XEQT vs SPY: Side-by-Side Comparison for Canadians

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?

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.

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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	~8,300 companies	500 companies
MER	0.19%	0.0945%
Currency	CAD	USD
Launch Date	2019	1993
Assets Under Management	~$24.6B	~$793B

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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:

• Canada: ~25% (home country bias)
• United States: ~45%
• International Developed: ~25%
• Emerging Markets: ~5%

Key Features of XEQT:

• Global diversification in one ETF
• Canadian tax optimization
• Automatic rebalancing
• Low management fees (0.19% MER)
• Trades in Canadian dollars

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What is SPY?

SPY (SPDR S&P 500 ETF) tracks 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 November 10, 2026, per State Street):

• Apple Inc. (AAPL) - 7.84%
• NVIDIA Corporation (NVDA) - 6.30%
• Microsoft Corporation (MSFT) - 6.10%
• Amazon.com Inc. (AMZN) - 4.10%
• Alphabet Inc. (GOOGL) - 2.60%

Key Features of SPY:

• US-only focus (S&P 500 companies)
• Extremely liquid (very high trading volume)
• Market-cap weighted
• Trades in US dollars

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Detailed Comparison: XEQT vs SPY

1. Diversification

XEQT - Global Diversification:

• ~8,300 companies across multiple countries
• Reduced single-country risk
• Exposure to different economic cycles
• Currency diversification

SPY - US Concentration:

• 500 companies in one country
• Higher single-country risk
• Dependent on US economic performance
• No international diversification

Winner: XEQT (for diversification)

2. Risk and Volatility

XEQT - Lower Risk:

• Geographic diversification reduces volatility
• Sector diversification across global markets
• Currency risk is not hedged — its foreign holdings still move with exchange rates
• More stable during regional downturns

SPY - Higher Risk:

• Single-country concentration increases volatility
• Sector concentration in US markets
• Currency risk for Canadian investors
• More volatile during US market downturns

Winner: XEQT (for lower risk)

3. Costs and Fees

XEQT:

• MER: 0.19%
• Trading: Commission-free on most Canadian platforms
• Currency: No conversion fees (CAD)

SPY:

• MER: 0.0945%
• Trading: Commission-free on most platforms
• Currency: Conversion fees for Canadian investors

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

4. Tax Efficiency for Canadian Investors

XEQT - Canadian Tax Optimization:

• Canadian dividends qualify for dividend tax credit
• Canadian tax reporting (T3, T5 slips)
• No currency conversion for tax purposes

SPY - US Tax Implications:

• US dividends subject to 15% withholding tax
• Foreign tax reporting required
• Currency conversion for Canadian investors
• No Canadian dividend tax credit

Winner: XEQT (for Canadian tax efficiency)

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Which ETF is Right for You?

Choose XEQT if:

• You want global diversification with Canadian focus
• You prefer lower risk and more stable returns
• You want Canadian tax advantages
• You’re looking for a set-and-forget approach
• You want to avoid currency conversion costs
• You’re a beginner investor seeking simplicity

Choose SPY if:

• You want maximum US market exposure
• You’re comfortable with higher risk for potentially higher returns
• You want a highly liquid ETF
• You’re willing to manage currency conversion
• You want the lowest fees possible
• You have a strong belief in US market outperformance

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Portfolio Strategies with XEQT vs SPY

Conservative Strategy (XEQT Focus):

• 80% XEQT (global diversification)
• 20% Bonds (XBB or ZAG)

Balanced Strategy (Mixed Approach):

• 60% XEQT (global diversification)
• 40% SPY (US concentration)

Aggressive Strategy (SPY Focus):

• 70% SPY (US concentration)
• 30% XEQT (global diversification)

Pure Approaches:

• 100% XEQT (global diversification only)
• 100% SPY (US concentration only)

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Currency Considerations for Canadian Investors

XEQT - Trades in CAD, but Still Has Currency Exposure:

• Trades in CAD on Canadian exchanges
• No conversion fees
• Simplified tax reporting
• Easier portfolio management
• Currency exposure remains: XEQT’s foreign holdings still rise and fall with exchange rates — trading in CAD removes the conversion step, not the currency risk

SPY - Currency Risk:

• Trades in USD (or CAD-hedged versions)
• Currency conversion required
• Exchange rate fluctuations affect returns
• More complex for Canadian investors

For Canadian investors, XEQT eliminates currency conversion, but not currency exposure.

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Long-Term Performance Expectations

XEQT - Moderate Growth with Stability:

• Lower volatility due to diversification
• More consistent performance across market cycles
• Better for risk-averse investors

SPY - Higher Growth with Volatility:

• Higher volatility due to concentration
• More variable performance across cycles
• Better for risk-tolerant investors

Past performance doesn’t guarantee future results.

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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 trades in Canadian dollars, which eliminates the conversion step (though not the underlying currency exposure).

“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.

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How to Buy XEQT or SPY in Canada

Buying XEQT:

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.

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Tax Implications in Different Accounts

TFSA (Tax-Free Savings Account):

XEQT:

• All growth is tax-free
• No dividend tax credit (but also no tax)
• Simple Canadian tax reporting

SPY:

• All growth is tax-free
• 15% US withholding tax on dividends
• Currency conversion for reporting

RRSP (Registered Retirement Savings Plan):

XEQT:

• Tax-deferred growth
• US withholding tax still applies inside the fund — the RRSP treaty exemption only covers US securities held directly, not US exposure held through a Canadian ETF
• Canadian tax reporting

SPY:

• Tax-deferred growth
• No US withholding tax (treaty benefit)
• Foreign tax reporting

Non-Registered Account:

XEQT:

• Canadian dividends get tax credit
• Foreign dividends subject to withholding tax
• Capital gains at 50% inclusion rate

SPY:

• US dividends subject to 15% withholding tax
• Capital gains at 50% inclusion rate
• Currency conversion for tax reporting

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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 a highly liquid ETF
✅ Are willing to manage currency conversion

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My Recommendation: Start with XEQT

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

• Global diversification with Canadian focus
• Lower risk and more stable returns
• Canadian tax advantages
• Simplified investing without currency complexity
• Professional management of asset allocation

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

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Ready to Start Investing?

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.

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Related Reading

• What is XEQT? A Comprehensive Guide
• XEQT vs S&P 500: Which is Better?
• VFV vs XEQT: An In-Depth Comparison
• XEQT Holdings Breakdown: What You Actually Own
• Get started with Wealthsimple and earn a $25 bonus

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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.