MR
  • Insurance
  • Mortgages
  • Debt Management
  • Personal Finance
  • Credit Cards
  • Retirement Planning
  • News
No Result
View All Result
Contact Us
MR
  • Insurance
  • Mortgages
  • Debt Management
  • Personal Finance
  • Credit Cards
  • Retirement Planning
  • News
No Result
View All Result
MR
No Result
View All Result
Home Investing

VFV ETF Review 2022: Vanguard S&P 500 Index ETF

Adeola Adegoke by Adeola Adegoke
November 26, 2022
A A
vfv etf review
587
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

Most financial experts in Canada have confirmed that it is best to be passive investors and allocate funds to Exchange-Traded Funds (ETFs). Most Canadians don’t have the time or expertise to pick individual stocks, so investing in a financial instrument can diversify your risk is best.

If you are looking for a way to diversify your portfolio and maximize your returns, the Vanguard S&P 500 ETF (VFV) might be the right solution for you.

Exchange-traded funds, like VFV ETF, make it easier to diversify your portfolio holdings while saving on management fees. ETFs hold a basket of stocks and give you exposure to many sectors and industries required for diversification.

This VFV ETF review discusses the Vanguard S&P 500 ETF, its pros and cons, holdings, performance, and how it compares to other ETFs in Canada.

What is VFV ETF?

The Vanguard S&P 500 Index ETF, also called VFV ETF, is a US-equity ETF from Vanguard Canada designed to replicate the performance of the Vanguard S&P 500 ETF and track the performance of large-capitalization U.S. stocks.

The VFV ETF was launched on November 2, 2012, and is traded on the Toronto Stock Exchange under the “VFV.TO” ticker symbol. It is currently trading at around $92.14.

This ETF allows Canadian investors to gain exposure to large U.S. stocks, which are complex and inconvenient to purchase single-handedly. However, VFV ETF is an all-equity ETF and doesn’t hold any fixed-income securities. It is riskier than other balanced ETFs and should be held in a diversified portfolio.

Key Facts about VFV ETF ( As of October 26, 2022)

  • Inception date: November 2, 2012
  • Currency traded: CAD
  • Assets under management: $6.472 billion
  • Management fees: 0.08%
  • MER: 0.09%
  • 12-month trailing yield: 1.34%
  • Distribution yield: 1.45%
  • Distribution frequency: Quarterly
  • Exchange: Toronto Stock Exchange
  • Ticker symbol: VFV.TO
  • Eligible accounts: RRSP, TFSA, TFSA, DPSP, RRIF, RDSP

Benefits and Drawbacks of VFT ETF

Like other ETFs in Canada, VFV ETF has its benefits and drawbacks. You should carefully consider the pros and cons of VFV before deciding whether or not VFV is suitable for you.

Pros

  • Passively managed stock portfolio
  • Low management fees
  • Low-cost ETF with an MER of just 0.08%.
  • Broad exposure to top American companies
  • It uses efficient, cost-effective index management techniques.
  • It invests in over 500 U.S. stocks with a median market capitalization value of over $232 billion.

Cons

  • 100% Equity, could be volatile
  • Riskier ETF portfolio
  • No international exposure. The fund invests 100% in the USA.

VFV ETF Returns/Performance

Compared to other ETFs in Canada, VFV ETF is slightly ahead in terms of long-term performance. VFV ETF tracks the benchmark S&P 500 performance very closely and there is very little variance.

However, note that historical performance is not a guarantee that VFV will perform well in future.

Source: www.vanguard.ca

VFV Holdings

Unlike Vanguard’s VGRO and iShares XGRO, which have 80% equity and 20% fixed-income assets, VFV is a pure stock-based fund. It has a diversified portfolio holding about 505 stocks (as of October 26, 2022). The portfolio asset mix is reconstituted and rebalanced quarterly at the discretion of the sub-advisor.

VFVETF offers a nicely diversified range of companies, from banking and finance, to big tech companies, to consumer goods. About 82% of VFV fund’s allocation is geared towards large-capitalization stocks, followed by 12% in medium-capitalization stocks. The balance of about 6% is in medium to large and medium- to small-capitalization U.S. stocks.

The top 10 holdings include familiar names like Apple (technology), Tesla (automobile), Alphabet (media), etc.

Source: www.vanguard.ca

VFV Sector Weighting

One of the greatest benefits you get from VFV is the diversification of the stocks in different sectors of the U.S economy. This diversification helps to reduce your risk level by spreading investments across various industries.

The S&P 500 index ETF diversifies into a wide range of industries, from technology to financial service firms, consumer products, and healthcare providers.

The great thing about the U.S stock market is the diversity of the companies. As you can see from the sector weightings below, you get a nice weighted mix of many different sectors.

Contrast this with the Canadian stock market, which is heavily weighted in only three main sectors: Energy, Real Estate, and Mining, and it’s a large reason why I think that the U.S market is much more dynamic.

