Topic: ETFs

Vanguard Growth & Vanguard FTSE Emerging Markets ETFs diversify your investments outside Canada

Canadians are blocked from buying mutual funds that are registered solely in the U.S. unless those funds are also registered with provincial securities commissions. Even some Canadian funds are available only in a limited number of provinces.

However, Canadian investors can buy Vanguard exchange-traded funds (ETFs) listed on stock exchanges.

We feature two low-fee mutual fund alternatives we see as buys due to their reliance on global growth.

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VANGUARD GROWTH ETF $166.79 (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 $90.1 billion fund holds Apple, Alphabet,, Facebook, Comcast, Home Depot and Visa. Its other significant stock holdings include Philip Morris International, Mastercard, Adobe, McDonald’s, Union Pacific, Netflix and Boeing. Vanguard launched the ETF on January 26, 2004. Its MER is just 0.04%.

The fund’s breakdown by industry is as follows: Technology, 34.9%; Consumer Services, 20.1%; Industrials, 13.9%; Financials, 12.3%; Health Care, 9.2%; Consumer Goods, 5.3%; Oil and Gas, 2.5%; Materials, 1.5%; Telecom Services, 0.2%.; and Utilities, 0.1%.

ETFs: Get exposure to the most promising emerging markets too

VANGUARD FTSE EMERGING MARKETS ETF $42.83 (New York symbol VWO; buy or sell through brokers) aims to track the Financial Times Stock Exchange (FTSE) Emerging Markets All Cap China A Inclusion Index. It’s made up of the common stock of companies in developing countries. The ETF launched on March 4, 2005. Its MER is 0.12%.

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., Baidu Inc. (China; Internet), Industrial & Commercial Bank of China, China Mobile (China; telecom), Reliance Industries (India; conglomerate), Alibaba Group (China; Internet), Housing Development Finance Corp. (India; finance) and Ping An Insurance Group of China.

The breakdown by country for this $89.1 billion fund is as follows: Mainland China, 35.9%; Taiwan, 13.9%; India, 11.2%; Brazil, 7.9%; South Africa, 6.7%; Russia, 3.8%; Thailand, 3.7%; Mexico, 3.1%; Malaysia, 2.9%; Indonesia, 2.3%; Philippines, 1.4%; Chile, 1.1%; Qatar, 1.1%; United Arab Emirates, 0.9%; and others, 4.1%.

Recommendation in Canadian Wealth Advisor: Vanguard Growth & Vanguard FTSE Emerging Markets ETFs are buys.


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