Deciding between index funds, Canada

[Craigsigg]

Hello. Me and my wife have recently been getting our finances in order, and are now saving money instead of living paycheck to paycheck. It is very exciting! We have read a few books, with our favorite being the simple path to wealth by JL Collins.

Our question is regarding investing in Index funds in Canada. We are currently set up with questrade, and are going to be buying vanguard index funds (unless advice convinces us otherwise). We are debating between the U.S total market index fund, vs the s&p 500 index fund. They seem to perform similarly, but JL Collins recommends the total stock market index fund. The MER for the total market index fund is 0.16, while the s&p 500 is 0.09. should we just go with the lowest Mer, the s&p 500?

I also read somewhere that the total market index fund has more volatility, but slightly higher reward over the long haul. This is fine for our position (late 20's) investing for the long term. Is it still the better choice even if it has a higher MER?

The international index fund is another option that we can invest in to diversify. It carries an MER of 0.21

Also, Canadian hedged funds or not.. we are confused, it seems to not make a difference either way. Any and all advice is welcomed and appreciated. Thank you 

[gocurrycracker]

The total market fund owns ~3000 stock. The SP500 owns... 500. The extra 2500 stocks are for small and medium businesses, which in theory will grow faster than large cap companies.

As a Canadian, in theory you cannot own US mutual funds. ETFs are fine though. The er on VTI is 0.03%. There is no fee reason to own a different fund.

VXUS is the international fund. It's er is 0.08%.

We own both VTI and VXUS. This post walks through the thought process:
https://www.gocurrycracker.com/us-vs-international-investing/

Canada represents about 2.5% of global equity markets. It would be reasonable for a Canadian to have 2.5% of their investments allocated to Canada.

Currency hedging is a big more challenging to figure out - if you spend 100% of your time in Canada and prefer Canadian sources for food, etc, having all of your assets in CAD isn't so bad. If you spend time outside Canada and favor imports, then maybe some diversification is better.

I would personally choose to not hedge to the canadian dollar - I recommend looking at what some Canadian residents / citizens think about this also. Here is one option: (I didn't read it)
https://www.millennial-revolution.com/invest/workshop-invest/investment-workshop-38-currency-hedging/