XEQT vs SPY: Which ETF is Better for Canadian Investors in 2025?

When it comes to building a long-term investment portfolio, Canadian investors often face a crucial decision: XEQT vs SPY. Both are popular ETFs, but they serve very different purposes and cater to different investment philosophies.

XEQT (iShares Core Equity ETF Portfolio) offers global diversification with a Canadian focus, while SPY (SPDR S&P 500 ETF) provides concentrated exposure to the 500 largest US companies. Which one should you choose for your portfolio?

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In this comprehensive comparison, we’ll break down XEQT vs SPY across all key metrics to help you make an informed decision for your investment strategy.

Quick Overview: XEQT vs SPY

Feature XEQT (iShares) SPY (SPDR)
Ticker XEQT.TO SPY (US)
Provider iShares (BlackRock) State Street
Geographic Focus Global (25% Canada) US Only (S&P 500)
Number of Holdings ~9,000+ companies 500 companies
MER 0.20% 0.0945%
Currency CAD USD
Launch Date 2019 1993
Assets Under Management ~$4.5B+ ~$500B+

What is XEQT?

XEQT (iShares Core Equity ETF Portfolio) is an all-in-one global equity ETF designed specifically for Canadian investors. It provides 100% equity exposure across global markets with a Canadian home country bias.

XEQT’s Geographic Allocation:

Key Features of XEQT:

What is SPY?

SPY (SPDR S&P 500 ETF) is the world’s largest and most liquid ETF, tracking the S&P 500 index. It provides exposure to the 500 largest publicly traded companies in the United States.

SPY’s Top Holdings (as of 2025):

Key Features of SPY:

Detailed Comparison: XEQT vs SPY

1. Diversification

XEQT - Global Diversification:

SPY - US Concentration:

Winner: XEQT (for diversification)

2. Risk and Volatility

XEQT - Lower Risk:

SPY - Higher Risk:

Winner: XEQT (for lower risk)

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3. Historical Performance

XEQT Performance (Since 2019):

SPY Performance (Same Period):

Winner: SPY (for higher returns, but with higher risk)

4. Costs and Fees

XEQT:

SPY:

Winner: SPY (lower MER, but XEQT avoids currency costs)

5. Tax Efficiency for Canadian Investors

XEQT - Canadian Tax Optimization:

SPY - US Tax Implications:

Winner: XEQT (for Canadian tax efficiency)

Which ETF is Right for You?

Choose XEQT if:

Choose SPY if:

Portfolio Strategies with XEQT vs SPY

Conservative Strategy (XEQT Focus):

Balanced Strategy (Mixed Approach):

Aggressive Strategy (SPY Focus):

Pure Approaches:

Currency Considerations for Canadian Investors

XEQT - No Currency Risk:

SPY - Currency Risk:

For Canadian investors, XEQT eliminates currency complexity.

Long-Term Performance Expectations

XEQT - Moderate Growth with Stability:

SPY - Higher Growth with Volatility:

Past performance doesn’t guarantee future results, but historical data suggests SPY may offer higher returns with higher risk.

Common Questions About XEQT vs SPY

“Can I own both XEQT and SPY?”

Yes! Many investors combine both for a balanced approach. This gives you global diversification with additional US exposure.

“Which one is better for beginners?”

XEQT is generally better for beginners because it’s simpler, more diversified, and designed for Canadian investors.

“What about currency-hedged versions of SPY?”

Currency-hedged SPY ETFs exist (like XSP), but they add complexity and costs. XEQT’s Canadian focus eliminates this need.

“Which one has better dividends?”

Both pay dividends, but XEQT’s Canadian portion qualifies for the dividend tax credit, making it more tax-efficient for Canadian investors.

“What about during market crashes?”

XEQT’s diversification typically provides better downside protection, while SPY may experience sharper declines but also sharper recoveries.

How to Buy XEQT or SPY in Canada

Buying XEQT:

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  1. Open a Canadian brokerage account (Wealthsimple Trade recommended)
  2. Fund your account in Canadian dollars
  3. Search for “XEQT” on your platform
  4. Place your order - that’s it!

Buying SPY:

  1. Open a brokerage account that supports US trading
  2. Convert CAD to USD (or use CAD-hedged version)
  3. Search for “SPY” on your platform
  4. Place your order in US dollars

Wealthsimple Trade supports both XEQT and SPY trading.

Tax Implications in Different Accounts

TFSA (Tax-Free Savings Account):

XEQT:

SPY:

RRSP (Registered Retirement Savings Plan):

XEQT:

SPY:

Non-Registered Account:

XEQT:

SPY:

The Verdict: XEQT vs SPY

XEQT Wins for Most Canadian Investors Because:

✅ Better diversification (global vs US-only)
✅ Lower risk (geographic and sector diversification)
✅ Canadian tax advantages (dividend tax credit)
✅ No currency complexity (trades in CAD)
✅ Simpler for beginners (all-in-one solution)
✅ Better for long-term wealth building (consistent growth)

SPY Wins for Specific Investors Who:

✅ Want maximum US exposure
✅ Are comfortable with higher risk
✅ Believe in US market outperformance
✅ Want the most liquid ETF
✅ Are willing to manage currency conversion

My Recommendation: Start with XEQT

For most Canadian investors, XEQT is the better choice because it provides:

You can always add SPY later if you want additional US exposure, but XEQT gives you a solid foundation for long-term wealth building.

Ready to Start Investing?

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Whether you choose XEQT, SPY, or both, the key is to start investing early and stay consistent. Both ETFs offer excellent long-term growth potential, but XEQT’s Canadian focus and global diversification make it the better choice for most Canadian investors.

Remember: The best investment strategy is the one you can stick with long-term.

Disclosure: This post contains referral links. I may receive compensation if you sign up through these links, but this doesn’t affect my honest assessment. I genuinely believe both XEQT and SPY are excellent choices, with XEQT being better suited for most Canadian investors.