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Topic: ETFs

Two ETFs offer low-fee access to global markets

Pennsylvania-based Vanguard Group administers about $5 trillion U.S. in assets spread across 370 mutual funds and ETFs. 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. They trace U.S. and emerging markets that have resumed their upward momentum after the recent market downturn.


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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 $73.1 billion fund holds Apple, Alphabet, Amazon. com, Facebook, Coca-Cola, Comcast, Home Depot and Visa. Its other stocks include Philip Morris International, AbbVie and McDonald’s. Vanguard launched the ETF on January 26, 2004. Its MER is just 0.06%.

The fund’s breakdown by industry is as follows: Technology, 26.9%; Consumer Services, 20.2%; Financials, 13.2%; Industrials, 12.7%; Health Care, 11.7%; Consumer Goods, 10.1%; Oil and Gas, 3.7%; Materials, 1.3%; and Telecom Services, 0.2%.

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

ETFs: China, Taiwan account for almost half 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, Hon Hai Precision Industry Co. (Taiwan: electronics), Alibaba Group (China: Internet) and Ping An Insurance Group of China.

The breakdown by country for this $91.7 billion fund is as follows: Mainland China, 32.6%; Taiwan, 14.4%; India, 11.8%; South Africa, 7.9%; Brazil, 7.7%; Thailand, 3.8%; Russia, 3.6%; Malaysia, 3.3%; Mexico, 3.3%; Indonesia, 2.4%; Philippines, 1.5%; Chile, 1.4%; Poland, 1.4%; Turkey, 1.2%; and others, 3.7%.

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

For our views on where ETFs can fit in a successful, well-balanced portfolio, read Stock Investment Strategies: ETFs, Diversification, and Compound Interest.

For our recent report on two global ETFs that track mature economies, read Global ETFs hold quality stocks from two strong economies.

Comments

  • I was wondering if there is an advantage at buying an etf with Vanguard Canada rather then Vanguard’s etf trading on the US market

    • Thanks for your question. You could buy either version, Note though, that the Canadian version has a higher MER. TSI Research.

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