If you want the broader shortlist before choosing a Canada-only equity ETF, start with best ETFs in Canada.
VCN Overview
| Feature | Details |
|---|---|
| Full name | Vanguard FTSE Canada All Cap Index ETF |
| Ticker | VCN |
| Exchange | TSX |
| MER | 0.05% |
| Inception date | August 2013 |
| Distribution frequency | Quarterly |
| Distribution yield | ~2.8–3.2% |
| Number of holdings | 180+ |
| Index tracked | FTSE Canada All Cap Domestic Index |
| AUM | $6B+ |
| Eligible for TFSA/RRSP | Yes |
Top 10 Holdings
| Holding | Sector | Approximate Weight |
|---|---|---|
| Royal Bank of Canada | Financials | ~7% |
| Toronto-Dominion Bank | Financials | ~6% |
| Shopify | Technology | ~5% |
| Canadian Natural Resources | Energy | ~4% |
| Enbridge | Energy | ~4% |
| Bank of Nova Scotia | Financials | ~3% |
| Canadian Pacific Kansas City | Industrials | ~3% |
| Brookfield Asset Management | Financials | ~3% |
| Bank of Montreal | Financials | ~3% |
| Canadian National Railway | Industrials | ~3% |
Sector Allocation
| Sector | Weight |
|---|---|
| Financials | ~35% |
| Energy | ~17% |
| Industrials | ~12% |
| Materials | ~10% |
| Technology | ~8% |
| Communication Services | ~5% |
| Utilities | ~4% |
| Consumer Staples | ~4% |
| Consumer Discretionary | ~3% |
| Real Estate | ~2% |
Performance History
| Period | VCN Total Return | Annualized |
|---|---|---|
| 1 year | ~18% | 18% |
| 3 years | ~25% | ~8% |
| 5 years | ~50% | ~8.5% |
| 10 years | ~100% | ~7% |
| Since inception (2013) | ~130%+ | ~7.5% |
Returns include reinvested distributions. Past performance does not guarantee future results.
VCN vs Other Canadian Equity ETFs
| ETF | MER | Holdings | Index | Yield | AUM |
|---|---|---|---|---|---|
| VCN | 0.05% | 180+ | FTSE Canada All Cap | ~3.0% | $6B+ |
| XIC | 0.06% | 230+ | S&P/TSX Capped Composite | ~3.0% | $12B+ |
| ZCN | 0.06% | 250+ | S&P/TSX Capped Composite | ~3.0% | $8B+ |
| HXT | 0.03% | 60 | S&P/TSX 60 (total return swap) | ~0% (synthetic) | $3B+ |
| XIU | 0.18% | 60 | S&P/TSX 60 | ~3.0% | $12B+ |
VCN vs XIC: Detailed Comparison
| Feature | VCN | XIC |
|---|---|---|
| MER | 0.05% | 0.06% |
| Holdings | 180+ | 230+ |
| Small-cap exposure | Yes (all-cap) | Yes (composite) |
| Tracking error | Very low | Very low |
| Distribution frequency | Quarterly | Quarterly |
| Yield | ~3.0% | ~3.0% |
| Provider | Vanguard Canada | BlackRock (iShares) |
| AUM | $6B+ | $12B+ |
| Verdict | Slightly cheaper; slightly fewer holdings | More liquid; slightly more diversified |
Both are excellent — choose whichever your brokerage makes easiest to buy.
If you are building the classic Canadian sleeve inside a broader portfolio, pair this decision with best all-in-one ETFs in Canada and asset allocation by age.
Role in a Portfolio
| Portfolio Strategy | VCN Allocation | Paired With |
|---|---|---|
| All-in-one Canadian | 100% | N/A (concentrated) |
| Canadian + international | 25–30% | XEQT/VEQT or XAW (international) |
| Classic 3-fund | 25–30% | XAW (international) + ZAG (bonds) |
| Income-focused | 20% | XDIV/VDY (dividends) + ZAG (bonds) |
| Growth-focused | 20–25% | XAW (international) + QQC (Nasdaq) |
If you are tilting toward income instead of pure market-cap exposure, compare VDY review and XEI review.
VCN pros and cons
Pros:
- Lowest MER of any Canadian equity ETF (0.05%) — cheaper than XIC (0.06%) or ZCN (0.06%)
- Includes small-cap Canadian stocks (unlike XIU which only holds 60 large-cap companies)
- Holds 180+ companies — broader than most alternatives
- High dividend yield (~2.8–3.2%) from Canadian banks and energy companies
- All distributions are eligible Canadian dividends — qualify for the dividend tax credit in non-registered accounts
Cons:
- Canada represents only 3% of global markets — VCN alone is highly concentrated geographically
- Financials + Energy = ~52% of the portfolio — significant sector concentration
- No international diversification
- Canadian market has historically underperformed the US S&P 500
Best for: Investors building a 3-fund Canadian portfolio who want the lowest-cost Canadian equity sleeve alongside XAW (international) and ZAG (bonds). Not ideal as a standalone holding.
Frequently asked questions
Is VCN or XIC better? VCN (0.05% MER) is slightly cheaper than XIC (0.06%) and holds more stocks (~180 vs ~230 via the composite, though XIU only holds 60). For practical purposes, they are nearly identical — choose VCN for the marginal MER advantage if you are at Questrade or IBKR. At Wealthsimple, either works.
Does VCN pay dividends? Yes. VCN pays quarterly distributions, currently yielding approximately 2.8–3.2%. The distributions are primarily eligible Canadian dividends, which benefit from the dividend tax credit when held in a non-registered account.