Sector

Fund

Information Technology

26.4%

Health Care

15.1%

Consumer Discretionary

11.7%

Financials

11.0%

Communication Services

8.1%

Industrials

7.9%

Consumer Staples

6.9%

Energy

4.6%

Utilities

3.1%

Real Estate

2.8%

Materials

2.5%

Total

100.0%

VFV Fees

VFV ETF offers one of the lowest management fees for a broad, diversified ETF in Canada. Its management fees and MER are:

  • Management fees: 0.08%
  • Management Expense Ratio (MER): 0.09%

Source: www.vanguard.ca

VFV attracts passive investors with its low fees, making it a desirable investment option

Is VFV a Good Investment?

Canadians seeking to diversify their portfolio outside Canada will find VFV ETF a good investment. VFV is a good way for Canadian investors looking to diversify their holdings and gain exposure to some popular blue-chip companies. VFV provides broad exposure to popular US stocks with a medium risk level.

Its 0.08% management fee makes it a desirable investment. You can easily invest in US stocks using Canadian dollars rather than going for ETFs listed on a US exchange and traded in US dollars.

However, VFV can be volatile and decline if the market doesn’t perform well. So, if you are looking for capital growth and income with a lower risk level, VFV ETF is not ideal for you.

VFV ETF provides exposure to large US stocks ranging from IT, healthcare, consumer discretionary, and financial sectors. This amazing ETF entails a medium level of risk and is suitable for Canadian investors who want long-term capital growth and don’t mind stock market volatility.

How to Buy VFV ETF in Canada

VFV ETF isn’t for everyone. However, suppose 

  • You are looking for a low-fee passive investing solution that tracks the U.S large-capitalization stock market, 
  • You fully understand the risks involved with purchasing ETFs with 100% equity fund and are using this ETF in combination with your overall investment strategy, 
  • And also, understand that if you’re using this ETF in combination with other fixed-income funds, you must rebalance your asset mix at set time intervals. 

In that case, you should consider buying VFV ETF.

You can buy VFV ETF through Wealthsimple Trade and Questrade. They are both commission-free brokerage firms in Canada. You can also use any self-directed investment platform available in Canada to buy VFV.

How to Buy VFV using Wealthsimple Trade

Wealthsimple Trade is a Canadian brokerage firm that allows you to trade many stocks and ETFs without paying any commission. It offers a cost-effective way to build your diversified portfolio.

Wealthsimple Trade has no account minimums and offers a straightforward trading process. You must have a Trade account to buy VFV ETF through Wealthsimple Trade. Click here to open an account and get a massive welcome bonus.

If you already have an account, search for VFV using the ticker symbol “VFV” and start trading. Then click on “BUY” and follow the prompts to complete your trade order.

How to Buy VFV using Questrade

Questrade is also a Canadian discount brokerage account that offers novice and experienced Canadian investors a competitive and reliable platform to trade ETFs, bonds, stocks, etc.

Questrade doesn’t charge any commission for buying VFV, but it sets a fee of $4.95 for every VFV you sell. Like Wealthsimple Trade, you need an account before trading on Questrade.

Click here to open your account on Questrade and receive a huge sign-up bonus. Once you have opened and funded your account, you can start trading VFV by searching for the ticker symbol “VFV”.

VFV vs VSP

VSP is the Canadian hedged version of the Vanguard S&P 500 index ETF (VFV). The VSP also tracks the same U.S. stocks, but it hedges the currency exposure to the Canadian dollar.

Suppose the US dollar weakens or strengthens against the Canadian dollar. In that case, VSP protects your portfolio and helps to eliminate any foreign exchange rate effects.

VSP requires a small fee for hedging your position and protecting your portfolio. It has a 0.09% MER.

Check out this VFV vs VSP ETF Review

VFV vs VOO

While VFV is a Canadian Vanguard S&P 500 index ETF traded in Canadian dollars on the Toronto Stock Exchange, VOO ETF is listed on the New York Stock Exchange and traded in US dollars.

VOO ETF also tracks S&P 500, but Vanguard United States offers it. As a Canadian investor, if you choose to invest in VOO using Canadian dollars, you have to source for US dollars or carry out currency conversion on your investment platform.

You will be paying FX fees of up to 2%, and these fees might add up and eat into your portfolio returns.

In contrast, when you purchase VFV ETF, you won’t pay any FX fees because it is listed on the Toronto Stock Exchange, and you can trade them in Canadian dollars.

VFV vs VEQT

The Vanguard All-Equity ETF Portfolio (VEQT) is an ETF from Vanguard Canada that invests all its funds in equity. Unlike VFV, VEQT is diversified with investments in several companies in different countries across the world.

It is globally diversified into the US, Canada, other developed countries, and emerging markets worldwide. While VFV allocated 100% of your funds to US stocks, VEQT gives only about 40% to US stocks and the rest to other countries.

However, VFV ETF is much cheaper in terms of fees than VEQT. VFV has an MER of 0.09% compared to VEQT’s 0.24%.

Check out this VEQT ETF Review

Final Thoughts on VFV ETF Review

Suppose you are looking to invest in the US large capitalization equity securities, seeking long-term capital growth, and can stomach the stock market’s volatility. In that case, you should consider the VFV ETF.

Everyone has their risk tolerance and investment needs. Growth and aggressive portfolios are only for some. You should invest in line with your risk tolerance level.

