Fact Check: Are VFV and VOO the same?

Are VFV and VOO the Same?

The claim that VFV (Vanguard FTSE Canada All Cap Index ETF) and VOO (Vanguard S&P 500 ETF) are the same requires careful examination. Both ETFs are designed to track the performance of the S&P 500 Index, but they are structured differently and cater to different investor needs, particularly in terms of currency and tax implications. This article will explore the similarities and differences between these two funds without asserting a final verdict.

What We Know

1. Fund Structure: VFV is a Canadian-domiciled ETF that trades in Canadian dollars (CAD), while VOO is a U.S.-domiciled ETF that trades in U.S. dollars (USD) 12. Both funds aim to replicate the performance of the S&P 500 Index, which consists of 500 of the largest publicly traded companies in the U.S.

2. Tax Implications: Investors in VFV may be subject to a 15% foreign withholding tax on dividends, as it is considered a Canadian investment, whereas VOO does not impose this tax for U.S. investors 34. This can significantly affect the net returns for Canadian investors.

3. Expense Ratios: The total expense ratio for VOO is lower at 0.03%, compared to VFV's 0.09% 9. This difference in fees can impact long-term investment returns, especially for passive investment strategies.

4. Performance Tracking: Both ETFs hold the same underlying stocks, but VFV is structured as a "wrapper" around VOO, which means it does not directly hold the individual stocks of the S&P 500 but rather holds shares of VOO 5. This structural difference does not significantly affect performance but is an important distinction for investors.

5. Launch Dates: VFV was launched on November 2, 2012, while VOO was launched earlier on September 7, 2010 4. This difference in launch dates may have implications for historical performance comparisons.

Analysis

Source Evaluation

• PortfoliosLab 1 provides a straightforward comparison of the two ETFs but lacks in-depth analysis and does not discuss potential biases or conflicts of interest.

• Moomoo 2 offers a detailed overview of the differences, particularly for Canadian investors, but may have a vested interest in promoting investment products available on their platform, which could introduce bias.

• Modern Money 3 provides a clear explanation of the tax implications and structural differences, making it a reliable source for understanding the nuances between the two ETFs.

• PiggyBank 4 presents performance data but does not critically assess the implications of the differences, which could lead to a superficial understanding of the topic.

• Yahoo Finance Canada 5 discusses the structural differences but does not provide a comprehensive analysis of the potential impacts on investors, which is crucial for making informed decisions.

• Wallet Bliss 6 and StockTrades 7 offer comparisons but may not provide new insights beyond what has already been established in other sources.

• Wealth Awesome 8 and ETF Central 9 provide useful comparisons but may not delve deeply into the implications of the differences, focusing instead on surface-level metrics.

Methodological Concerns

The analysis of VFV and VOO relies heavily on performance metrics, expense ratios, and tax implications. However, a more comprehensive understanding would benefit from additional data, such as historical performance comparisons over various market conditions, investor sentiment, and the impact of currency fluctuations on returns. Furthermore, the potential for bias in promotional content from financial platforms should be considered when interpreting the findings.

Conclusion

Verdict: False

The assertion that VFV and VOO are the same is false. While both ETFs aim to track the performance of the S&P 500 Index, they differ significantly in their structure, tax implications, and expense ratios. VFV is a Canadian-domiciled ETF trading in CAD, subject to foreign withholding taxes on dividends, while VOO is U.S.-domiciled and trades in USD without such tax implications for U.S. investors. Additionally, the expense ratio for VOO is lower, which can affect long-term returns.

It is important to note that while both funds hold the same underlying stocks, the structural differences and tax considerations create distinct investment profiles. This complexity highlights the necessity for investors to carefully evaluate their options based on their individual circumstances.

However, the analysis is limited by the availability of comprehensive data on historical performance and market conditions, which could further inform the distinctions between these ETFs. Readers are encouraged to critically evaluate information and consider their own investment goals and tax situations when choosing between VFV and VOO.

Sources

1. PortfoliosLab. "VFV.TO vs. VOO — ETF Comparison Tool." Link
2. Moomoo. "VFV vs. VOO: What's the Difference Between the CAD-and USD ..." Link
3. Modern Money. "VFV & VOO: What's the Difference?" Link
4. PiggyBank. "VFV vs VOO: Which Should Canadians Invest In?" Link
5. Yahoo Finance Canada. "VFV vs. VOO - Fees." Link
6. Wallet Bliss. "VFV vs VOO Compared: Which to Choose in 2025?" Link
7. StockTrades. "VFV vs VOO - Comparing These Two ETFs in March 2025." Link
8. Wealth Awesome. "VFV & VOO: What's the Difference." Link
9. ETF Central. "VOO vs. VFV ETF comparison analysis." Link