The Single Best Equity ETF for Canadians

Discussion of the Stock portion of the Permanent Portfolio

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Smith1776
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The Single Best Equity ETF for Canadians

Post by Smith1776 » Thu Aug 08, 2019 4:26 pm

Earlier this year Vanguard launched a global "all-in-one" equity ETF for Canadians.

Believe it or not, despite all the years Vanguard has been in my domestic market, this is really the first of its kind here.

The fund has a management fee of 22 basis points and holds the following underlying allocations:

39.7% - Vanguard US Total Market Index ETF
30.1% - Vanguard FTSE Canada All Cap Index ETF
22.8% - Vanguard FTSE Developed All Cap ex North America Index ETF
7.4% - Vanguard FTSE Emerging Markets All Cap Index ETF

https://www.vanguardcanada.ca/individua ... /?overview

Several other all equity ETFs over the years have come close to being perfect in our market, but this is the first one that really fits the bill. If you like keeping the equity portion of your PP separate from the other assets, I honestly can't think of a better option.

Every other option previous to this one always had some kind of flaw. It would always be a fund that, say, held only ex-Canada, or had an expense ratio that was too high, or didn't include emerging markets.

I've already put a little bit of new money into this one.
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ochotona
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Re: The Single Best Equity ETF for Canadians

Post by ochotona » Thu Aug 08, 2019 6:47 pm

I strongly believe Canada will someday once more give EM-like returns and US investors should devote a slice to Canada, I prefer ZCAN. It's 5% of my allocation.
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Mike59
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Re: The Single Best Equity ETF for Canadians

Post by Mike59 » Fri Aug 09, 2019 5:53 am

The ETF is an interesting idea but I feel there is too much Canadian exposure for a domestic investor. By CAPE ratio Canada is over 20 and has been more overvalued than Europe and EM for some time, for this reason I have no interest unless the market took a serious haircut. With the US ratio being even higher, one is essentially jumping into the top of the market with most of their equity allocation .

Keep in mind that Canada's index already contains enough resource and energy stocks, could make one too top heavy as the PP is already 25% exposed to gold. My stock portion is divided between emerging markets and EAFE (consider VEE / VE or similar) and this has served me well. I aim for a zero correlation portfolio and found the EM/EAFE strategy perfectly counterbalances the other allocations.

My take on Canada (being a Canadian) is that our country has become overtaxed and penalizes business growth. We may catch up to other markets one day but for the last decade the tone has driven innovation and prosperity out of the country in favor of high taxes and social justice. Gold is your friend and protector against these corrupt knuckleheads...
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