Q&A With Gordon Pape: Investing In The U.S.

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What is the best way to buy the S&P 500?

Q – If one wants to invest in the S&P 500, is one better off to do it on the New York exchange instead of the TSX and, if so, what would be your recommendation? – Jacques L.

A – The TSX will work just fine. You can choose between an ETF that is hedged back to Canadian dollars or one that is unhedged.

The iShares Core S&P 500 Index ETF (CAD-Hedged) trades under the symbol XSP. The average annual return for the three years to April 30 was 9.81 per cent. The unhedged version of the same fund trades as XUS. It had a three-year annual return of 18.37 per cent, the difference being the gain in the value of the U.S. dollar against the loonie.

If you expect our dollar will continue to decline against the greenback, choose XUS.


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