Guides · Published July 24, 2026 · 10 min read · Educational use only

ZSP vs VFV: fees, holdings and account fit in Canada

By Ryan Billings

Answer first: ZSP and VFV are close substitutes, not competing investment strategies. Both are Canadian-listed, unhedged S&P 500 ETFs. Both currently charge a 0.08% management fee and report a 0.09% management expense ratio (MER). Their holdings, currency exposure, distribution schedule, risk rating, and account-location treatment are substantially the same.

The main structural difference is under the hood. BMO says ZSP holds the S&P 500 constituents directly. Vanguard says VFV invests primarily through its US-domiciled S&P 500 ETF. For US equity exposure, that distinction does not give either Canadian wrapper a withholding-tax advantage. If a Canadian investor already owns one, changing tickers usually adds trading and tax considerations without materially changing the portfolio.

ZSP vs VFV comparison

Information checked July 24, 2026. Fees, assets, holdings, sector weights, and performance comparisons below use issuer factsheets dated June 30, 2026. Risk and tax information comes from current issuer, regulator, and CRA documents.

Fund size and security count are not performance forecasts. Both products are large, established ETFs. The one-security difference can reflect cash and index implementation, and it does not create a meaningful diversification gap. Their common market-cap-weighted benchmark drives the result.

What's in this guide

ZSP and VFV provide nearly the same exposure

Both funds follow the S&P 500, a float-adjusted, market-capitalization-weighted index of large US companies. That means the largest companies receive the largest weights. Choosing ZSP instead of VFV does not add small-cap stocks, Canadian companies, developed markets outside the United States, or emerging markets.

The June 30 factsheets show how closely the portfolios line up. Information technology represented 38.06% of ZSP and 38.0% of VFV's underlying fund display. Financials were 11.74% and 11.8%. ZSP's top holdings began with Nvidia at 7.52% and Apple at 6.59%; VFV reported 7.5% and 6.6%. Those are rounding-level differences, not distinct investment theses.

The shared index also creates the same concentration risk. About 38% in one sector is not the same as a balanced global portfolio. An S&P 500 ETF can be a useful US-equity component, but neither ticker supplies Canadian, international, or fixed-income diversification on its own. The sibling guide on XEQT vs VFV explains the difference between a global all-equity portfolio and concentrated US large-cap exposure.

Fees do not break the tie

BMO and Vanguard each report a 0.08% management fee and a 0.09% MER. The management fee pays the manager. MER is broader and includes the management fee plus applicable taxes and operating expenses, expressed as a percentage of average net assets. CIRO notes that trading costs such as commissions and bid-ask spreads sit outside the fund's ongoing management cost.

At a 0.09% MER, the annual fund expense is approximately $9 for each $10,000 invested, before compounding and changes in portfolio value. That is a simple illustration, not a separate charge withdrawn from the brokerage account. Expenses are paid inside the fund and reduce its return.

Equal MERs do not guarantee perfectly equal returns. Cash balances, portfolio trades, withholding, valuation timing, and sampling can create small tracking differences. The issuers' June 30 figures show similar, but not identical, results. A short period of outperformance by either fund is weak evidence for a forward-looking choice because both are trying to deliver the same benchmark exposure.

Direct holdings vs a US ETF underneath

ZSP's factsheet says the fund invests in S&P 500 constituent securities in their index proportions. VFV's factsheet says its displayed portfolio information is for the US-domiciled Vanguard S&P 500 ETF in which VFV primarily invests. In practice, ZSP owns the shares directly while VFV mainly owns units of the underlying Vanguard fund.

A fund-of-fund structure can centralize trading and portfolio management. A direct-holdings structure removes that intermediate fund unit. Neither fact, by itself, makes one product safer or likely to outperform. Investors should check for duplicated management fees, but Vanguard explicitly states that there is no duplication of management fees charged through VFV's underlying Vanguard fund investment.

