The United States has by far the world’s largest stock market, with many opportunities for investors. Open-end and exchange-traded funds offer an easy way to gain diversified exposure to US markets.
For Canadian investors looking for US stock funds, these seven are the best options, according to Morningstar analysts. ALl are index funds except the C$7.7 billion DFA US Core Equity Fund.
The 7 Best US Equity Funds and ETFs to Buy In 2026
Funds in the US equity category must invest at least 90% of their equity holdings in securities domiciled in the US, and their average market capitalization must be greater than the US small/mid cap threshold, according to the Canadian Investment Funds Standards Committee.
To find the best US equity funds and ETFs to buy, we screened for the lowest-cost primary share classes earning a Morningstar Medalist Rating of Gold with 100% analyst coverage. All the funds and ETFs on the list fall into the US equity Morningstar Category and have at least C$100 million in assets. All data is as of Feb. 4.
- Vanguard S&P 500 Index ETF VFV
- BMO S&P 500 Index ETF ZSP
- Vanguard US Total Market Index ETF
VUN
- DFA US Core Equity Fund
- iShares Core S&P 500 Index ETF XUS
- iShares Core S&P US Total Market Index ETF (CAD-Hedged) XUH
- iShares Core S&P US Total Market Index ETF XUU
Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. Medalist Ratings may differ among the share classes of a fund.
Morningstar expects the highly rated US equity funds on this list to outperform their peers over a full market cycle. But even though all the funds on our list fall into the same category, they may practice different strategies, and therefore behave differently from each other. Investors need to do some homework to understand exactly what a particular fund invests in before buying.
Here’s a look at each of the best US equity funds and ETFs. Be sure to review a fund’s complete report for more details.
Vanguard S&P 500 Index ETF
- Fund Size: C$28.2 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★★
Over the past 12 months, the Vanguard fund rose 9.90%, while the average fund in its category rose 6.56%. The fund, launched in November 2012, has climbed 20.63% over the past three years and 14.94% over the past five.
Vanguard S&P 500 accurately represents the large-cap US stock market, allowing its low fee and efficient portfolio to carve it a long-term edge.
The fund holds a broad, well-diversified portfolio. It typically includes around 500 stocks, and the top 10 represented around 40% of the portfolio at year-end 2025. Still, market-cap weighting can contribute to portfolio concentration when a few stocks dominate the market. This has been the case lately with a handful of mega-cap technology stocks growing to prominence and commanding a greater share of the portfolio.
The US exchange-traded fund share class returned 14.8% annualized over the past 10 years through year-end 2025. It holds little cash, which should help it outperform cash-saddled active peers during market rallies. Likewise, low cash drag could hurt this fund when the stock market declines, but long-term positive returns give this efficient approach a clear edge. Performance across share classes will vary owing to differences in fees and currency exchange rates for non-US investors.
Brendan McCann, associate analyst
Read Morningstar’s full report on the Vanguard S&P 500 Index ETF.
BMO S&P 500 Index ETF
- Fund Size: C$24.8 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★★
The C$24.8 billion fund has gained 9.91% over the past 12 months, while the average fund in its category is up 6.56%. The BMO fund, launched in November 2012, has climbed 20.60% over the past three years and 14.94% over the past five.
BMO S&P 500 accurately represents the large-cap US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge.
The S&P 500 returned 14.7% annualized over the past 10 years through year-end 2025. It holds little cash, which should help it outperform cash-saddled active peers during market rallies. Likewise, low cash drag could hurt this fund when the stock market declines, but long-term positive returns give this efficient approach a clear edge. Performance across share classes will vary owing to differences in fees and currency exchange rates.
Brendan McCann, associate analyst
Read Morningstar’s full report on the BMO S&P 500 Index ETF.
Vanguard US Total Market Index ETF
- Fund Size: C$15 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★
The C$15 billion fund has climbed 9.09% over the past 12 months, outperforming the average fund in its category, which rose 6.56%. The Vanguard fund, launched in August 2013, has climbed 19.62% over the past three years and 13.36% over the past five.
Vanguard US Total Market ETF tracks an index that holds nearly all US stocks using market-cap weighting and charges some of the lowest fees in its peer group.
The fund tracks the CRSP US Total Market Index, which selects all US stocks that pass a screen to ensure they are tradable. It weights them by market cap, which harnesses the market’s collective wisdom on each stock’s relative value. Highly traded markets like the US stock market reflect information quickly and work well for indexing. That’s why US large-blend index funds have outperformed their actively managed peers on average over the long run. Market-cap weighting also generates lower trading costs than most actively managed funds.
The fund replicates the index by holding Vanguard Total Stock Market ETF, its US counterpart tracking the CRSP US Total Market Index.
The fund diversifies its portfolio more than its average peer in the Canada US equity Morningstar Category. It typically holds more than 3,500 stocks, and the top 10 represented 31% of the portfolio as of January 2025, compared with the category average of 38%. Still, the fund can face concentration. The portion of the fund in the top 10 holdings has doubled since 2015.
The portfolio accurately tracks the contours of its average peer. Its value-growth and market-cap orientations closely resemble the category average. The fund’s sector allocations follow its peers’ nicely, with no sector deviating by more than 2 percentage points as of January 2025. Aligning with the pack is a positive sign because it turns the fund’s low fees into a performance edge.
The fund outperformed its average peer by 2.71 percentage points over the trailing 10 years through January 2025. The fund should perform better than its average rival during market rallies, capitalizing on its minuscule cash position. Although the fund ticked down from its all-time highs in 2020 and 2022, so did its peers, and it recovered quickly with better overall performance. Broad diversification and low fees make it a solid option for those seeking tax-efficient exposure to the US stock market.
