Before you start trading, let’s review some of the potential implementation costs of this strategy, along with tips to help you avoid any huge mistakes. “so there’s no real tracking risk” Sorry Justin, can you explain what you mean by tracking risk? Hi justin, i just wondering how vangiard decides to rebalance this portfolio.. is it simply just by market cap weighting on a global scale? For a more comprehensive portfolio, you can view my simple index ETF portfolios here. ZAG – ZAG is from the BMOs bond component, and is the currently recommended bond index by Canadian Couch Potato. VGRO. 18 Search Popularity. VOO is currently trading at $300 USD with a dividend yield of 1.32% annually. The frequency of your portfolio rebalancing will no doubt differ from Vanguard’s, so expect slight differences in returns going forward. I don’t recommend any of the U.S.-listed asset allocation ETFs, as there are better options for Canadians. I am glad you’ve renamed the updated portfolio “Ridiculous”, because I may be too stupid to manage its complexity. Our full product list view provides financial advisors with performance details and investment information for our complete lineup of low-cost ETFs and mutual funds. Have you recently completed the gambit successfully in a TD Direct Investing RRSP on the same day? In depth view into XAW.TO (iShares Core MSCI ACty Wld exCan ETF) including performance, dividend history, holdings and portfolio stats. 2. This is because I have weighted VUN/VIU/VEE based on their relative market caps (which is also how XAW or VXC weights U.S., international and emerging markets). Sounds good! This also unrealistically assumes no costs to implement and manage your more complex TFSA. I’ve compiled the below list by going through numerous Reddit forums and discussions with active investors and Canadians overtime over preference and selections. TSX SYMBOL: XUU For this comparison we will take a look at the returns between Sep 19, 2019 to Sep 25, 2020 between all three ETFs (Yahoo Finance only has HGRO closing price from Sep 19, 2019). 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. My dad biased me against bonds similarly to Ed’s view so it was nice to hear 3rd party validation I would consider switching if there was a simple enough/cost comparable MSCI world index alternative but I have yet to find one…. I want to pick the lowest fees ETFs, weighted towards the funds with lower MER, one each of the following (all following broad market indexes): If you don’t want bonds then one of XAW/VXC and one of VCN/XIC/ZCN should be good. Makes sense? @Martin: Not sure I follow. Thank you for the quick response! Given the poor expectations for bonds, is it reasonable to move to all equities? For a one fund solution that does it all outside of Canada these are good ETFs to own. Other differences: XAW has a MER of 0.20% while VT has a MER of 0.08%. Simply head over to their Investor’s relation page, click on the latest quarterly report/slides and look at how well diversified their revenue streams are. Any percentage savings from implementing the gambit and buying U.S.-listed foreign equity ETFs on a $20,000 portfolio is going to be modest from a $ perspective (and that’s if everything works out perfectly). 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 … Tesla Vs. NIO: Which Stock Should You Buy? Issuer: Aberdeen Standard Investments. Justin Bender is the author of CPM Blog and a portfolio manager with PWL Capital Inc. in Toronto. My question for you is in relation to the hypothetical performance you have posted for XEQT vs the real annualized performance of XIC and VT. For example the 10 year hypothetical performance of XEQT is 10.61% while for VT it is 8.72% and XIC is 5.9%. Be consistent and periodic in the investments you make and always stick to your decisions for the long haul (5+ years at least). Learn about XAW (XTSE) with our data and independent analysis including price, star rating, asset allocation, capital gains, and dividends. Thanks Justin! Performance charts for Vanguard US Total Market Index ETF (VUN - Type ETF) including intraday, historical and comparison charts, technical analysis and trend lines. If i were inclined to invest more heavily in emerging markets for the upcoming years more heavily, at what point could i expect that vanguard’s asset allocation etfs would mimic the potential of the growth in china for instance? Expense Ratio: 0.17% Retirees seek to earn income from a portfolio without selling often use, 4. This could wipe out the product cost and foreign withholding tax savings for years. 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). 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. Do you have any suggestions, or rough calculations to help choose the better option? Post by minimalist » 08Mar2019 16:50. Assets Under Management: $2.6 billion @Brian: Switching to a one-fund solution (like VBAL) would definitely be easier than managing a 5-ETF portfolio. and VEQT’s available past performance is better than XAW’s by about .3%. rebalance when equities become over or underweight by an absolute 5%), and stick with your plan. I don’t think either is universally right or wrong. All mutual funds and Canadian ETFs have an MER. The last time I tried that at TD in my RRSP I got the same response, it was allowed for non registered accounts but not for RRSPs. 3. Some of my favourite S&P 500 ETFs are – ZSP from BMO, VFV from Vanguard, XUS and IVV from Blackrock, VOO from Vanguard again. First of all, What Do I mean by designing an ETF Portfolio? XEC has a 0.27 MER. Cdn Listed ETFs vs US Listed ETFs. Show full opinion Hide full opinion. 