Investing in U.S. Equity ETFs | VUN, VTI, XUU, ITOT
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- Опубликовано: 10 июл 2024
- In this video, Justin compares Vanguard's and iShares' U.S. total stock market ETFs: VUN, VTI, XUU, and ITOT.
The below topics are explained in this U.S. equity ETF tutorial:
00:00 Intro
02:30 Top company holdings in VTI, VUN, ITOT, and XUU
02:47 Historical performance of the CRSP U.S. Total Market Index vs. the S&P Total Market Index
03:13 Difference between “total” stock market indexes and “broad” stock market indexes
03:32 Size breakdown (i.e., large-cap, mid-cap, small-cap, micro-cap) of companies held by of VTI, VUN, ITOT and XUU
04:09 Why Canadian investors should diversify into U.S. stocks
04:32 How VTI, VUN, ITOT, and XUU gain their U.S. stock market exposure
05:34 Annual tracking errors between VUN/VTI and XUU/ITOT
05:58 Worst historical losses for VTI, VUN, ITOT, and XUU
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Had to watch endless videos and not understand the core point, but now I got it when I found your channel! Thank you so much for such amazing explanations
@HaonanGuo-cw2ff - I'm so glad the videos helped! :)
Your videos are high quality and easy to understand! Thanks
Great video thanks!
Thanks Justin.
Great video - thank you!
@Nel Fmo - You're very welcome - thanks for watching! :)
Thanks Justin
These videos are great. Well presented and intelligent.
@hbs - I'm glad you're enjoying them - thanks for watching :)
You have made the beat videos. Simplifying the investing and giving very practical tools. I always thought what is the difference between this and that ETF or should I buy a US ETF because the fee is lower. Also, the diversification is one of my major concern as I have so many different mutual funds, but they all seem to be impacted by the same large companies and have a very similar industry exposure. You have simple and practical answers to all these questions. Thank you so much!! How many ETFs, one should hold? How many mutual funds make sense. I am thinking of simplifying my portfolio.
@Fassel Hussain - Thanks! If you're really looking to simplify your portfolio, you can now purchase a single asset allocation ETF that holds all of the main equity and bond asset classes:
ruclips.net/video/jehooxCWU1k/видео.html
What are your thoughts on investing in taxable accounts? Do you like horizons HXS or HULC? HXS has higher fees due to the swap, ie. mer 0.1 + swap 0.3 = 0.4%, however you get to recoup the withholding tax on dividends. HULC holds the investments directly and does not charge a swap, mer 0.09% but does not recover the withholding tax on dividends. Do you have a preference?
I feel like the personal finance/DIY investing community should take over the use of HODL lol. Unlike silly crypto, it actually make sense to HODL index investments during downturns.
Great and informative video! I'm curious how, or why, one might choose VUN over VTI (or vice versa) if they closely track the same results? Is it simply a matter of preference for a particular exchange to trade upon?
@Omar Abdelwahed - The next video (set to drop this Thursday at 9:00 am) will answer your question in detail, but it mostly comes down to taxes :)
Another great video Justin, how do you feel about REIT's or REIT ETF's
@Vic Fontaine - They are already included in broad market equity ETFs, so there's no need to include a separate allocation to them within a portfolio.
can anyone explain the implication’s of a depreciating canadian dollar against the us dollar on the price of these securities
Thanks for the video. How important are the microcaps in making a US Equity ETF selection? Why not just hold VFV over VUN ?
@Dom R - As discussed in the video, micro cap stocks make up less than 3% of VUN, so they are not expected to have much impact on the fund's performance.
VUN also holds thousands of mid cap and small cap stocks, so it is more diversified than VFV.
5 year return for XUU vs ITOT is 64.64% vs 57.64%. Also, VUN vs VTI is 65.57% vs 58.37%. What is the reason for the tracking divergence if the hold they same assets?
Is there any TSX listed Dow Jones Industrial Average ETF ?
