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BMO S&P 500 Index ETF (ZSP)
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Global X S&P 500 Index Corporate Class ETF (HXS)
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Vanguard S&P 500 Index ETF (VFV)
I am looking for the best ETF to hold in my TFSA account that follows the S&P 500 index along with the reasons for your particular preference?
I understand that since HXS does have any distributions, there is no withholding tax to be concerned with which is an advantage. On the other hand, due to the distinct tax efficient structure of HXS, the MER on the HXS is higher than VFV and other similar ETFs that track the same index.
Given that both ETFs track the same index is there a clear winner for a TFSA account?
Thank you and I'll await your sage advice.
HXS has an MER of 0.11% and an AUM of $2.3B, whereas ZSP has an AUM of $12.2B, an MER of 0.09%, and a yield of 1.3%, and VFV has an AUM of $10.2B, an MER of 0.09%, and a yield of 1.2%. a 15% withholding tax is applicable for VFV and ZSP in a TFSA, and this equates to roughly 0.195% for ZSP and 0.18% for VFV, and the difference in MER's between the funds is 0.02%. Therefore, although the MER is higher in HXS, there are greater savings through not paying a withholding tax. Overall, we would give HXS the slight edge in efficiency and expenses, although, the advantage is marginal, and an investor needs to also consider the liquidity difference between the funds.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.