Want to Invest Without the US? Canadian Alternatives to XEQT and SPY

You can buy XEQT in Canadian dollars on the Toronto Stock Exchange, but that does not make it a Canadian investment.

XEQT owns companies around the world, including a large allocation to the United States. SPY is even more direct. It tracks the S&P 500, so it is built entirely around large American companies.

What if you want to invest without owning US companies?

The simple answer is to buy a broad Canadian stock market ETF such as XIC, VCN, or ZCN. Each gives you a portfolio of Canadian companies in one purchase.

The more honest answer is that none of them is a true replacement for XEQT or SPY. Removing the United States changes what you own, how diversified you are, and which industries drive your returns.

The short answer

If you want one ETF that invests only in Canadian companies, the strongest options are:

1. XIC, the iShares Core S&P/TSX Capped Composite Index ETF
2. VCN, the Vanguard FTSE Canada All Cap Index ETF
3. ZCN, the BMO S&P/TSX Capped Composite Index ETF

XIC is my simplest pick for most investors who want broad Canadian market exposure. It owns roughly 219 holdings and has a 0.06% management expense ratio, according to BlackRock as of August 2026.

VCN and ZCN are also reasonable choices. The differences among these three funds are much smaller than the difference between investing only in Canada and investing globally.

If you want to avoid US companies while still investing internationally, one Canadian ETF is not enough. You would need to combine a Canadian market ETF with funds that cover developed markets outside North America and emerging markets.

If your real goal is simply to buy the S&P 500 in Canadian dollars, look instead at Canadian-listed funds such as VFV, XUS, or ZSP. They avoid a direct CAD-to-USD conversion, but they still invest in American companies.

First define what ?no US? means

Investors can mean several different things when they say they want no US exposure:

• No US-listed securities
• No US-domiciled companies
• No US-dollar trading or currency conversion
• No meaningful exposure to the US economy

These are not the same goal. A Canadian-listed S&P 500 ETF solves the currency-conversion issue but still owns US companies. A non-US company can also earn a large share of its revenue from American customers. Define the restriction first, then choose the fund.

XEQT and SPY are not the same kind of investment

It is easy to group XEQT and SPY together because both are popular ETFs. They do very different jobs.

SPY tracks the S&P 500. It holds large American companies such as Apple, Microsoft, Amazon, and many others. Buying SPY is a direct decision to invest in the United States.

XEQT is a complete global stock portfolio in one fund. It holds Canadian, American, international, and emerging market stocks. BlackRock manages the allocations and rebalances the portfolio for you.

That convenience is why XEQT is popular. You buy one fund and receive exposure to thousands of companies across the world.

Replacing SPY with a Canadian ETF means changing from American stocks to Canadian stocks.

Replacing XEQT with a Canadian ETF means giving up most of the world.

Those are not equivalent decisions.

Option 1: XIC

XIC tracks the S&P/TSX Capped Composite Index. BlackRock describes it as a way to own the entire Canadian stock market.

As of August 2026, XIC had roughly 219 holdings and a 0.06% management expense ratio. It trades in Canadian dollars on the Toronto Stock Exchange and is eligible for registered accounts.

XIC is a strong default choice because it is broad, inexpensive, and simple. It includes major Canadian banks, energy producers, railways, telecommunications companies, utilities, and other publicly traded businesses.

One important feature is the word “capped.” The index limits the influence of any single company. That prevents one unusually large business from dominating the entire portfolio.

If your goal is to own Canadian companies and nothing else, XIC does the job with one purchase.

Option 2: VCN

VCN tracks the FTSE Canada All Cap Domestic Index. It includes large, medium, and smaller Canadian companies.

Its broad coverage makes it another sensible core Canadian equity fund. Vanguard lists a 0.05% management fee. When comparing funds, use the latest management expense ratio for each ETF so that you are comparing the same total-cost measure.

In practice, VCN and XIC will often behave similarly because their largest positions come from the same Canadian market. Their index rules and smaller holdings differ, but both are broad Canadian stock funds.

Choose VCN if you prefer Vanguard or want its all capitalization approach. Choose XIC if you prefer the S&P/TSX Capped Composite Index. Most long term investors do not need to own both.

Option 3: ZCN

ZCN also tracks the S&P/TSX Capped Composite Index, which puts it in direct competition with XIC.

That means the two funds have nearly the same purpose. Both aim to give you broad exposure to the Canadian equity market at a very low cost.

The decision between XIC and ZCN can come down to personal preference, trading volume, or which fund provider you already use. Owning both does not meaningfully improve diversification because they track the same index.

What about XIU or HXT?

XIU and HXT track the S&P/TSX 60 Index. That index focuses on 60 large Canadian companies.

These funds can be useful, but they are narrower than XIC, VCN, or ZCN. You still get the biggest Canadian banks, energy companies, railways, and other major businesses, but you miss much of the medium and smaller company exposure.

For someone trying to build a complete Canadian stock portfolio, I would generally start with XIC, VCN, or ZCN.

