Every Canadian DIY investor has asked the question at least once: am I actually doing better than just buying an S&P 500 ETF? The honest answer requires more than subtracting your starting balance from your ending one — deposits, withdrawals, and timing all distort that number in ways that make outperformers look like laggards and vice versa. WealthWise's VS S&P 500 benchmark feature does the math correctly, showing you a clean you-vs-index line based on your real time-weighted return.
Wealthsimple and most Canadian brokers display a simple return figure: ending value minus deposits, divided by deposits. That sounds reasonable until you realize it treats a $10,000 deposit made on January 2nd exactly the same as one made on December 30th — even though the December deposit had almost no time to grow. If you happened to deposit a large lump sum right before a market dip, your portfolio-level return will look terrible even if your stock picks outperformed the index significantly.
This is the core problem that time-weighted return (TWR) was designed to solve. Instead of letting the size and timing of your cash flows pollute the measurement, TWR isolates each sub-period between deposits or withdrawals and chains the growth rates together. The result tells you how skillfully your money was invested — not how lucky or unlucky you were with the timing of your paycheque.
WealthWise's benchmark tool presents a dual line chart: your portfolio's cumulative time-weighted return on one line, and the S&P 500's total return (in CAD) over the same period on the other. Both lines start at zero on the day your earliest data begins. Everything after that is purely about compounding rate — not dollar amounts.
The visual immediately answers the question most investors actually care about: at any given point in time, was my approach outperforming or underperforming a passive S&P 500 strategy? You can see crossover points — periods where you were ahead, and periods where the index pulled back in front. This is far more instructive than a single end-of-year number.
A subtlety that matters for Canadians: the S&P 500 comparison uses the index's return converted to Canadian dollars. This is critical because many Canadian investors hold their S&P 500 exposure (via VFV, XUS, or similar ETFs) without currency hedging. If the U.S. dollar weakened significantly against the loonie in a given year, a Canadian investor holding unhedged U.S. equities underperformed the raw S&P 500 USD return — and the tool captures that accurately.
Below the chart, WealthWise surfaces three numbers side by side:
A positive difference means you outperformed. A negative difference means the index won. Neither outcome tells you what to do next — but it gives you an honest foundation for that decision.
A few caveats worth understanding before you draw conclusions from your benchmark chart.
Over one or two years, almost any outcome is possible through sheer luck. Canadian dividend investors often underperform in strong bull markets and outperform in downturns. Sequence-of-returns risk means the order of returns matters enormously for investors who are adding or withdrawing regularly. Give yourself at least three to five years of data before drawing firm conclusions.
If you hold a 60/40 balanced portfolio, you should expect to underperform a 100% equity S&P 500 index in a roaring bull market — and outperform in a crash. Comparing a conservative portfolio to a pure equity benchmark is like comparing a marathon runner's pace to a sprinter's. The comparison is still useful (it quantifies the cost of your risk reduction), but it should be interpreted in that context.
If you hold hedged S&P 500 ETFs, the CAD-converted benchmark may not be the right comparison for your specific holdings. WealthWise uses the unhedged CAD return as the standard because it represents the most common Canadian investor experience, but be aware of the distinction.
| Metric | Typical Canadian investor allocation | Canada's share of global market cap |
|---|---|---|
| Canadian equities | 30–40% | ~3% |
The VS S&P 500 chart is most powerful when you use it alongside the rest of WealthWise's analysis suite. If you notice your portfolio consistently lagging the index, your sector breakdown might reveal an overweight in sectors that have underperformed (energy, for example, in certain five-year windows). Your geographic exposure view might show heavy home-country bias — a common Canadian trap where a 30–40% allocation to Canadian equities, which represent about 3% of global market cap, has historically cost investors relative to a globally diversified approach.
Conversely, if you are outperforming, the tool helps you understand whether that edge comes from sector tilts, individual stock selection, or simply the currency effect of a weakening U.S. dollar benefiting your Canadian-dollar returns.
WealthWise is free and designed as a companion to Wealthsimple, Questrade, Disnat, and other Canadian brokers. It does not execute any trades — it reads your positions and transaction history to calculate returns.
There are two ways to get your data in:
The more complete your transaction history, the more accurate the time-weighted return calculation. If you are missing early transactions, the chart will still work but may show a shorter history than your actual investing timeline.
Consider a Canadian investor who built a high-yield dividend portfolio between 2019 and 2024. Their Wealthsimple app shows a 48% total return. The S&P 500 returned roughly 90% in USD over the same period. At first glance, a massive underperformance.
But when WealthWise calculates the time-weighted return in CAD — accounting for the Canadian dollar's appreciation against the USD in parts of that window, the investor's regular monthly dividend reinvestments, and an additional $25,000 deposit made in March 2020 at near-market-bottom prices — the picture becomes more nuanced. The TWR comparison narrows considerably. The investor still trailed the index, but by far less than the naive number suggested.
More importantly, the investor can now see exactly when and why the gap opened or closed, and make a deliberate choice about whether to continue their strategy or shift toward broader index exposure.
Canadian DIY investors face a particularly complex benchmarking environment. We frequently hold a mix of Canadian dividend stocks (in TFSAs and RRSPs for tax efficiency), U.S. equity ETFs, and bond ETFs — each with different currency dynamics, tax treatment, and return profiles. A single benchmark comparison cannot capture all of that complexity.
What the VS S&P 500 tool does is give you a single honest reference point: the most commonly cited passive alternative available to any investor, without the distortions that make naive return comparisons useless. From that honest baseline, you can make better decisions about your strategy, your fees, and your diversification.
WealthWise uses a Modified Dietz method (a form of time-weighted return) that neutralizes the effect of deposits and withdrawals on your measured return. This allows an apples-to-apples comparison with the S&P 500 index, which has no cash flows. Money-weighted return (IRR) is also available in the app but is not used for the benchmark chart.
WealthWise uses the S&P 500 total return converted to Canadian dollars, reflecting the experience of a Canadian investor holding an unhedged S&P 500 ETF like VFV or XUS. This means CAD/USD exchange rate movements affect the benchmark just as they would affect your actual holdings.
Yes, but interpret it carefully. Short-term comparisons (under one year) are highly sensitive to market timing and are mostly noise. For a meaningful signal, aim for at least three years of complete transaction history. You can extend your history by importing older transactions via CSV even after connecting your broker.
Yes. Dividend reinvestments are treated as purchases in your transaction history. When you sync via SnapTrade or import a complete transaction CSV that includes dividend receipts, the TWR calculation incorporates them correctly. The S&P 500 benchmark also uses the total return index (including dividends), so both sides of the comparison treat income the same way.
The current benchmark is the S&P 500 in CAD, which is the most common reference point for Canadian investors evaluating their equity strategy. Additional benchmark options are on the WealthWise product roadmap.
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