Both have similar global coverage, but I like XAW little more because it's slightly cheaper 0.22% MER vs 0.27%, and it's slightly more. Currently, this ETF trades at $221. XGROs MER is also low at around 0.2%. If you’ve made it this far, I hope I’ve given you a good sense of which one is right for you. MER: 0.03 3. Also, the S&P Index funds are time tested and always do well over the long horizon of time. There shouldn’t be too much rebalancing required on your existing U.S.-listed ETFs (you could also consider switching ITOT, IEFA and IEMG to something like VT to reduce the complexity further): https://www.canadianportfoliomanagerblog.com/more-alternatives-to-vanguards-asset-allocation-etfs/. Dividends have been increasing over time and that’s a very positive sign for any good ETF in the first place. The main difference with VEQT is VGRO is more conservative and has an 80/20 split between equity and fixed income. Hi Justin, I’m considering dabbling in the ETF markets for my RSP. Also, look at the second screenshot above, the dividends are identical too, with ZSP having a slight edge over VFV by a margin of 0.02%. On the other hand, open-end fund companies require that you send the shareholders regular reports and statements. @Sd: Most investors have a portion of their portfolio invested in bonds or GICs. Other differences: XAW has a MER of 0.20% while VT has a MER of 0.08%. It wasn’t benign neglect – my two-ETF all-equity portfolio really is that simple! For investors using a brokerage firm, trading costs will be lower especially when compared with investors with no brokerage firm. The constant creation and redemption of shares allow the market price of ETFs to stay in line with their underlying securities. Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies (a majority of them are blue-chip companies), The goal of this ETF is to closely track the S&P 500 index’s return, which is considered a gauge of overall U.S. stock returns, It offers high potential for investment growth, share value rises and falls more sharply than that of funds holding bonds, More appropriate for long-term goals where your money’s growth is essential. Feb 15th, 2019 5:24 … Both have similar global coverage, but I like XAW little more because it’s slightly cheaper 0.22% MER vs 0.27%, and it’s slightly more efficient in an RRSP with regards to withholding taxes (a topic for another day). I came to Canada only in 2015 so my TFSA cont cap is at 32.5k so that is already maxed out. Again, this was just a case study on how to pick individual stocks vs. ETFs in the right way. Hey there ! It just strips out the bond component. I'm looking to stick to just one ETF for simplicity, for my TFSA. 11. Looking under the bonnet of Canadian ETFs to examine the underlying index composition and its potential sector and/or stock biases is key to understanding the fundamental drivers of the fund’s performance. Get the latest stock price for Vanguard Growth ETF Portfolio Redeemable transferable units (VGRO), plus the latest news, recent trades, charting, insider activity, and analyst ratings. then I can sell them to, My combined MER is around 0.20% (though I also, There are two main parameters to consider before, This makes perfect sense, as the reason for, Alright then, let’s jump straight to the list of, From the above screenshot, you can clearly notice the kind of. Also, VDY generates a monthly dividend of 4%. As their asset allocation ETFs are extremely popular with investors, they also have plenty of new daily cash flows they can use to rebalance the portfolio more frequently. I don’t think either is universally right or wrong. Since your RRSP value has already passed this theoretical threshold, a lower-cost two-ticket portfolio could be worth the hassle, at least if you’re accounting for it in dollar amounts. Few realize that S&P’s index committee chooses 500 securities to represent the US large-cap space – not necessarily the 500 largest by market cap, which can lead to some omissions of single names. I am considering waiting for my VEQT to profit by about $20 (to cover the cost of buying and selling fees), then sell it all and use the funds to buy 80% of XAW and 20% of VCN. Tons of helpful information on your site to get me going! First of all, over the past year VFV and ZSP, two of the best S&P 500 Index funds have returned 8% each. At RBC DI, when I was there, I could indeed do all online with no contact, but that generated a (reversible) interest charge, where the agent later asked me why I didn’t call them to prevent that charge beforehand. VDY – When you compare VDN with the likes of VCN, VCN has 0.06% MER while VDY is at 0.22% MER. But for now, I wouldn’t bother complicating your portfolio at this level of assets (especially if you’re just getting started with ETFs). Whether you are