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%. VFV has done very well since inception - is it worth it to go to VEQT (or XAW for that matter) instead for the geographical diversification outside of US? I think TD permits same day Norbert’s Gambit if you phone in and ask a trader to do the journal and sell, no? ZRE instead, which is BMO’s version of XRE. X Athena Widgets or Xaw is a GUI widget library for the X Window System.Developed as part of Project Athena, Xaw was written under the auspices of the MIT X Consortium as a sample widget set built on X Toolkit Intrinsics (Xt); Xt and Xaw are collectively known as the X Toolkit. @Matt: A combination of VEQT/ZDB may be easier for an investor to visualize (i.e. The annual dividends so far have been $1.71 in the recent four quarters. Let me know your thoughts and comments below. Now, that’s just one take. 8 Wellington Street East 3rd Floor Toronto, Ontario M5E 1C5. Do remember to always check out the Investor Relations Page of the company to understand the business and company fundamentals in detail before making that investment. bond ETFs? Invesco QQQ ETF is ranked in the top 1% tracking the NASDAQ-100 index. While they’re very close, VT’s and VEQT’s underlying foreign equity exposures are not identical. While XAW is a bit cheaper than VXC (0.22% MER vs. 0.25% MER), both products provide excellent all-in-one stock solutions outside of Canada; investing in approximately 50% of the U.S. market and the rest in international markets. So comparing Apples to Apples seems like a better position. Normally investing at least 80% of its assets in common stocks included in the Fidelity U.S. Total Investable Market Index, which is a float-adjusted market capitalization-weighted index designed to reflect the performance of the U.S. equity market, including large, mid and small-capitalization stocks. Over the years I have done multiple NG transactions at both brokerages, in both directions, and have never waited for settlement to reapply the exchanged funds. AUM: $1.2B. From what I can see, VEQT is 4 Vanguard funds 100% stocks; 40% US; 30% Canada, the rest international. Your VCN holdings would have gained by around $915, and your DLR holdings would have inched up by around $214, but this still would have left you with an opportunity cost of $3,891. ZAG – ZAG is from the BMOs bond component, and is the currently recommended bond index by Canadian Couch Potato. But, what’s wrong with picking individual stocks such as Microsoft or Apple? buy DLR.U with your U.S. dollars and sell DLR to get Canadian dollars). Would I be best off using only CAD listed ETFs to get started? Top 5 High-Interest Savings Accounts In Canada, 7 Quick Ways To Build An Emergency Fund In Canada (2020), Top 7 Personal Finance Apps You Should Install In Canada (2020). Ideas. Again, quick correction, I am not saying you should have exposure to all the above stock markets. ... XEQT or VEQT – XEQT currently yields a dividend of 3.20% quarterly. @Vito: Let’s say you were converting CAD to USD in your RRSP to buy ITOT/IEFA/IEMG. Also, XIC’s dividend is a bit higher than VCN as well. An agent has told me that I could ask the trader to look at the account after settlement, and monitor the impending interest charge for automatic reversal on a no-touch basis. There are different ways an ETF can get lost from its intended index. @Tommy – My suggested portfolios are available in the Model ETF Portfolios section of the blog (I have never recommended a 100% allocation to a U.S. equity ETF, like VFV): https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/. VEQT vs. XEQT vs. HGRO – Returns Comparison Since three all equity ETFs have different makeups and different inception dates, it’d be interesting to compare their returns. You can find the SCHD ETFs Market Returns in the below screenshot: As you can see from the screenshot above, the overall market returns of the SCHD ETF have been fairly consistent and excellent in fact with double-digit returns since inception. Start free trial for all Keywords. Your thoughts would be greatly appreciated. 0. I am just looking for one I can actually pull off. For example, Apple AirPods revenue alone will be the third-highest revenue-generating in Billions for Apple (wearables), while Microsoft Office 365 is a recurring subscription-based now and with WFH and Teams, Microsoft keeps dominating the market over and again. 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. Commodity ETFs and industry ETFs are quite similar in that they target specific areas of the market. PWL’s Ben Felix likes the broader diversification of VXC. Keep in mind that in that scenario, if you were holding VBAL you sell it all for VGRO it sell all of VGRO for VEQT, and it would do exactly the same thing you’re proposing with the same number of trades. Re: CDN investor question - VXC vs XAW « Reply #11 on: November 27, 2016, 07:43:15 PM » You have to think down the road, what setup will yield the … What components are in the total cost that make is 0.61% in a TFSA? As you also mentioned, a VEQT/ZAG combo may be easier to start transitioning to a more conservative portfolio as retirement approaches (i.e. Is there more risk taking the approach I did? Is there a reason why DLR/ DLR.U is always used for Norbert’s gambit? Apparently the 1929 crash took 25 years to recover and that is an awfully long time even as a young investor, if it were to happen again. @SK: Correct – the total cost of VT in a TFSA would include the Foreign Withholding Tax Ratio (FWTR), as well as the MER. Mike Philbrick ☆ Unlock Ratings. SPY is the best-recognized and oldest ETF and typically tops rankings for the largest AUM and greatest trading volume. Expenses being passed on to the brokerage firms that hold the customer’s accounts lower the costs of client services. I prefer XGRO over VGRO because it has a little more on the US equities which is any day better than Canadian returns. If you sold VEQT and repurchased a two-ETF portfolio (comprised of a Canadian equity ETF and a U.S.