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Quick verdict: XIC is the slightly cleaner default if you want the larger, older iShares Canadian equity ETF that tracks the S&P/TSX Capped Composite Index. VCN is just as reasonable if you prefer Vanguard or want exposure through the FTSE Canada All Cap Domestic Index. The fee difference is not the decision. Both currently list a 0.06% MER, both hold a broad basket of Canadian stocks, and most investors do not need to own both.
When comparing VCN vs XIC, the honest answer is that these are two of the closest Canadian equity ETFs you can buy. Both are low-cost, Canadian-listed, TSX-traded ETFs designed to give you broad exposure to the Canadian stock market.
The real difference is not cost. It is the index, provider, fund size, and whether you prefer Vanguard or iShares inside your portfolio. If you already own one of them and you are happy with it, there is usually no urgent reason to switch.
VCN vs XIC: side-by-side comparison
| Feature | VCN | XIC |
|---|---|---|
| Full name | Vanguard FTSE Canada All Cap Index ETF | iShares Core S&P/TSX Capped Composite Index ETF |
| Provider | Vanguard | BlackRock iShares |
| Index | FTSE Canada All Cap Domestic Index | S&P/TSX Capped Composite Index |
| Inception date | August 2, 2013 | February 16, 2001 |
| MER | 0.06% | 0.06% |
| Management fee | 0.05% | 0.05% |
| Fund assets | About $14.5B CAD | About $28.8B to $29.3B CAD |
| Number of holdings | 216 stocks | 222 holdings |
| Distribution frequency | Quarterly | Quarterly |
| Best fit | Vanguard investors who want a cheap all-cap Canadian equity ETF | Investors who want the larger, older iShares total Canadian market option |
Source note: VCN data comes from the official Vanguard VCN product page and March 31, 2026 VCN factsheet. XIC data comes from the official iShares XIC product page and April 2026 XIC factsheet. ETF data changes, so verify current figures before investing.
What VCN holds
VCN tracks the FTSE Canada All Cap Domestic Index. Vanguard describes the benchmark as a market-cap-weighted index of large, mid, and small Canadian companies.
In plain English, VCN is a broad Canadian stock market ETF. It owns the familiar big Canadian banks, energy companies, miners, pipelines, insurers, telecoms, utilities, and a handful of growth names like Shopify.
As of Vanguard’s March 31, 2026 factsheet, VCN’s top holdings included:
- Royal Bank of Canada
- Toronto-Dominion Bank
- Shopify
- Enbridge
- Agnico Eagle Mines
- Canadian Natural Resources
The same factsheet showed VCN heavily weighted to financials, basic materials, and energy. That is normal for a Canadian equity ETF. Canada is not a balanced global stock market. It is a smaller market with a lot of banks, resource companies, and rate-sensitive businesses.
What XIC holds
XIC tracks the S&P/TSX Capped Composite Index. BlackRock describes XIC as a low-cost core holding designed to own the Canadian stock market.
Its portfolio looks very similar to VCN because the Canadian market is naturally concentrated. The same giant Canadian companies dominate both indexes.
As of the April 2026 iShares factsheet, XIC’s top holdings included:
- Royal Bank of Canada
- Toronto-Dominion Bank
- Shopify
- Enbridge
- Bank of Montreal
- Canadian Imperial Bank of Commerce
XIC is older and larger than VCN. That does not automatically make it better, but it can matter for investors who care about trading volume, fund scale, and long operating history.
The main differences between VCN and XIC
VCN and XIC are close substitutes, so the differences are modest. Still, they are not literally the same ETF.
1. They track different Canadian indexes
VCN tracks a FTSE Canada all-cap benchmark. XIC tracks the S&P/TSX Capped Composite Index.
Both are market-cap-weighted Canadian equity indexes, so the largest Canadian companies receive the largest weights. The practical result is a lot of overlap. You should expect both ETFs to move in the same general direction most of the time.
The “capped” part of XIC’s benchmark means the index has a rule intended to limit single-stock concentration. In normal market conditions, this may not make much difference if no single Canadian company is near the cap. But it is still part of the index design.
2. XIC is older and larger
XIC launched in 2001. VCN launched in 2013. XIC also had roughly twice the assets of VCN based on recent official fund data.
For a long-term investor using market orders carefully or limit orders, either ETF should be perfectly usable. But if you like the comfort of a larger, older fund, XIC has the edge.