Brendan McCann, associate analyst
Read Morningstar’s full report on the Vanguard US Total Market Index ETF.
DFA US Core Equity Fund
- Fund Size: C$7.7 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★
The C$7.7 billion fund has gained 10.22% over the past 12 months, while the average fund in its category is up 6.56%. The Dimensional fund, launched in June 2005, has climbed 17.51% over the past three years and 13.90% over the past five.
DFA US Core Equity 1 Portfolios feature exceptional diversification and modest risk factor tilts that should provide a small long-term advantage. Differences in fees account for differences in each share class’ Morningstar Medalist Rating.
The portfolio’s value and small-cap orientations have been persistent, as both have historically exhibited lower price/book ratios and lower average market caps than the Russell 1000 Index. The emphasis on profitable firms is less obvious because cheaper and smaller firms tend to be less profitable than their larger and faster-growing counterparts. But the fund’s profitability tilt is still at work and should help reduce risk, even if the fund’s average profitability is lower than the market’s.
Favoring stocks with lower valuations won’t always help short-term performance. The value orientation of these strategies hurt their index-relative performance over most of the 2010s, and they struggled again over the two years through December 2024. Low expense ratios provide a persistent advantage over other funds in the category. The fees Dimensional charges for these funds are usually cheaper than 90% of their actively managed category peers.
Daniel Sotiroff, senior analyst
Read Morningstar’s full report on the DFA US Core Equity Fund.
iShares Core S&P 500 Index ETF
- Fund Size: C$10.6 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★★
The C$10.6 billion fund has climbed 9.88% over the past 12 months, outperforming the average fund in its category, which rose 6.56%. The iShares fund, launched in April 2013, has climbed 20.74% over the past three years and 14.95% over the past five.
IShares S&P 500 accurately represents the large-cap US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge.
The fund holds a broad, well-diversified portfolio. It typically includes around 500 stocks, and the top 10 represented around 40% of the portfolio at year-end 2025. Still, market-cap weighting can contribute to portfolio concentration when a few stocks dominate the market. This has been the case lately with a handful of mega-cap technology stocks growing to prominence and commanding a greater share of the portfolio.
The US exchange-traded fund returned 14.8% annualized over the past 10 years through year-end 2025. It holds little cash, which should help it outperform cash-saddled active peers during market rallies. Likewise, low cash drag could hurt this fund when the stock market declines, but long-term positive returns give this efficient approach a clear edge. Performance across share classes will vary on account of differences in fees and currency exchange rates for non-US investors.
Brendan McCann, associate analyst
Read Morningstar’s full report on the iShares Core S&P 500 Index ETF.
iShares Core S&P US Total Market Index ETF (CAD-Hedged)
- Fund Size: C$457 million
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★
The C$457 million fund has climbed 11.94% over the past 12 months, outperforming the average fund in its category, which rose 6.56%. The iShares fund, launched in February 2015, has climbed 17.19% over the past three years and 11.22% over the past five.
IShares Core S&P Total US Stock Market ETF offers highly efficient, well-diversified exposure to the US stock market while charging rock-bottom fees—a recipe for success over the long run.
The bedrock of this strategy is market cap weighting, which harnesses the market’s collective wisdom of each stock’s relative value. It’s a sensible approach because the market tends to do a good job pricing large-cap stocks. Large, heavily traded markets tend to reflect new information quickly and are well-suited for indexing.
Market-cap weighting may expose the strategy to stock- or sector-level concentration risk when a few richly valued companies or sectors power most of the market’s gains. At the end of 2024, its top 10 holdings made up the largest portion of the index (32%) in several decades, and its 32% allocation to technology stocks was the highest since the index’s creation in 2006. But this is not a fault in design. The S&P Total Market Index simply reflects the market’s composition. In the long run, its broad diversification, low turnover, and low fee outweigh these risks.
Brendan McCann, associate analyst
Read Morningstar’s full report on the iShares Core S&P US Total Market Index ETF (CAD-Hedged).
iShares Core S&P US Total Market Index ETF
- Fund Size: C$4 billion
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★
The C$4 billion fund has climbed 8.70% over the past 12 months, outperforming the average fund in its category, which rose 6.56%. The iShares fund, launched in February 2015, has climbed 19.75% over the past three years and 13.89% over the past five.
The fund tracks the S&P Total Market Index, which selects all US stocks that pass a screen to ensure they are tradable. It weights them by market capitalization, which harnesses the market’s collective wisdom on each stock’s relative value. Highly traded markets like the US stock market reflect information quickly and work well for indexing. That’s why, large-blend index funds have outperformed their actively managed peers on average over the long run. Market-cap weighting also generates lower trading costs than most actively managed funds.
The fund replicates the index by holding multiple iShares exchange-traded funds and some single stocks. IShares made this decision because its ETFs that track the large-, mid-, and small-cap segments of the index are cheap to trade. The end portfolio still looks nearly identical to the US version of this fund, iShares Core S&P Total US Stock Market ETF.
The fund diversifies its portfolio more than its average peer in the Canada US equity category. It typically holds more than 2,500 stocks, and the top 10 represented 31% of the portfolio as of January 2025, compared with the category average of 38%. Still, the fund can face concentration. Its holding count has declined in recent years, and the concentration in the top 10 stocks has been steadily increasing.
The fund outperformed its peers by 2.89 percentage points annualized from its February 2015 inception through January 2025. The fund should perform better than its average peer during market rallies, capitalizing on its miniscule cash position. Although the fund ticked down from its all-time highs in 2020 and 2022, so did its peers, and it recovered quickly with better overall performance. Broad diversification and low fees make it a solid option for those seeking exposure to the US stock market.
Brendan McCann, associate analyst
Read Morningstar’s full report on the iShares Core S&P US Total Market Index ETF.