@Mr.Spacely - There is ZDJ, but it hedges away its U.S. currency exposure:
www.bmogam.com/ca-en/advisors/investment-solutions/etf/bmo-dow-jones-industrial-average-hedged-to-cad-index-etf-zdj/
Is ZQQ a good stock to consider as well?
@Tribu Kahu - ZQQ is extremely undiversified - nearly half of the fund invests in technology companies (so no, this should not be a core holding in a diversified portfolio).
Why is the Canadian index not well diversified like the US? Or does it not make much of a difference?
@Tanah Merah - Canadian companies are more concentrated in the financials, energy, and materials sectors than the U.S., leading to less sector diversification overall. The top companies in the Canadian stock market are also more concentrated than those of the U.S., leading to higher single security risk.
thoughts on my DIY etf portfolio of - VFV, XIU, VIU, & VEE being held in TFSA?
@Luca Valeri - Sounds fine, but you could also consider simplifying things by holding an all-equity ETF:
ruclips.net/video/ZlmzFsZoV_o/видео.html
As well, VEE is subject to two layers of foreign withholding tax in a TFSA, whereas XEC is now only subject to one layer:
ruclips.net/video/meW1Pf5uvNM/видео.html
@@JustinBenderCPM The reason for opting to go with separate ETF's vs the all-equity is because I want a higher allocation to the US market, more then 40%. Thanks for pointing out the structure change in regards to XEC. VEE does have a higher yield but does get dinged twice. Based on the updated XEC structure do you believe it has an edge of VEE going forward? Thanks
plus considering i'm already in VIU which will have cross over allocation to south Korea + Poland.
Hello need your help in building my portfolios
@Roger Fed - You've come to the right place! Feel free to check out the channel for more helpful videos :)
Also check out my model ETF portfolios page:
Model ETF Portfolios: www.canadianportfoliomanagerblog.com/model-etf-portfolios/
I switched from individual stocks to etf's during pandemic. Since I am retired and don't need " the excitement" of 40% drops in the markets, I bought ZLB & ZLU which are low volatility etf's in Canada & the States, and have performed well so far. Your thoughts on either or both?
@HamiltonRb - As you know, I prefer low-cost, broad or total market ETFs. Their performance (relative to active strategies, like low volatility ETFs) is incredibly hard to beat over the long-term.
@@JustinBenderCPM I appreciate that but at 71 Im not really shooting for long term, just stability 😂
@@HamiltonRb - 🤣Gotcha - I'd probably have a healthy dose of GICs for stability then.
@@JustinBenderCPM I'm not that conservative to buy a lot of GIC's at todays rate, I just don't want the extremes. As a matter of fact, if you compare ZLU with the S&P 500 ( VFV) over the last 5 years, they end up in the same place without the volatility, same as if you compare ZLB with the XIU, same result. Thanks for responding.
ZLB dropped 28% and ZLU 23% during 2020 market crash.
VUN seems to be holding all the individual securities of the index now rather than VTI. I would suspect that Blackrock Canada may be in the process of switching XUU over to this type of fund structure as well (similar to how they have XEF setup) because the selection individual securities being held feels kind of random...
@Jacob Weber - Vanguard Canada's website is misleading. Although they list the underlying individual U.S. stocks, this exposure comes from VTI (Vanguard Canada is not purchasing individual U.S. stocks in VUN).
@@JustinBenderCPM Interesting that that's not made clear on their website. For one of the pairs of funds were there isn't really a difference between Vanguard/Blackrock I actually chose the Blackrock one because they have a better website!
Great video
I hope I can get enough money to afford the services of PWL Capital
@Nelson Enegbuma - Thanks Nelson! In the meantime, we'll continue releasing online content, so this should help you make good investment choices until you're ready :)
@@JustinBenderCPM What a gentleman.
I've hit the notification bell for the first time today. I don't want to miss a single video of this series. Great content.