In this article, we discuss the 5 best Canadian ETFs. If you want to read our discussion on the Canadian economy, you can go directly to the 10 Best Canadian ETFs.
5. iShares Core S&P 500 Index ETF (XUS.TO)
5-Year Price Performance: 57.6%
Total Net Assets as of September 21, 2023: C$5.07 billion
Expense Ratio: 0.09%
Number of Holdings: 1
iShares Core S&P 500 Index ETF (XUS.TO) provides broad exposure to the US stock market and large-cap equities by investing directly in the iShares Core S&P 500 ETF (NYSEARCA:IVV). The ETF is managed by BlackRock’s Canadian iShares division along with Royal Bank of Canada (RBC). The ETF has an average daily trading volume of 103,320 shares. Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA) are the top four holdings of the underlying ETF with a combined weight of 20.3% of total assets.
Here’s what Baron Funds said about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) Corporation is a fabless semiconductor company focused on designing chips and software for gaming and accelerated computing. Shares continued their torrid first quarter rise, increasing 52.3% in the second quarter (now up 190% year-to-date), after the company reported a meaningful acceleration in demand for its data center GPUs, which drove a material guidance beat with revenues expected to increase from $7.2 billion to approximately $11 billion sequentially. This unprecedented acceleration is driven by growing demand for GenAI. We are at the tipping point of a new era of computing with NVIDIA at its epicenter. While the opportunity within the datacenter installed base is already large at approximately $1 trillion, the pace of innovation in AI in general, and GenAI in particular, should drive a significant expansion in the addressable market, as AI creates a new way for human-computer interaction through language, and as companies are better able to utilize their data for decision-making. We remain shareholders as we believe NVIDIA’s end-to-end AI platform and the ecosystem it has cultivated over the last 15 years will benefit the company for years to come.”
4. BMO S&P 500 Index ETF (USD) (ZSP.TO)
5-Year Price Performance: 58.2%
Total Net Assets as of September 21, 2023: C$1.89 billion
Expense Ratio: 0.09%
Number of Holdings: 505
The BMO S&P 500 Index ETF (USD) (ZSP.TO) tracks the performance of the S&P 500 Index. The ETF is denominated in US dollars, setting it apart from most S&P 500 ETFs in Canada. The ETF is an ideal investment for Canadian investors who are looking for exposure to the US equity market in US dollars. The top 10 holdings of the ETF represent 30.62% of the total assets. The BMO S&P 500 Index ETF (USD) (ZSP.TO) is one of the 184 ETFs offered by BMO.
3. Vanguard S&P 500 Index ETF (VFV.TO)
5-Year Price Performance: 58.8%
Total Net Assets as of September 21, 2023: C$9.11 billion
Expense Ratio: 0.09%
Number of Holdings: 514
Vanguard S&P 500 Index ETF (VFV.TO) is another ETF that is focused on tracking the performance of the S&P 500 Index. The ETF is operated by Vanguard, which is the third biggest player in the Canadian ETF industry, with an AUM of C$57.86 billion. The financial services firm offers 37 ETFs to the Canadian market. Vanguard S&P 500 Index ETF (VFV.TO) is the biggest ETF in terms of AUM on our list of the best Canadian ETFs.
2. Horizons S&P 500 Index ETF (HXS.TO)
5-Year Price Performance: 69.9%
Total Net Assets as of September 21, 2023: C$2.45 billion
Expense Ratio: 0.11%
Number of Holdings: 2
Horizons S&P 500 Index ETF (HXS.TO) is operated by Horizons ETFs Management, which has the distinction of being the fourth biggest ETF operator in Canada with an AUM of C$27.73 billion. The ETF provider has a diverse portfolio of 111 ETFs. In April 2017, Horizons ETFs Management came out with the first ETF that focused on the cannabis industry, showcasing its innovative approach within the industry.
1. iShares S&P/TSX Capped Information Technology Index ETF (XIT.TO)
5-Year Price Performance: 108.7%
Total Net Assets as of September 21, 2023: C$637.17 million
Expense Ratio: 0.60%
Number of Holdings: 24
iShares S&P/TSX Capped Information Technology Index ETF (XIT.TO) provides exposure to major Canadian IT companies through an index-based approach.
Shopify Inc. (NYSE: SHOP), headquartered in Ottawa, Ontario, holds the largest position within the ETF, accounting for a weight of 26.92%. Following closely, Constellation Software Inc. (CSU.TO) secures the second-largest position with a weight of 24.42%. iShares S&P/TSX Capped Information Technology Index ETF (XIT.TO) has the highest expense ratio among all the ETFs on our list.
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