Q: What are the pros and cons for a Canadian to put money in Vanguard S&P 500 ETF Portfolio (VFV.TO) vs. a Vanguard S&P 500 ETF Portfolio (VOO)?
5i Research Answer:
VFV holds 99.5% of its holdings in VOO, and since it is a Canadian domiciled fund that only owns units in a US ETF, Level 1 holding taxes are applied to all accounts and it is not withholding tax exempt within an RRSP, for example. Holding VOO in an RRSP would be withholding tax exempt, however.
VOO has lower fees (0.03% for VOO vs. VFV at 0.09%). VFV is denominated in Canadian dollars, thus avoiding currency conversion fees. Overall, we give VOO the slight edge, although it does require US dollars to be purchased.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.