VOO vs VFV: Should Canadians Buy the US or Canadian S&P 500 ETF? (2026)
VOO has a rock-bottom 0.03% MER but trades in US dollars. VFV is the same index in Canadian dollars at 0.09%. The real cost difference is not the MER - it is currency conversion, withholding tax and the account you hold them in. Here is how to choose.
VOO vs VFV in one sentence
Both VOO and VFV track the exact same index - the S&P 500. VFV is actually a wrapper that holds VOO, packaged in Canadian dollars on the TSX. So the question is not which index is better; it is whether the extra wrapping fee on VFV is worth avoiding the cost and hassle of converting CAD to USD to buy VOO directly. For most Canadians in a TFSA or non-registered account, VFV wins on simplicity. For long-term RRSP holders with five-figure positions, VOO is meaningfully cheaper after tax. Below is exactly how the math works.
Quick facts: how the two ETFs are built
VOO is the Vanguard S&P 500 ETF, US-domiciled, listed on NYSE Arca and traded in USD. It holds all 500 stocks in the S&P 500 directly. It is one of the largest ETFs in the world with over $1.4 trillion in assets and an industry-low MER of 0.03%.
VFV is the Vanguard S&P 500 Index ETF (CAD), Canadian-domiciled and listed on the TSX in Canadian dollars. Under the hood, VFV does not buy 500 individual stocks - it simply buys units of VOO. The 0.09% MER reflects VOO's 0.03% plus a roughly 0.06% Canadian wrapping fee. VFV is unhedged, so its CAD price moves with both the S&P 500 and the USD/CAD exchange rate.
Side-by-side comparison
| Feature | VOO | VFV |
|---|---|---|
| Issuer | Vanguard (US) | Vanguard Canada |
| Exchange | NYSE Arca | TSX |
| Currency | USD | CAD |
| Index tracked | S&P 500 | S&P 500 (via VOO) |
| MER | 0.03% | 0.09% |
| AUM | ~$1.4T USD | ~$15B CAD |
| Distribution yield | ~1.3% | ~1.2% |
| Distribution frequency | Quarterly | Quarterly |
| Currency-hedged? | N/A | No (VFV is unhedged) |
| DRIP eligible at brokers | Yes | Yes |
The real cost: MER, currency conversion and withholding tax
The 6 basis point MER gap is tiny - on a $10,000 position, that is $6 per year. The two costs that actually move the needle for a Canadian buying VOO are currency conversion and US dividend withholding tax.
Most Canadian brokers charge 1.5%-2% on retail CAD-to-USD conversion. On a $10,000 buy, that is $150-$200 - 25 years of MER savings, gone in one transaction. The fix is Norbert's gambit (buying a dual-listed stock like DLR.TO in CAD, journaling to DLR.U, then selling in USD) which cuts FX cost to roughly 0.05%, but it requires a phone call to your broker at some discount brokerages and a 2-3 day settlement wait.
On withholding tax, the US charges a 15% tax on dividends paid to foreign holders. In an RRSP, the Canada-US tax treaty exempts US-listed ETFs like VOO from this withholding - you keep 100% of the dividend. But VFV (a Canadian fund holding VOO) does not get the same treatment; the IRS withholds 15% from VOO before it reaches the Canadian fund, and you cannot reclaim it. At a 1.2% dividend yield, that is an extra 0.18% per year drag on VFV inside an RRSP compared to VOO.
Which account should you hold each in?
RRSP
- VOO is materially cheaper - no 15% US withholding tax
- MER savings + dividend tax savings ≈ 0.24%/year
- Worth doing Norbert's gambit if position is $20K+
- Hold US dollars long-term, no rush to convert back
TFSA
- VFV wins for almost everyone
- TFSA does NOT get treaty exemption - VOO loses 15% of dividends
- FX conversion cost is pure waste in a TFSA
- Same after-tax dividend whether you hold VOO or VFV here
Non-registered
- VFV is simpler; both face 15% US withholding
- You can claim the 15% as a foreign tax credit on your T1
- VOO requires tracking USD adjusted cost base (ACB) - extra paperwork
- Choose VFV unless you already hold USD
Worked example: $50,000 over 25 years
Assume you invest $50,000 today and the S&P 500 returns 8% per year for 25 years. Here is the rough end value in each scenario, after fees and applicable withholding tax:
| Scenario | Total drag/year | End value (approx.) |
|---|---|---|
| VOO in RRSP (gambit'd) | 0.03% MER only | $338,400 |
| VFV in RRSP | 0.09% MER + 0.18% WHT | $321,800 |
| VFV in TFSA | 0.09% MER + 0.18% WHT | $321,800 |
| VOO in TFSA (gambit'd) | 0.03% MER + 0.18% WHT | $326,500 |
| VFV in non-registered | 0.09% MER (WHT recoverable) | $336,200 |
The numbers tell the real story. In an RRSP, VOO saves about $16,600 over 25 years - real money, and worth the one-time Norbert's gambit. In a TFSA, the difference is only $4,700 over 25 years, and you have to factor in the $100-$200 FX cost on every contribution, which usually wipes out the savings. The answer flips with account type.
