2 Best ETFs for RRSP in Canada (June 2026)
The best ETFs for an RRSP in Canada include VFV.TO (~0.06% MER) and XUU.TO (~0.06%), which provide low-cost exposure to U.S. equities. RRSPs are ideal for holding foreign investments due to tax deferral and potential withholding tax advantages, making them well-suited for long-term global growth strategies.
Choosing the best ETFs for an RRSP in Canada is about maximizing tax-deferred growth while improving tax efficiency—especially on foreign investments. Unlike a TFSA, an RRSP has unique advantages when holding U.S. equities due to treaty benefits.
ETFs like VFV.TO and XUU.TO are popular because they provide broad exposure to U.S. markets, which can be more tax-efficient inside an RRSP. This makes RRSPs ideal for holding foreign equities and long-term growth assets.
In this guide, we break down the best ETFs for an RRSP in Canada, focusing on tax efficiency, diversification, and long-term portfolio strategy.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top VFV.TO Vanguard S&P 500 Index ETF | — | $32.9B | 0.89% | +11.90% | +30.20% |
XUU.TO iShares Core S&P US Total Market | — | $4.5B | 1.09% | +12.31% | +29.59% |
What Is an ETF?
The best ETF strategy for an RRSP in Canada is to prioritize tax-efficient exposure to foreign equities—especially U.S. stocks—while maintaining broad diversification.
For example, VFV.TO (~0.06% MER) tracks the S&P 500, while XUU.TO (~0.06%) provides total U.S. market exposure. XEF.TO (~0.22%) adds developed international exposure, and XEC.TO (~0.26%) covers emerging markets.
One key advantage of RRSPs is that U.S.-listed ETFs (like VTI or IVV) can avoid U.S. dividend withholding tax entirely. Even Canadian-listed ETFs benefit from tax deferral, making RRSPs well-suited for global equity allocation and long-term investing.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
Vanguard S&P 500 Index ETF
$186.96
+11.90% YTD
Vanguard S&P 500 Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad U.S. equity index that measures the investment return of large-capitalization U.S. stocks. Currently, this Vanguard ETF seeks to track the S&P 500 Index (or any successor thereto). It invests directly or indirectly primarily in stocks of U.S. companies.
Returns
YTD
+11.90%
1Y
+30.20%
3Y
+23.87%
5Y
+16.88%
iShares Core S&P US Total Market
$77.17
+12.31% YTD
NA
Returns
YTD
+12.31%
1Y
+29.59%
3Y
+23.58%
5Y
+15.93%
Pros & Cons
Pros
- Tax-deferred growth on all investments
- U.S. dividend withholding tax can be avoided with U.S.-listed ETFs
- Ideal for holding foreign equities and global diversification
- Helps reduce current taxable income through contributions
Cons
- Withdrawals are fully taxable as income
- Less flexibility compared to TFSA (withdrawals are not re-contributed easily)
- Over-concentration in foreign equities may increase currency exposure
- Contribution room is limited and tied to income
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best ETF for an RRSP in Canada?
VFV.TO and XUU.TO are popular RRSP choices because they provide low-cost exposure to U.S. equities. Many investors also include international ETFs like XEF.TO and XEC.TO for broader diversification.
Why are U.S. ETFs better in an RRSP?
U.S.-listed ETFs held in an RRSP can avoid U.S. dividend withholding tax due to the Canada-U.S. tax treaty. This makes RRSPs more tax-efficient for holding U.S. equities compared to TFSAs.
Should I hold Canadian ETFs in an RRSP?
Yes, but many investors prioritize foreign equities in RRSPs for tax efficiency. Canadian equities are often better placed in a TFSA or non-registered account due to dividend tax advantages.