If you can stomach the risk level of VFV, you should go for it. If you cannot, you can go for alternatives with lower risks, like VEQT.

FAQs on VFV ETF Review

Is VFV good for Canadians?

VFV ETF is an excellent option for Canadian investors looking to diversify their portfolios and gain exposure to prominent companies in the United States.

Is VOO better than VFV?

While VFV trades in Canadian Dollars, VOO trades in US Dollars. So, Canadian investors will save more on currency conversion fees when they invest in VFV instead of VOO.

Is VFV hedged?

VFV is not hedged. However, if you are interested in purchasing the currency-hedged Vanguard S&P 500 Index ETF, you should go for the VSP, which is CAD-hedged.

Author Profile
Adeola Adegoke
Co-founder/CEO at The SEO Hive Digital Solutions | Website

Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.

Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.

The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.

Related Posts
  • Adeola Adegoke
    https://www.moneyreverie.com/author/adeola-adegoke/
    How To Register and Open A CRA My Account in 2023
  • Adeola Adegoke
    https://www.moneyreverie.com/author/adeola-adegoke/
    Property Taxes in Canada: Everything You Need To Know (2023)
  • Adeola Adegoke
    https://www.moneyreverie.com/author/adeola-adegoke/
    A Simple Guide To Sales Tax Canada 2023
  • Adeola Adegoke
    https://www.moneyreverie.com/author/adeola-adegoke/
    FHSA Canada: An Overview of Tax-Free First Home Savings Account 2023
Previous Post

What Is An OTB Notice From Canada Revenue Agency? (2023)

Next Post

VFV Vs VSP 2022: Should I Hedge My Investment?

Related Stories

zsp etf review
Investing

ZSP ETF Review

by Adeola Adegoke
November 26, 2022
0

If you want to gain exposure to the US stock market without spending time deciding and picking stocks, then you should consider this BMO ETF. BMO S&P 500 Index ETF...

Read more

XUS ETF Review

6 Best S&P 500 ETFs in Canada 2022: Invest in the U.S. today

VFV Vs VSP 2022: Should I Hedge My Investment?

11 Best Clean Energy ETFs in Canada

Next Post
vfv vs vsp

VFV Vs VSP 2022: Should I Hedge My Investment?

best s&p 500 etfs in canada

6 Best S&P 500 ETFs in Canada 2022: Invest in the U.S. today

xus etf review

XUS ETF Review

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Recommended

OAS payment dates

OAS Payment Dates: How Much OAS Will You Get in 2023?

January 24, 2023
what does life insurance cover

What Does Life Insurance Cover And Does Not Cover? (2022)

December 6, 2022
Home Equity Line of Credit Canada New Rules

Home Equity Line of Credit Canada New Rules For 2022

January 21, 2022
Coinbase Review

Coinbase Review: Overview, Pros, Cons, Safety, Sign Up & Bonuses

November 25, 2022

Popular Story

  • Websites Where Men Give You Money

    12 Legit Websites Where Men Give You Money in 2022

    9735 shares
    Share 3894 Tweet 2434
  • 20 Best Performing Mutual Funds in Canada for 2022 [Updated]

    5528 shares
    Share 2211 Tweet 1382
  • 12 Top Safe Investments With High Returns in Canada for 2022

    4259 shares
    Share 1704 Tweet 1065
  • Best RESP Canada: 10 High-Performing RESP Providers of 2022

    3440 shares
    Share 1376 Tweet 860
  • What Is Canada PRO Deposit and How Do You Apply in 2023?

    2808 shares
    Share 1123 Tweet 702
  • Is World Financial Group (WFG) a Scam? An Unbiased Review 2022

    2572 shares
    Share 1029 Tweet 643
  • E-Transfer Payday Loans Canada 24/7

    2303 shares
    Share 921 Tweet 576
  • GST Payment Dates for 2023: Eligibility & How to Apply

    2249 shares
    Share 900 Tweet 562
  • 10 Best Investment in Canada for 2022: ETF’s, Stocks, Real Estate & More

    2100 shares
    Share 840 Tweet 525
  • How Much Does it Cost to Have a Baby & Raise a Child in Canada?

    2080 shares
    Share 832 Tweet 520
Facebook Twitter Instagram

Money Reverie

Adeola Adegoke

Owner/Founder

Money Reverie is a top personal finance and finance blog in Canada. We share finance tips & self-help to live a rewarding life.

Categories

  • Benefits
  • Business
  • Credit Cards
  • Cryptocurrency
  • Debt Management
  • Insurance
  • Investing
  • Mortgages
  • News
  • Personal Finance
  • Product Reviews
  • Retirement & Estate Planning
  • Reviews
  • Tax
  • Uncategorized

© 2021 Money Reverie

No Result
View All Result
  • Contacts
  • Contributors
  • Disclaimer
  • Newsletter
  • Personal Finance & Debt Management Blog in Canada – Money Reverie
  • Privacy Policy
  • Super Visa Insurance Quote
  • Terms and Conditions

© 2021 Money Reverie

Need Help With Anything Finance?

Enter your email address to get valuable personal finance & small business tips from top experts delivered to your inbox weekly.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.