3. VCN has the Vanguard wrapper
This sounds minor, but for some investors it matters. If you already use Vanguard ETFs like VEQT, VGRO, VXC, VFV, or VAB, you may prefer keeping your Canadian equity sleeve with Vanguard too.
That is not a mathematical advantage. It is a portfolio preference. If it helps you stay organized, it is valid.
4. XIC fits naturally with iShares portfolios
If your portfolio is already built around iShares ETFs, XIC may feel cleaner. For example, an investor using XAW for global ex-Canada exposure could pair it with XIC for a simple two-ETF equity portfolio.
For investors who want everything bundled into one ETF, an all-in-one option like XEQT or XGRO may be simpler than holding separate Canadian and global equity funds.
Fees: VCN and XIC are tied
Fees are refreshingly simple here. VCN and XIC both currently list:
- Management fee: 0.05%
- MER: 0.06%
On a $100,000 portfolio, a 0.06% MER works out to about $60 per year before trading costs. That is extremely cheap for a broad Canadian equity ETF.
Because the fees are the same, you should not overthink VCN vs XIC as a cost decision. If you want to compare how MERs compound over time, use the Canadian ETF fee drag calculator.
For broader context, our 2026 Canadian ETF MER snapshot shows how Canadian total-market ETFs like VCN, XIC, and ZCN sit near the low end of the fee range.
Performance: expect them to be very close
VCN and XIC should have very similar performance over long periods because they both own broad Canadian equity exposure at almost identical fees.
There will be small differences from index methodology, rebalancing, tracking error, cash drag, securities lending, and daily portfolio weights. But these are second-order details. The bigger driver is simple: how Canadian stocks perform.
If Canadian banks, energy companies, materials stocks, and the largest TSX names do well, both VCN and XIC should benefit. If the Canadian market lags global equities, both will feel that too.
That is why VCN and XIC are usually better viewed as a Canadian equity sleeve, not a complete portfolio. For a globally diversified portfolio, you would normally pair one of them with U.S., international, and possibly bond exposure. Our best ETFs in Canada guide gives a broader list of building blocks.
Dividends and taxes
Both VCN and XIC pay quarterly distributions. The exact yield changes with market prices and company dividends, but recent official fund data showed yields around the low-2% range.
For Canadian investors, the tax treatment depends on the account:
- TFSA: Distributions and gains are generally tax-free if you follow TFSA rules.
- RRSP: Distributions and gains are sheltered while inside the account, but RRSP withdrawals are taxable later.
- FHSA: Similar idea: tax-sheltered growth, with special withdrawal rules for qualifying home purchases.
- Non-registered account: Canadian dividends may receive dividend tax credit treatment, while capital gains are taxed when realized.
Canada.ca notes that dividends from taxable Canadian corporations may qualify for the federal dividend tax credit. ETF tax slips can still include a mix of income types, so use the tax slips from your brokerage instead of guessing.
VCN vs XIC in a TFSA, RRSP, FHSA, or taxable account
Both ETFs can work in the main accounts Canadian investors use. The choice is less about account type and more about whether Canadian equities fit your overall allocation.
- TFSA: Either VCN or XIC can work for long-term Canadian equity exposure. Keep in mind that a Canada-only ETF is not globally diversified.
- RRSP: Either can fit as the Canadian stock portion of a retirement portfolio. Pair it with global equities and bonds if that matches your plan.
- FHSA: Be careful if you need the money soon. A 100% equity ETF can drop at exactly the wrong time.
- Non-registered account: Canadian equity ETFs can be reasonably tax-efficient, but you still need to track adjusted cost base and use your T-slips.
If you are still deciding which account to prioritize, start with our TFSA vs RRSP comparison.
Who should choose VCN?
VCN is the better fit if:
- You prefer Vanguard ETFs.
- You want a low-cost Canadian all-cap equity ETF.
- You already use Vanguard funds and want the Canadian equity sleeve to match.
- You are comfortable with a slightly smaller fund than XIC.
- You do not need the longest possible track record.
VCN is a perfectly sensible Canadian equity ETF. If you buy it, hold it, and keep the rest of your portfolio diversified, the ticker choice is unlikely to be your biggest investing problem.
Who should choose XIC?
XIC is the better fit if:
- You prefer iShares ETFs.
- You want the larger and older of the two funds.
- You specifically want S&P/TSX Capped Composite exposure.
- You already use iShares funds like XAW, XUU, XEF, XEQT, or XGRO.
