Opinions Mike Philbrick
Vanguard S&P 500 Index ETFVFV.TOPARTIAL BUYDec 30, 2025
Mike PhilbrickStock price when the opinion was issued
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When you look at returns around the world for the last 100 years, the S&P is the leader by far. It's a winner in the long run.
That said, what's in the rearview mirror is not the future. Given the valuation of markets today, the average return for the S&P 500 over the next 10 years is going to be less than over the last 10. At some point, it's going to have a valuation correction.
From time to time (but can't know when) we get a 5-10% correction, and that's the time to put $$ in markets. So if you have a plan to allocate annually over the next decade, this is a great vehicle. Wait for those dips, and that will increase your total return.
Quite similar holdings. Within a few percentage points, they oscillate as to which one's doing better at any given time. Both are good choices.
VFV is the S&P 500 with S&P Global as the benchmark index.
TPU's tracking index is Solactive. Uses this as a core holding. MER might be slightly lower than VFV.
Remember that you haven't had any volatility with your GICs. It's been a fixed, set rate of return. They only ever went up.
If this is your first foray into the market, pace yourself. Get used to the fact that you're going to have volatility day to day. Have to make sure you won't get scared out of your portfolio during something like the tariff tantrum earlier this year. On the chart, you can see how this ETF had ~20% decline in April because of that, and that was in big, blue-chip US stocks.
Fee on this is 9 bps, very cheap. Very good access to the US market. Consider broadening your diversification. Also have some global and Canadian equities. Also have some bonds. Add gold, and maybe a smidge of bitcoin, to buoy your portfolio during inflationary shocks. See today's Past Top Picks for a good solution from Fidelity, FEQT.
The S&P 500 index, but in Canadian dollars. Not expensive at 9 bps MER. But, as he's pointed out before, the S&P has about 37% bunched up around 10 names (with 8 of those being tech names). So you can think it's extremely diversified, but it's not.
He's not saying not to own it, but you need to know what you're buying compared to what you already own in your portfolio.
Vanguard is a great place to start. Keep in mind that the S&P is broad market-cap exposure, so it's price x outstanding shares, with no connection to value. Rather, it's more a momentum strategy. Leaves you exposed to Magnificent 7 and concentration risk.
Note that it's a 9 bps expense ratio. Keep in mind that the S&P 500 is very tech and communications heavy, 30% tech and 9% communications. That space is not cheap. Risks. Those sectors have been almost the only leaders this year, so he expects some rotation into other sectors. Consider an equal weight ETF instead.
Or other similar ETFs? They're all basically the same thing: the S&P 500, the number one index in the world, holding every famous American stock you can think of. Looking ahead, he expects other country indexes to outpace the S&P 500, including the TSX. But you should still have some exposure to the S&P 500. Go with the equal-weighted S&P 500, rather than the hedged or unhedged ETF. Go with the EQL--it's fine. Don't worry about the CAD, because the Bank of Canada won't allow the CAD to go much above 79 cents.
In the long run, it doesn't matter which to own, because currency fluctuations even out eventually. But short term (which could be many years) a big move can happen and are hard to predict. You could own some of each ETF.