Loading the Elevenlabs Text to Speech AudioNative Player...
Table of Contents Show
The US has by far the world’s largest stock market, with many areas of opportunity for investors. Exchange-traded funds can make it easier and cheaper to add US stocks to a portfolio than traditional mutual funds.
For Canadian investors looking to invest in US stock ETFs, there are six funds that Morningstar has given Gold Medalist Ratings, meaning we believe they have the greatest chance of outperforming their categories over the long term. All six are index funds; four of them track the S&P 500, and the other two track broader total-market indexes.
iShares Core S&P 500 ETF XUSVanguard S&P 500 ETF VFVBMO S&P 500 ETF (CAD) ZSPiShares Core S&P 500 ETF (CAD-Hedged) XSPiShares Core S&P US Total Market ETF XUUVanguard US Total Market ETF VUN
Screening for the Best US Stock ETFs
We screened Canadian ETFs in the US equity fund category that received Gold Medalist Ratings that are 100% assigned by Morningstar analysts (rather than indirectly or quantitatively assigned).
Here’s a closer look at the best US stock ETFs for Canadian investors. A table with their recent performance is at the end of this article.
iShares Core S&P 500 ETF
Ticker: XUSMorningstar Medalist Rating: GoldMorningstar Rating: 5 Stars
Vanguard S&P 500 ETF
Ticker: VFVMorningstar Medalist Rating: GoldMorningstar Rating: 5 Stars
BMO S&P 500 ETF (CAD)
Ticker: ZSPMorningstar Medalist Rating: GoldMorningstar Rating: 5 Stars
These funds all track the S&P 500, an index of the large-cap stocks that make up roughly 80% of the US stock market’s capitalization.
“The end portfolio is well-diversified and accurately resembles the US large-cap opportunity set. This allows the strategy to capitalize on its low fee, ultimately delivering sound long-term performance on both an absolute and risk-adjusted basis.”
—Morningstar Manager Research
iShares Core S&P 500 ETF (CAD-Hedged)
Ticker: XSPMorningstar Medalist Rating: GoldMorningstar Rating: 3 Stars
The currency-hedged version of the iShares fund uses derivatives to offset fluctuations in the exchange rate between the US and Canadian dollars.
“While currency hedging can lessen volatility, it doesn’t necessarily lead to better or worse performance over the long run, and it increases costs,”
—Morningstar Manager Research
iShares Core S&P US Total Market ETF
Ticker: XUUMorningstar Medalist Rating: GoldMorningstar Rating: Four Stars
Vanguard US Total Market ETF
Ticker: VUNMorningstar Medalist Rating: GoldMorningstar Rating: Four Stars
These funds track total market indexes, and offer “a highly efficient and well-diversified exposure to the entire US stock market while charging a rock-bottom fee—a recipe for success over the long run,” according to Morningstar Manager Research.
The funds are both extremely broad, though the Vanguard fund offers slightly broader exposure encompassing “the entire investable US opportunity set,” as opposed to the iShares fund, which captures “nearly the entire investable US opportunity set.”
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
Keep Up to Date with the Most Important News