The structures also reach the same withholding result for US stocks. BlackRock's December 2025 reference guide says Canadian-listed funds seeking US equity exposure face the same level of US withholding whether they own US stocks directly or indirectly through a US or Canadian ETF. The structural difference between ZSP and VFV matters less here than the fact that both investor-facing securities are Canadian-listed funds.

Trading in Canadian dollars does not remove currency exposure

ZSP and VFV trade on the TSX in Canadian dollars. That saves a Canadian-dollar account from having to convert cash into US dollars for the purchase. It does not hedge the portfolio's US-dollar exposure.

The Canadian-dollar value of either fund responds to two moving parts: the US-dollar value of the S&P 500 holdings and the CAD/USD exchange rate. If the Canadian dollar weakens against the US dollar, that currency move can lift the Canadian-dollar value of unchanged US assets. If the Canadian dollar strengthens, it can reduce the Canadian-dollar return. Both funds travel in the same currency lane.

Comparing a CAD unit price with a US-dollar index quote can therefore be misleading. The relevant benchmark is the S&P 500 measured in Canadian dollars, with dividends and fund costs treated consistently. For a true hedged-versus-unhedged decision, compare an unhedged fund with a product that explicitly uses currency hedging, not ZSP with VFV.

ZSP vs VFV in a TFSA, RRSP, FHSA, or taxable account

CRA guidance says units of ETFs listed on a designated exchange are common qualified investments for RRSPs, TFSAs, FHSAs, RESPs, RRIFs, and RDSPs. Both providers identify their funds as eligible for registered plans. Eligibility does not make either fund suitable for a particular goal or time horizon.

TFSA

Canadian tax on income and gains is generally sheltered when TFSA rules are followed, but US withholding occurs before underlying dividends reach either Canadian fund. The CRA says foreign taxes related to income earned in a TFSA are not counted for a foreign tax credit. ZSP's direct holdings and VFV's underlying US ETF therefore lead to the same basic withholding outcome.

RRSP

An RRSP generally defers Canadian tax until withdrawal. The Canada-US treaty treatment that can exempt directly held US-listed stocks or ETFs from US dividend withholding in an RRSP does not pass through either Canadian-listed wrapper. BlackRock's guide classifies both direct-holding and US-ETF-wrapping Canadian funds as subject to a net withholding cost in an RRSP.

This is why Canadian-listed vs US-listed ETFs is a separate decision from ZSP vs VFV. A US-listed alternative introduces currency conversion, US-dollar trading, and other implementation questions. It does not make ZSP different from VFV.

FHSA

Both funds can be qualified investments in an FHSA, but a home-purchase date may be more important than the ticker. Each fund has a medium risk rating and full equity exposure. Money needed soon may not have enough time to recover from a large decline. The FHSA investments guide covers that timeline test.

Taxable account

Distributions from these Canadian mutual fund trusts are not automatically eligible Canadian dividends merely because the units trade in Canada. US-source income can be reported as foreign non-business income on a T3. CRA guidance says foreign tax reported on the slip may support a foreign tax credit, subject to the calculation and the investor's facts. Reinvested distributions remain taxable and can affect adjusted cost base.

A sale can realize a capital gain or loss. A different ticker is not automatically different property for the superficial loss rule. CRA's archived identical-property interpretation says the determination is fact-specific and turns on whether properties are the same in all material respects. Because these funds share a benchmark but differ in issuer and structure, an investor planning to sell one at a loss and acquire the other during the relevant period should get tax advice rather than assume either outcome.

A practical ZSP vs VFV decision rule

Start with exposure. If the portfolio needs unhedged S&P 500 exposure, both products do that job. If it needs global stocks, Canadian home bias, small caps, bonds, or currency hedging, neither ticker solves the missing allocation.

For a new position, compare the brokerage's current commission, recurring-purchase support, fractional-unit availability, DRIP rules, and live bid-ask spread. These platform features can differ by account and can change. The issuers report both funds as DRIP eligible, but the broker controls whether and how a client can enrol. A limit order can control the maximum purchase price or minimum sale price, although it may not fill.

