Topic: ETFs

Two Vanguard ETFs provide low-cost way to diversify beyond Canada

Vanguard Growth ETF

Today, we look at exchange-traded funds (ETFs) as a way of diversifying beyond Canada. Diversification is essential to any sound investment portfolio, but it has particular appeal at a time when the Canadian economy is slow and the TSX is volatile. Below we profile two Vanguard ETFs that give investors a low-fee way to diversify.

For our most recent article on leading Canadian ETFs, read Most of Canada’s best stocks are in these two ETFs. For our view on the most effective way to profit with ETFs, read: When you invest in ETFs, keep it simple.

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers almost $3 trillion U.S. in 170 mutual funds.

Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces.

Canadians can, however, buy Vanguard exchange traded funds (ETFs) that trade on stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys.

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, a broadly diversified index that mainly consists of large U.S. companies. The fund’s MER is just 0.09%.

The $48.1-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Facebook, Oracle, Home Depot, Comcast,, Gilead Sciences and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology, 23.9%; Consumer Services, 21.8%; Health Care, 14.6%; Financials, 12.1%; Industrials, 11.5%; Consumer Goods, 9.3%; Oil and Gas, 5.0%; Materials, 1.4%; and Telecom Services, 0.3%.

Recommendation in Canadian Wealth Advisor: BUY 

Smart conservative investing at a time of uncertainty

Pat McKeough’s approach to smart conservative investing gives you two big advantages. Your investments are safer when the market is down—and you’re in a stronger position to profit when the markets move up.

Pat’s safety-first philosophy is simple and always effective. It is built on the investments conservative investors need to succeed—established dividend-paying stocks, the most reliable exchange-traded funds (ETFs) and Canada’s best Real Estate Investment Trusts (REITs). You can achieve surprisingly powerful results through income and capital gains. And you never need to take big risks.

The upcoming issue of Canadian Wealth Advisor will feature our portfolio of recommended ETFs. If you’re looking for secure ETFs to invest in, you won’t want to miss it

Learn more  >>

Vanguard ETFs: China, Taiwan, India top $65-billion portfolio in Emerging Markets 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 Index, which is made up of common stocks of companies in developing countries. The fund’s MER is just 0.15%.

The Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), Tencent Holdings (China: Internet), China Mobile, China Construction Bank, Naspers Ltd. (South Africa: media), Industrial & Commercial Bank of China, Bank of China, Hon Hai Precision Industry (Taiwan: electronics), Petroleo Brasileiro (Brazil: oil and gas) and Ping An Insurance Group of China.

The $65.4-billion fund’s breakdown by country is as follows: China, 28.4%; Taiwan, 14.2%; India, 11.6%; South Africa, 9.3%; Brazil, 8.8%; Mexico, 5.1%; Russia, 4.4%; Malaysia, 4.1%; Thailand, 2.6%; Indonesia, 2.4%; Philippines, 1.8%; Poland, 1.7%; Turkey, 1.7%; and others, 3.9%.

Recommendation in Canadian Wealth Advisor: BUY for aggressive investors


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