How to actually buy each one in Canada
VFV is the easy path: any Canadian broker (Wealthsimple, Questrade, TD, RBC, IBKR) lets you buy it in CAD with a market order. Wealthsimple Trade and TD Easy Trade charge $0 commission; Questrade charges $0 to buy ETFs but $4.95-$9.95 to sell.
VOO requires USD in your account. The cheapest way to get there is Norbert's gambit - buy DLR.TO (Horizons US Dollar Currency ETF) in CAD, wait two business days, ask the broker to journal it to DLR.U on the US side, then sell DLR.U for USD. Total FX cost is roughly 0.04-0.10% versus 1.5-2% for a default broker conversion. Wealthsimple makes this seamless inside their app; Questrade requires a chat or phone request to journal the shares. Once you have USD, buying VOO is a normal market order on NYSE.
What about XUS, ZSP, HXS or VSP?
VFV is not the only Canadian S&P 500 wrapper. XUS (iShares) charges 0.10%, ZSP (BMO) charges 0.09%, VSP is Vanguard's currency-hedged version (0.09%), and HXS (Horizons) is a swap-based fund that pays no dividends and so avoids US withholding tax entirely at the cost of slightly higher fees and more complex structure. For pure S&P 500 exposure, VFV, ZSP and XUS are functionally interchangeable. HXS is uniquely useful in a non-registered account where you want to defer tax on dividends as capital gains. VSP is mostly for short-horizon investors worried about USD weakening.
When VOO is NOT the right answer
- You contribute monthly in small amounts. Doing Norbert's gambit on every $500 contribution is not worth the hassle.
- You hold less than $10K total. The MER + WHT savings are smaller than your time spent on FX optimisation.
- You do not have an RRSP. Outside an RRSP, the WHT advantage of VOO disappears.
- You will need the money in CAD within 5 years. A second FX conversion eats your savings.
- Your broker does not support Norbert's gambit cleanly. RBC Direct Investing and BMO InvestorLine make this painful; the FX spread will eat your savings.
Choose in 60 seconds
PICK YOUR S&P 500 ETF
- Holding in an RRSP with $20K+ to invest? Use VOO after a Norbert's gambit. Real long-term savings.
- Holding in a TFSA? Use VFV. No tax advantage to VOO, and FX cost wins easily.
- Holding in non-registered and want low maintenance? Use VFV. Skip the USD ACB headache.
- DCA'ing monthly with small amounts at any broker? Use VFV regardless of account type.
- On Wealthsimple's USD account already? Use VOO in RRSP, VFV elsewhere.
Tracking VOO and VFV side-by-side in your portfolio
If you end up holding VOO in your RRSP and VFV in your TFSA - which is the right answer for most Canadians with substantial registered accounts - you now have two positions tracking the same index in two currencies. That makes manual rebalancing tricky: a 5% drift on VOO in USD is not the same as a 5% drift on VFV in CAD. Wealth Rebalancer normalises USD and CAD positions, totals your S&P 500 exposure across both ETFs and tells you exactly which one to top up with your next contribution to stay on plan.
Frequently asked questions
Is VOO better than VFV in a TFSA?
No. The Canada-US tax treaty exemption on US dividends only applies inside an RRSP, RRIF or LIRA. In a TFSA, both VOO and VFV pay the same 15% US withholding tax on their dividends. After adding currency conversion cost to buy VOO, VFV is the clear winner in a TFSA.
Does VFV pay foreign withholding tax?
Yes. VFV holds VOO, and the IRS withholds 15% from VOO's dividends before they reach the Canadian fund. This withholding cannot be reclaimed inside a TFSA or RRSP. Inside an RRSP, holding VOO directly avoids this withholding entirely under the tax treaty.
What is the MER of VOO vs VFV?
VOO charges 0.03% per year; VFV charges 0.09%. The 6 basis point difference equals $6 per $10,000 invested per year. On its own this is too small to matter, but combined with VOO's RRSP withholding tax advantage (about 0.18% on dividends), the total annual saving inside an RRSP is roughly 0.24%.
Should I hedge my S&P 500 ETF to CAD?
For most long-term investors, no. VFV is unhedged - if the USD strengthens against the CAD, you benefit; if it weakens, you give back gains. Over decades, currency movements wash out and the unhedged version typically wins by avoiding the 0.05-0.15% annual cost of currency hedging. Use VSP (the hedged version) only if you have a short horizon and cannot tolerate CAD strength reducing your returns.
Can I buy VOO on Wealthsimple Trade?
Yes. Wealthsimple Trade offers USD accounts on the free plan and supports both buying VOO directly with USD and converting CAD to USD via DLR.TO/DLR.U journaling. The app handles the gambit automatically when you toggle a position between currencies, which removes the main friction historically associated with holding US-listed ETFs in Canada.
Why does VFV exist if it just holds VOO?
Because most Canadians do not want to deal with currency conversion. VFV lets you buy the S&P 500 with a single CAD market order, get CAD distributions, see CAD returns and skip the ACB tracking complexity of USD holdings. Vanguard charges roughly 6 basis points on top of VOO's MER for this convenience - a small price for the simplicity outside an RRSP.