-listed global equity ETF), you would only save about 0.04% per year, or just $20 on a $50,000 TFSA ($50,000 × 0.04%). I like DLR/DLR.U because it makes intuitive sense, so I can easily explain it to a DIY investor. It has a 10 yr annualized return of 11.64% with an average MER of 1.48%. This way you know exactly what you are doing with the money you pump in. @Michael: If you’re just getting started with ETFs and have $20,000 to invest, it makes sense to keep it simple with a one-fund solution (like VEQT). They include; Depending on where you trade, the cost of trading an ETF can be more than the savings from management fees. Approaching Resistance for an All Time High 2. War of the Worlds: XAW vs. ACWI. There are some drawbacks when it comes to ETFs. Now, that’s excellent returns over a decades time. Share: 1 reply. Furthermore, there could be instances where your investment in a certain sector is under significant threat that prevent you from diversifying due to taxes or other restrictions. So which answer has inspired you: the easy one or the deeper dive? Read my full VGRO review here. TSX SYMBOL: VCN AUM (in billions CAD): 1.6 VXC has an extremely low MER of 0.27%.In Feb 2015, iShares released the iShares Core MSCI All Country World ex Canada Index ETF (XAW) which mimics VXC closely but at a slightly lower MER of 0.22%. This is because previous measures didn’t take into account deflation, income from dividends and it mostly measured the DJ which is only the top 30 stocks. Alright then, let’s jump straight to the list of Top 7 Canadian ETFs, first on the list is the “Vanguard S&P 500 ETF” or VOO. Thanks, Que. This figure is basically meaningless until we compare it to the benchmark spot rate at the time, which would have yielded about $491 more U.S. dollars (or about $647 CAD). XAW includes emerging markets, a nice diversifier, with EM comprising 50% of the world's GDP. Now, let’s compare each of these ETFs with Microsoft and Apple stock’s which are blue-chip market leaders with extremely well-diversified product line ups. In my opinion, that's not a great loss. What I mean to say is, ETFs are great investments, don’t get me wrong, they are well-diversified, your money is so much more secured and safer with ETFs and you won’t lose as much when the market drops. If you use Norbert’s gambit to convert the USD proceeds from the sale of your U.S.-listed ETFs to CAD in retirement, you don’t “risk a big hit” (not any more so than selling some VEQT shares in retirement). @Michael: For very experienced investors (who don’t mind complexity) with larger RRSP accounts (i.e. vxc vs xaw. I was looking at the share amounts and not the value. 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. @Justin B – I’m glad you’ve been digging the CPM blog/podcast! This will give you an overall idea of the kind of returns you can expect by investing in this fund. If you are looking to invest using Exchange-Traded Funds (ETFs), this post covers some of the best ETFs you can buy and hold in your portfolio in Canada. @Ofir: VEQT is cheaper and more diversified than the Tangerine portfolios. You may buy DLR or DLR.U online, and avoid trader-assisted $43 commission on the first step. Hard-core index investors also tend to exhibit this behavior while in search of the most diversified ETF. CPP Payment Dates – How Much CPP Will You Get? I’ll post an announcement on the CPM blog when it launches with all the details on where to listen in. Although $45/year might not be significant – if you are looking for an investing period of 20-30 years – is adding up. The fund seeks to provide investment results that correspond to the total return of a broad range of U.S. stocks. You can find more details by going to one of the sections under this page such as historical data, charts, technical analysis and others. Because TD DI were very late to the party, I had my RRSPs at RBC and BMO. VAB – Legacy here. VDY is also more stable but VCN should return more over time. @Grant: I tried this recently (while I was writing the post), and various TD reps refused to do so in my RRSP (but they would allow it in a non-registered account). Thanks again for this great explanation as always. 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%. It integrates the advantages of both mutual and exchange-traded funds into one asset. For example, the Invesco Dynamic Pharmaceuticals ETF (PJP). ETFs are offered in most investment categories varying from traditional investments to alternative investments like stocks or currencies. That’s how robust their businesses are. My experience of getting online commissions on both sides in my RRIF at BMO because they don’t allow DLR.U purchase online is not applicable at TD DI. But these were followed by the Vanguard All-Equity ETF Portfolio (VEQT), which uses the same mix of Canadian, US, international and emerging markets stocks as in the all-in-one ETFs. The tax on qualified dividends is between 5 and 15%, while the unqualified dividend is subject to the same tax rate as that of your income. XWD vs. XAW He prefers XAW. Thanks for your help!Its amazing how those fees add up even when its just tenths of a percent. 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