If there’s one exchange-traded fund (ETF) each Canadian investor ought to take into account holding inside their Tax-Free Financial savings Account (TFSA), it’s the Vanguard S&P 500 Index ETF (TSX:VFV).
It’s easy, low-cost, and has an enviable monitor file. Over the long term, this ETF has turned modest contributions into critical wealth, and I believe it ought to type the core of most Canadian portfolios.
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Why VFV belongs in your TFSA proper now
Right here is the best means to consider VFV. Once you purchase this ETF, you might be shopping for a slice of 500 of the most important firms in America. The fund invests throughout industries, starting from know-how to banking and healthcare.
In 2026, a good portion of its holdings is geared in the direction of firms which can be reshaping how the world works by synthetic intelligence (AI).
NVIDIA is the most important holding within the VFV ETF, accounting for 7.6% of the fund. The opposite key holdings embrace Apple at 6.7%, Alphabet at 5.4%, and Microsoft at 4.9%.
These are the businesses that spend tens of billions of {dollars} on AI infrastructure, software program, and chips. They’re the central gamers within the (AI) race.
NVIDIA is constructing the chips that energy AI knowledge centres worldwide. Alphabet and Microsoft are embedding AI into each product they promote.
Data know-how accounts for 32.9% of the VFV ETF, with communication companies including one other 10.3%. Once you maintain VFV, you might be shopping for a front-row seat to probably the most necessary technological shifts in trendy historical past.
So when folks ask whether or not VFV remains to be related in at this time’s market, the reply is sure. Presumably greater than ever.
A monitor file constructed over greater than a decade
A $10,000 funding in VFV at inception would have grown to $72,890 at this time. If we modify for dividend reinvestments, cumulative returns are nearer to $88,790.
On a year-by-year foundation, the fund returned 12.3% in 2025, 35.24% in 2024, 23.25% in 2023, and 27.64% in 2021.
The tough patch got here in 2022, when rising rates of interest despatched markets tumbling, and VFV fell 12.7%. However traders who held by that interval have been shortly rewarded.
That resilience is a part of what makes this ETF price proudly owning for the lengthy haul.
What makes VFV a sensible TFSA play
Inside a TFSA, the VFV ETF turns into much more highly effective. Each little bit of development, and each quarterly distribution is yours to maintain. Over many years of compounding, that tax shelter provides as much as a significant distinction in your ultimate steadiness.
The price to carry VFV is sort of low. The administration expense ratio is 0.09%, which quantities to $0.90 per $1,000 invested yearly. There isn’t a trailing fee both, per Vanguard Canada’s documentation.
Along with value appreciation, the fund pays quarterly distributions. In 2025, that got here to roughly $1.53 per unit. Again in 2012, when the fund was began, it paid out simply $0.15 per unit. That quiet, regular development in distributions over 13 years tells you one thing concerning the high quality of what sits inside this ETF.
In a nutshell, VFV does the heavy lifting within the background when you get on together with your life.