HXT also uses a corporate class structure and swaps to deliver index returns. That can create different tax characteristics and introduces additional complexity. It should not be treated as interchangeable with a conventional fund without understanding how it works.

The biggest risk is not the ETF fee

The fee difference among these broad Canadian ETFs is tiny. The more important decision is whether the single-country and sector concentration of a Canada-only portfolio makes sense for you.

Canada represents a relatively small share of the global stock market. Its public market is also concentrated in a few industries, especially financial services, energy, and materials.

That gives Canadian investors strong exposure to banks, oil and gas producers, mining companies, railways, and pipelines. It gives them much less exposure to sectors such as technology and health care than a global portfolio provides.

This concentration is not automatically bad. Canada has excellent companies. Canadian stocks may also provide eligible dividends that receive favourable tax treatment in a taxable account.

But owning good companies is not the same as being diversified.

If Canadian banks, commodity prices, or the domestic economy struggle, a Canada only portfolio has fewer places to hide. XEQT spreads that risk across many countries, currencies, sectors, and businesses.

A Canadian listed ETF can still own US companies

The exchange where an ETF trades does not tell you what it owns.

XEQT trades in Canadian dollars on the Toronto Stock Exchange. It is managed by the Canadian arm of BlackRock. You can hold it in a TFSA, RRSP, or FHSA.

It still owns American companies.

The same applies to Canadian listed S&P 500 ETFs such as VFV, XUS, and ZSP. Buying them does not require converting your money to US dollars, but the underlying investment exposure is still American.

If your goal is to avoid currency conversion fees, a Canadian listed US equity ETF can solve that problem.

If your goal is to avoid investing in US companies, it cannot.

How to diversify globally without the United States

Some investors do not want US exposure, but they also do not want their entire portfolio tied to Canada.

That requires a custom portfolio.

A simple structure could include:

1. A broad Canadian ETF such as XIC, VCN, or ZCN
2. A developed markets ETF covering Europe, Japan, Australia, and other markets outside North America
3. An emerging markets ETF covering countries such as China, India, Taiwan, and Brazil

For example, BlackRock offers XEF for developed markets outside Canada and the United States, and XEC for emerging markets. Other providers offer similar funds.

An illustrative three-fund portfolio

One deliberately simple example?not a recommendation?would be:

• 20% XIC for Canadian equities
• 60% XEF for developed markets outside North America
• 20% XEC for emerging markets

Those weights are rounded and include a deliberate Canadian home bias. They are not a neutral global market-cap portfolio. Different weights produce different country, sector, currency, and volatility exposures, so review the underlying indexes and rebalance periodically.

This approach gives you international diversification without intentionally allocating money to US companies. It also requires more work than XEQT. You must choose the percentages, rebalance the portfolio, and check the underlying index methodology.

There is another complication. A company can be listed outside the United States while earning substantial revenue from American customers. Avoiding US listed companies is possible. Avoiding all economic exposure to the United States is almost impossible in a connected global economy.

Is avoiding the United States a good investment strategy?

That depends on the reason.

If you want your investments to reflect a personal, political, or ethical decision, accepting lower diversification may be a tradeoff you understand and choose willingly.

If you are avoiding US stocks because they recently became expensive, because of one election, or because you expect Canada to outperform next year, be careful. That is a market forecast, even if it feels like a principle.

Markets can remain expensive for a long time. Political conditions change. The country that performed best recently does not always perform best next.

A good portfolio is not the one that perfectly expresses how you feel about today. It is the one you can hold through many years of changing headlines.

Which Canadian ETF should you choose?

For a portfolio invested only in Canadian companies, I would keep the decision simple:

Choose XIC, VCN, or ZCN.

XIC is an easy default because it is broad and inexpensive. VCN is equally reasonable for investors who prefer Vanguard. ZCN is a close alternative that follows the same benchmark as XIC.

I would not choose among them based on a tiny fee difference or last year’s return. Their performance will be driven primarily by the Canadian companies they own.

The bigger question is whether you want Canada to represent 100% of your equity portfolio.

The bottom line

XIC, VCN, and ZCN are good Canadian stock market ETFs. They can replace US exposure if your goal is to own Canadian companies instead.

They are not direct replacements for XEQT or SPY.

SPY gives you large American companies. XEQT gives you a globally diversified stock portfolio. A broad Canadian ETF gives you Canadian companies, with heavy exposure to financial services, energy, and materials.

If you want zero direct US holdings and maximum simplicity, XIC is a strong one fund option.

If you want zero direct US holdings and better global diversification, combine a Canadian ETF with developed international and emerging market ETFs.

The ETF ticker is the easy part. The real decision is how much diversification you are willing to give up to keep your money out of the United States.

This article is for educational purposes only and is not financial advice. ETF holdings, fees, and allocations can change. Review the latest fund documents before investing.

Sources

1. BlackRock, XIC fund page
2. BlackRock, XEQT fund page
3. Vanguard Canada, VCN product information
4. BMO Global Asset Management, ZCN fund information
5. BlackRock, XEF fund page
6. BlackRock, XEC fund page