Topic: ETFs

Two low-fee ETFs make it easy to diversify beyond Canada

Pennsylvania-based Vanguard Group administers overt $5 trillion U.S. in assets spread across 370 mutual funds and ETFs. Canadians are frequently blocked from buying mutual funds registered in the U.S., and some Canadian funds are available in a limited number of provinces. However, Canadians can buy Vanguard exchange-traded funds listed on stock exchanges.

ETFs can play an important role in portfolio diversification. Vanguard can help supply that diversification with these two low-fee ETFs. The first tracks large cap stocks in the U.S. The second tracks emerging markets, with the majority of its holdings in leading Asian economies.


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VANGUARD GROWTH ETF (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index. It’s a broadly diversified index that consists mainly of big U.S. companies.

The $75.2 billion fund holds Apple, Alphabet, Amazon.com, Facebook, Comcast, Home Depot and Visa. Its other stocks include Philip Morris International, Mastercard and Boeing. Vanguard launched the ETF on January 26, 2004. Its MER is just 0.06%.

The fund’s breakdown by industry is as follows: Technology, 27.5%; Consumer Services, 20.4%; Industrials, 14.2%; Financials, 13.2%; Health Care, 11.2%; Consumer Goods, 8.7%; Oil and Gas, 3.5%; Materials, 1.1%; and Telecom Services, 0.2%.

Recommendation in Canadian Wealth Advisor: Vanguard Growth ETF is a buy.

ETFs: China, Taiwan, India account for close to 60% of stocks in this ETF

VANGUARD FTSE EMERGING MARKETS ETF (New York symbol VWO; buy or sell through brokers) aims to track the Financial Times Stock Exchange (FTSE) Emerging Markets Index. It’s made up of the common stock of companies in developing countries. The ETF was launched on March 4, 2005. Its MER is 0.14%.

The top holdings for Vanguard FTSE Emerging Markets include Tencent Holdings (China: Internet), Taiwan Semiconductor Manufacturing (computer chips), Naspers Ltd. (South Africa: media), China Construction Bank Corp., China Mobile Ltd., Industrial & Commercial Bank of China, Sherbank (Russia: banking), Itau Unibanco Holding (Brazil: banking), Alibaba Group (China: Internet) and Ping An Insurance Group of China.

The breakdown by country for this $93.8 billion fund is as follows: Mainland China, 34.2%; Taiwan, 14.5%; India, 10.6%; Brazil, 8.3%; South Africa, 7.4%; Thailand, 3.9%; Russia, 3.8%; Malaysia, 3.3%; Mexico, 3.2%; Indonesia, 2.2%; Philippines, 1.3%; Chile, 1.3%; Poland, 1.3%; Turkey, 1.1%; and others, 3.6%.

Recommendation in Canadian Wealth Advisor: Vanguard FTSE Emerging Markets ETF is a buy for aggressive investors.

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