a risk-taker or a novice investor looking for your first trade, you can find a couple of great options here to start with. Discuss your favourite picks, broker, and trading or investment style. Now, consider these S&P 500 ETFs against Microsoft or Apple stocks, 5 Year Market Returns : (for the long haul and stability). While the price of Gold is ever surging and at an all-time high now, it makes perfect sense to invest your hard-earned cash on some of the best Gold ETFs right? As you can see, Microsoft stock clearly dominates the VFV or ZSP or VCN or XUS or any other S&P 500 Index fund ETFs which are usually considered the best in the market (benchmark). Think of your ETF as a bar of soap – the more you touch it, the smaller it gets. Do you think this a good way to go? The ETFs making up VEQT are: Vanguard US Total Market Index ETF; Vanguard FTSE Canada All Cap Index ETF; Vanguard FTSE Developed All Cap ex … VXC – VXC is an International ETF with a heavy US (50%+) weight. Lack of understanding of the operational mechanics of ETFs by individual investors is always a problem. I have brokerages at RBC, TD, BMO, Scotia, CIBC and Questrade (in order to better serve DIY investors). These are debt securities backed by the credit power of the bank handing it out. Love your articles, THANK YOU for keeping up with this important work! so I can now rely on your podcasts to get me through my gruelling one hour treadmill/bike rides so THANK YOU! As you can see from the above chart, VEA currently trades at $43.57 US per share. @Justin: That completely makes sense. 4. Investing for longer terms is what is recommended by industry experts for better growth and higher returns over time. I’m new to this as I am in my early 20s and always did investing via Robo Advisors. MER: 0.06 Traded volume daily is less than ZSP of course. The .22% MER is higher than a Canadian or US index ETF, but it’s still a fraction of the cost of an international equity mutual fund. Sources: Quotestream, as of July 31, 2019. If we base our decision simply on the number of underlying index holdings that an ETF tracks, Vanguard would beat iShares hands down (7,075 stocks vs. 5,766 stocks). Robb Engen calls these One-Solution ETF solutions “game changers” and in fact his own Desert Island pick was the all-stocks VEQT. What components are in the total cost that make is 0.61% in a TFSA? I was considering switching my US listed ETFs to Cdn listed ones but now I'm having doubts. The settlement date is the day you pay for your purchase and the day you get cash for selling a fund. Look at the above 5-year growth chart of SPY ETF, as you can clearly notice the growth of this ETF has been tremendous and today the stock is trading at $328 USD. Inception Date: June 25, 2018 When trading ETFs, you buy at the ask price and sell at the bid price. Instead, focus on the company investor relations page to drive you for the purchase decisions. Post by minimalist » 08Mar2019 16:50. In addition to the above list of top 7 best Canadian ETFs, I’ve listed down 7 more all-time favourites ETFs preferred by Canadians over and over again. In your case, you would be converting a large amount, so you should be able to get a decent rate. All we are planning to do is compare best in the class ETFs with world-class individual stocks. @Justin B – I’m glad you’ve been digging the CPM blog/podcast! 1) I would use the rebalancing calculator I have posted, and adjust the ITOT, IEFA and IEMG over or underweights by the current FX rate. WHY XAW? On a $200,000 RRSP, this amounts to around $620 of savings each year. Hard-core index investors also tend to exhibit this behavior while in search of the most diversified ETF. Mike Philbrick ☆ Unlock Ratings. Your currency risk is much the same as between XAW and VT. That's a reason why some investors prefer VEQT over XAW (or VXC). In your opinion, could I do a multiple ETF portfolio like your “ridiculous” 100% equity ETF mix or should I stick with VEQT? You would need to sell VEQT, wait for settlement, wire the Canadian funds to IB, convert them to U.S. dollars, wire them back to your brokerage, and purchase VT. A lot can happen in global stock markets during this time period. Description: Replicates performance of the S&P/ TSX Capped Composite Index Chose the above allocation ETFs and haven’t looked back since. How much, you may ask? I recall reading an article that mentioned last year alone, some $26-billion (that’s with a “b” folks) flowed into ETFs. I took a hybrid strategy in that I could avoid the NG by keeping most of my bonds in my RRSP. I spend about 5-10min/month using my rebalance spreadsheet, really not that much work. What I’m saying is, switch because the make-up of VEQT is something you are comfortable with holding for the long term, not because it outperformed XAW in a short period