For an existing position, inertia has value. Moving from VFV to ZSP, or back, does not lower the current MER or change the benchmark. A taxable sale can create a gain, loss, and new adjusted-cost-base records. Even in a registered account, the trade can incur a spread or commission and create time out of market.

• Confirm that US large-cap equity is the intended allocation.
• Check the live spread and total brokerage cost, not only the MER.
• Check whether the platform supports the desired automatic purchase or DRIP.
• Before switching, estimate the taxable gain or loss and record-keeping impact.
• Review the whole portfolio for missing Canadian, international, small-cap, or fixed-income exposure.

Related reading

• ETF account-location comparison hub: VFV, VOO, XEQT, and QQQ
• XEQT vs VFV: global equity or S&P 500?
• Canadian-listed vs US-listed ETFs in a TFSA and RRSP
• Foreign withholding tax by Canadian account type
• ZSP account-location overview and VFV account-location overview

Frequently asked questions

Is ZSP or VFV better?

Neither is universally better. Both are Canadian-listed, unhedged S&P 500 ETFs with a 0.08% management fee, 0.09% MER, quarterly distributions, and a medium risk rating, based on issuer documents checked July 24, 2026. The practical decision can come down to trading costs, platform support, and whether an investor wants to avoid creating another tax lot.

Do ZSP and VFV hold the same stocks?

They seek to track the same S&P 500 Index, so their economic exposure is nearly identical. ZSP holds index constituents directly. VFV invests primarily through the US-domiciled Vanguard S&P 500 ETF. Small differences can result from cash, sampling, expenses, and implementation.

Is ZSP or VFV currency hedged?

Neither ZSP nor VFV is currency hedged. Both trade in Canadian dollars, but their Canadian-dollar returns still reflect changes in the value of their US stocks and the Canadian dollar relative to the US dollar.

Is ZSP or VFV better in an RRSP than a TFSA?

The account does not create a meaningful difference between ZSP and VFV. Both are Canadian-listed wrappers, so US withholding on underlying dividends generally remains in a TFSA and an RRSP. Directly held US-listed securities can receive different treaty treatment in an RRSP, but that is a different comparison.

Should I switch from VFV to ZSP, or from ZSP to VFV?

A switch rarely changes the portfolio's market exposure because both track the S&P 500 and have the same current MER. Before switching, compare any taxable capital gain or loss, commission, bid-ask spread, platform incentive, and the administrative cost of adding a second tax lot.

Sources

• BMO Global Asset Management, ZSP product page, fund description and current documents checked July 24, 2026.
• BMO Global Asset Management, ZSP factsheet, fees, assets, holdings, sector allocation, objective, and risk data as of June 30, 2026.
• BMO Global Asset Management, ZSP annual management report of fund performance, year ended December 31, 2025, including direct-holdings strategy and tracking discussion.
• Vanguard Canada, VFV product page, objective and current documents checked July 24, 2026.
• Vanguard Canada, VFV factsheet, fees, assets, underlying-fund structure, holdings, sector allocation, and eligibility as of June 30, 2026.
• Vanguard Canada, VFV ETF Facts, July 16, 2026, including risk rating, distribution schedule, trading information, and tax note.
• BlackRock Canada, Understanding Foreign Withholding Tax, December 2025, including treatment of Canadian-listed funds holding US stocks directly or through a US ETF.
• Canada Revenue Agency, Income Tax Folio S3-F10-C1, qualified investments for registered plans.
• Canada Revenue Agency, Income Tax Folio S5-F2-C1, including foreign tax credit treatment for TFSA and RRSP holdings.
• Canada Revenue Agency, Tax treatment of mutual funds, T3 foreign income, foreign tax, reinvested distributions, and capital gains.
• Canada Revenue Agency, IT-387R2 Meaning of Identical Properties (archived), the CRA's interpretive test and question-of-fact warning.
• Canadian Investment Regulatory Organization, Fees and Costs, MER, commissions, and bid-ask spreads, checked July 24, 2026.