VFV vs XUS vs VOO: Holding the S&P 500 as a Canadian
This comparison is under the how to invest in Canada hub. The account matrix is US withholding by account. Getting the Canadian dollars into US dollars, if you choose VOO, is Norbert's gambit or the broker's own conversion. A global all-in-one is a different product. That comparison is XEQT versus VEQT.
- VFV: management fee 0.08%, MER 0.08%, 12-month yield 0.84% as of 31 August 2026. It holds the US-domiciled S&P 500 ETF. Vanguard says the management fee is reduced so you do not pay the underlying fee twice.
- VOO: total annual fund operating expenses 0.03% in the prospectus (management fees 0.02%, other expenses 0.01%).
- XUS: management fee 0.08% since 12 January 2023, MER 0.09%. Open the holdings before you assume it is, or is not, a wrapper around a US-listed iShares ETF.
- Article X caps portfolio dividends at 15%. Article XXI can exempt an RRSP when the plan holds the US security directly.
- A 1.5% currency conversion on the way into VOO can exceed many years of the MER gap.
Choose VOO if… the account is an RRSP or RRIF, you can hold USD, and the dividend exemption is the point. Choose XUS if… you want iShares rather than Vanguard and you have checked whether the holding is the stocks or a US-listed ETF. The MER difference versus VFV is 0.01 percentage point on the pages reviewed.
What are the posted costs?
| VFV | XUS | VOO | |
|---|---|---|---|
| Listing | Toronto, Canadian dollars | Toronto. CAD units, and BlackRock also lists USD units as XUS.U | United States, US dollars |
| What it owns | Vanguard says it invests primarily in the US-domiciled Vanguard S&P 500 ETF | Seeks the S&P 500 net of expenses, by holding iShares ETFs and/or US stocks. Confirm the current holdings list. | The S&P 500 stocks themselves. Expense ratio 0.03%. |
| Fee | MER 0.08%. Management fee 0.08%. | MER 0.09%. Management fee 0.08%. | 0.03% total annual operating expenses. |
| RRSP treaty exemption on the dividend | No. The US payer sees the US fund VFV owns, not your RRSP. | Only if the fund's withholding is taken at a level your RRSP can stand in front of. A US-listed ETF inside XUS is the VFV problem. Direct stocks inside a Canadian fund are still withheld at the fund. Read the holdings. | Yes, if the RRSP or RRIF is the beneficial owner and the broker has the paperwork. Article XXI. |
| TFSA | Simple. Withholding inside the US fund is not recoverable. There was no exemption to recover. | Same account result. Confirm the product fee, not a myth about a Canadian ticker. | You pay to convert currency, and the 15% is still not creditable. |
VFV's benchmark on the Vanguard page is labelled "S&P 500 (CAD NY Rate) NTR 15%." That label is the net-of-15% index, which matches the treaty rate on portfolio dividends. It is not a promise that your personal rate is 15%. Without a W-8BEN, the IRS instructions say withholding is 30%.
What does the wrapper cost in tax?
VFV's 12-month yield was 0.84% as of 31 August 2026. On $100,000 that is $840 if the yield described a flat balance. Fifteen percent of $840 is $126. VFV's 2025 distribution table shows foreign income of $1.81097 per unit and foreign tax paid of $0.28441, about 15.7% of that foreign income. The MER gap between VFV at 0.08% and VOO at 0.03% is 0.05 percentage points, or $50 a year on $100,000. The withholding on the wrapper can be larger than the MER gap, and in an RRSP it is avoidable by holding VOO directly. In a TFSA it is not avoidable by switching to VOO. You would add a currency conversion and keep the withholding.
Questrade and Wealthsimple list 1.5% to convert. On $100,000 that is $1,500 once, before any spread inside the rate. The annual MER saving of VOO versus VFV, $50 on $100,000, takes 30 years of that gap to equal a single 1.5% conversion, and that ignores the withholding you might have removed in an RRSP. Run the gambit or use Interactive Brokers if the RRSP exemption is why you want VOO. Do not pay 1.5% for a 0.05 point MER story. The fee schedules are in Wealthsimple versus Questrade.
Where should the S&P 500 sit?
If the S&P 500 is your entire portfolio, you have a concentration decision, not just a ticker decision. A global fund already holds a large US weight. VEQT's US country weight was 44.99% on 31 August 2026. Adding VFV on top raises the US share again. The asset-location guide is the map: US-listed equity in the RRSP when you will actually maintain the USD side, Canadian-listed equity in the TFSA when you will not.
In a non-registered account, VFV reports foreign income and foreign tax paid. Whether you can claim it is Form T2209, and it is limited to the Canadian tax on that income. Some of the withholding may already have been taken inside VOO, before a T3 can show it. Do not assume the full 15% appears as a credit. The mechanics are in tax-efficient investing and the withholding article. Hedging the Canadian dollar on top of this, with a fund such as VSP, is a currency preference with its own cost. That discussion is the hedging guide.
Frequently asked questions
Is VFV just VOO in Canadian dollars?
Vanguard says VFV invests primarily in the US-domiciled Vanguard S&P 500 ETF, which is VOO. You buy VFV in Canadian dollars on the TSX. You do not get VOO's 0.03% expense ratio. You get VFV's 0.08% MER, which Vanguard says is not a second full fee stacked on VOO, because the Canadian management fee is reduced by the underlying expenses. You also do not get the RRSP treaty exemption, because the US fund is in the middle.
Is XUS cheaper than VFV?
No. XUS lists a 0.09% MER. VFV lists 0.08%. On $100,000 that is $90 versus $80 a year. Confirm both facts sheets. The useful difference is what each fund holds, not that hundredth of a percent. If XUS's top holding is a US-listed iShares ETF, treat it like VFV for withholding. If it holds the stocks directly, the Canadian fund still withholds at fund level, and a taxable account may see foreign tax on the T3.
Should I switch my TFSA from VFV to VOO?
No, not for the treaty. A TFSA is not an Article XXI pension arrangement. You would pay to convert currency and the withholding would still be lost. Stay in the Canadian listing unless you already have USD you need to invest and you have accepted the leak.
Does VOO avoid Canadian tax inside an RRSP?
US withholding can be zero when the RRSP holds VOO directly and the plan qualifies. Canada still taxes the withdrawal later, as ordinary income. The exemption is not a tax-free account. It is a withholding exemption on the dividend along the way. A large RRSP is still a future inclusion. The RRSP playbook is that half.
Why is VFV's yield so low if people buy it for US stocks?
The S&P 500's cash yield is modest. Vanguard's published 12-month yield on VFV was 0.84% as of 31 August 2026. Most of the historical return of that index has been price, not the dividend. Withholding applies to the dividend, not to unrealized price gains. That is why the leak is small on a broad fund and large on a high-yield US payer.
Can I hold VFV and an all-in-one ETF?
You can. You will own the S&P 500 twice, once inside the all-in-one and once on its own. That is a bigger US bet than the all-in-one already made. If that was the sentence you wrote down, fine. If it was an accident, sell the overlap inside a registered account before you sell it in a taxable one.
Sources
- Vanguard Canada: VFV
- Vanguard US: VOO
- iShares Canada: XUS
- Canada-US tax convention
- IRS Form W-8BEN instructions
The wrapper is the tax decision. The index is the same idea.
Account location moves more than five basis points of MER. The 2026 tax guide is the filing companion.
Get the 2026 Tax Guide — $49 CAD