of time. I don’t feel comfortable recommending that any investor take this timing risk, which is why I suggested to Robb that he should consider switching to a brokerage which allows a same day gambit, like RBC Direct Investing (Robb could also ask RBC to reimburse his TD transfer-out fees, or at the very least, provide him with some free trades). VEQT Market price return -0.74% -1.36% 3.21% — — 7.56% VEQT Net asset value (NAV) return -0.70% -1.22% 3.25% — — 7.62% †The management expense ratio (MER) is the MER as of March 31, 2020, including waivers and absorptions and is expressed as an annualized percentage of the daily average net asset value. However, due to the changing the intraday value of the underlying assets, prices of share vary throughout the day. Trading commissions are easy enough to estimate. But, that alone should not be a deal-breaker. But now comes the time when you want to add a significant amount of cash into TFSA and only increase your bonds. AUM: $1.2B. Sagar Sridhar is a personal finance blogger from Canada. I’ll be releasing more blogs/podcasts/videos on these concepts, so stay tuned. I know this is in the reverse order as your example in this post, but it could still suffer the same costs. This is also true of the CPM/CCP portfolios. It doesn’t sound like a lot, but you can probably build a more balanced and diversified portfolio for a lot less than that. Math aside, I would maintain that most DIY investors would be wise to stick like glue to their one-fund solutions, even as their RRSP values continue to grow. @Bob Lin: A 2-ETF (VEQT/ZAG) or 3-ETF (VEQT/ZAG/ZDB) are also decent options, but now you’re back to a portfolio that requires rebalancing (so it’s not much easier to manage than the original CPM or CCP portfolios (VCN/XAW/ZAG). In addition is taking me 5 min/month to rebalance the portfolio (love the calculator Justin) with the new savings. What We Like: A true global ETF, XAW receives top marks for its exposure to US and international markets, including developed and emerging markets. Market Capitalization of Indexed Companies: small, mid, large, Issuer: BMO Asset Asset Management Detailed price information for Vanguard Balanced ETF Portfolio (VBAL-T) from The Globe and Mail including charting and trades. https://www.nytimes.com/2009/04/26/your-money/stocks-and-bonds/26stra.html. An easier approach would be to pick one of VGRO, VBAL, or VCNS. Commodity ETFs and industry ETFs are quite similar in that they target specific areas of the market. Charles Schwab offers another significant lower cost ETF for the family investment. vxc vs xaw. These are developed to grant a pathway to asset markets with the added advantage of creating little or short-term capital profits taxes. Microsoft stock alone has returned almost 5 times of what VFV has, that too in the past 5 years alone. I see that VEQT is heavily weighted in the Canadian market, would you recommend purchasing VFV to have more exposure to the US market or should I just stick with VEQT? I don’t actually need the TFSA, I simply bought it to compare the performance of VEQT vs XAW. The sector and industry ETFs help investors earn exposure to specific markets. The other thing is, Blue Chip companies have a history of excellent returns over long horizons of time with excellent dividends and fewer market fluctuations. What can you suggest with this challenge? Continuously monitored and automatically rebalanced, as needed, in order to maintain asset class target weights 3. On registered accounts you must wait for settlement before applying proceeds to reinvest, as they claim it would represent a short to do so immediately, and that is not allowed on non-margin accounts. What Are Guaranteed Approval Personal Loans? Just transferred out of BMO IVL to consolidate at TD DI. I am currently invested in VGRO in my RRSP and my brokerage is Questrade, since you mentioned if using the Norbert’s Gambit approach by breaking up VEQT (or VGRO in my case) to US listed ETFs, there may be an opportunity cost because of the delay to journal DLR to DLR.U, and you recommended breaking up with TD and an option would be to go with RBC DI since they journal the security the same day. Another thing is that XEQT has 25% into Canadian equities whereas VEQT has 30 here. Actively Managed ETFs are created to beat a market, not following the trend of most ETFs, which are created to trail a market. This will give you an overall idea of the kind of returns you can expect by investing in this fund. While the primary focus of ETFs is on individual investors, institutional investors also play a major role. Expenses being passed on to the brokerage firms that hold the customer’s accounts lower the costs of client services. Show full opinion Hide full opinion. 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