- You value a long live track record dating back to 2001.
For most Canadians choosing from scratch, XIC gets a tiny nod because it is larger, older, and just as cheap. But that is a small preference, not a commandment.
Should you hold both VCN and XIC?
Usually, no. Holding both VCN and XIC is mostly duplication.
You would own many of the same Canadian companies in very similar weights. It might feel more diversified because you have two tickers, but the underlying exposure is still Canadian equities.
If you want better diversification, do not split your Canadian equity sleeve between VCN and XIC. Add exposure that is actually different: U.S. equities, international equities, bonds, cash, or an all-in-one ETF that handles the mix for you.
VCN vs XIC vs ZCN
ZCN is BMO’s S&P/TSX Capped Composite Index ETF. It belongs in the same conversation because it also offers broad Canadian equity exposure at a very low MER.
For a simple shortlist, think of it this way:
- VCN: Vanguard, FTSE Canada all-cap index.
- XIC: iShares, S&P/TSX Capped Composite Index.
- ZCN: BMO, S&P/TSX Capped Composite Index.
All three are cheap Canadian equity ETFs. XIC and ZCN are more direct index peers, while VCN uses the FTSE benchmark. If you are picking one today, VCN vs XIC is already enough of a decision. You do not need to turn it into a seven-tab spreadsheet.
Where to buy VCN or XIC in Canada
You can buy VCN or XIC through most Canadian self-directed brokerages. Because these are low-cost ETFs, trading costs and account features matter. Paying high commissions every time you add money can undo part of the benefit of using cheap ETFs in the first place.
If you are buying ETFs regularly, Questrade can make sense for Canadian DIY investors who want broad account support, ETF investing, and CAD/USD flexibility. You can open a Questrade account here. Bonus terms and platform pricing can change, so compare current details before signing up.
For a fuller brokerage breakdown, see our Wealthsimple vs Questrade comparison. If you are new to ETF orders, start with how to buy stocks in Canada.
Final verdict: VCN vs XIC
Choose XIC if you want the larger, older iShares Canadian equity ETF tracking the S&P/TSX Capped Composite Index. It is the slightly easier default for many Canadian investors starting from zero.
Choose VCN if you prefer Vanguard, want FTSE Canada All Cap exposure, or already use Vanguard ETFs elsewhere in your portfolio.
The most important point: do not confuse this with a major portfolio decision. VCN vs XIC is a fine-tuning choice. The bigger questions are how much Canadian equity you should hold, whether you are globally diversified, and whether your overall portfolio matches your risk tolerance.
For most investors, picking either VCN or XIC and sticking with the plan will matter more than trying to identify the perfect Canadian equity ETF.
VCN vs XIC FAQ
Is VCN better than XIC?
VCN is not clearly better than XIC. Both are cheap Canadian equity ETFs with similar holdings. VCN is better if you prefer Vanguard or the FTSE Canada All Cap benchmark. XIC is better if you prefer the larger, older iShares fund.
Is XIC better than VCN?
XIC gets a small edge for many investors because it is larger, older, and tracks the widely followed S&P/TSX Capped Composite Index. But the difference is small. If you already own VCN, switching purely for XIC is usually not necessary.
Do VCN and XIC have the same MER?
Yes. Based on recent official fund data, both VCN and XIC list a 0.06% MER and a 0.05% management fee. Always verify current fees on the provider pages before investing.
Should I hold both VCN and XIC?
Most investors do not need both. VCN and XIC overlap heavily, so holding both usually adds complexity without adding much real diversification.
Is VCN or XIC better for a TFSA?
Either can work in a TFSA if you want Canadian equity exposure and have a long enough time horizon. The bigger question is whether your TFSA should hold only Canadian stocks or a more globally diversified ETF portfolio.
What is the main difference between VCN and XIC?
The main difference is the benchmark. VCN tracks the FTSE Canada All Cap Domestic Index, while XIC tracks the S&P/TSX Capped Composite Index. XIC is also older and larger.
Are VCN and XIC good Canadian equity ETFs?
Yes, both are strong options for broad Canadian equity exposure. They are low-cost, diversified across many Canadian stocks, and suitable as the Canadian stock sleeve inside a larger portfolio.
This is general information, not personalized financial advice. ETF fees, holdings, yields, and tax treatment can change. Check the latest fund documents and consider speaking with a qualified professional for your own situation.
