hold it in your TFSA (for tax-free growth) or your RRSP. Leave it alone for decades.

The only meaningful decision most investors face is hedged vs unhedged — and for long-term investors, unhedged (VFV, ZSP, XUS) is almost always the right answer. The currency exposure is a feature, not a bug.

If you want the absolute minimum fee and you have a large RRSP, consider using VOO (0.03% MER) inside the RRSP where the withholding tax exemption applies. Everywhere else, stick to the Canadian-listed equivalents.

Frequently asked questions