Should I buy canadian etf or american equivalent?

The choice between Canadian and American ETFs depends on several factors, including cost, exposure to specific markets, and tax considerations. Here's a detailed analysis:

1. Cost Comparison:
   • Canadian-listed ETFs like BMO's ZSP and Vanguard's VFV are known for their low cost, with average management expense ratios (MER) around 0.09%.
   • U.S.-listed ETFs can also offer competitive costs, with some even lower than their Canadian counterparts. For instance, Vanguard S&P 500 ETF (VOO) has an expense ratio of 0.03%.
2. Market Exposure:
   • Canadian ETFs provide exposure to both domestic and international markets, including U.S. stocks.
   • American ETFs offer direct exposure to the U.S. market and may have a more extensive lineup of sector-specific ETFs.
3. Tax Considerations:
   • Canadian ETFs are considered foreign property and may incur foreign withholding taxes on dividends if held by a U.S. investor.
   • U.S.-listed ETFs can be held without the concern of foreign withholding taxes, which can be advantageous for U.S. investors.
4. Performance and Diversification:
   • Both Canadian and U.S. ETFs can provide diverse portfolios with similar index-tracking and actively managed options.
   • Historical performance data shows that U.S. ETFs like SPHB and IOO have also delivered strong returns over a 5-year period.
5. Investment Strategy and Personal Preference:
   • If an investor is looking for a more domestic-focused portfolio, Canadian ETFs can be a good option due to their inclusion of U.S. stocks.
   • Those with a more aggressive investment style or a preference for U.S. stocks might opt for U.S.-listed ETFs.

In conclusion, the choice between Canadian and U.S. ETFs depends on the investor's individual needs and preferences. Factors such as cost, market exposure, tax considerations, and personal investment goals should be considered when making this decision.