
TSE:VFV
This summary was created by AI, based on 6 opinions in the last 12 months.
The Vanguard S&P 500 Index ETF (VFV) has received mixed reviews from experts. Some analysts prefer the unhedged VFV due to its exposure to USD, especially considering the long-term weakness of the CAD. However, they express caution regarding the index’s current high valuations, especially given its significant allocation to tech stocks, which constitutes about 45-50% of the ETF. There are concerns about potential adverse impacts from overvalued mega-IPOs like SpaceX and OpenAI, with expectations of valuation corrections in the near future. Despite these concerns, VFV is still regarded as a favorable long-term investment, particularly for those with a systematic investment approach that capitalizes on market dips. Compared to alternatives like TPU, VFV shows similar performance but may have a slightly higher management expense ratio (MER).
This is pretty simple and straightfoward: it covers the S&P 500. There's no hedging in this. It comes down to how you look at the markets now. Himself, he really likes the S&P 500 as a place to invest in. The wild card are rising trade tensions. He believes there will be a resolution at some point. VFV charges only 8 basis points.
Sell this and Buy the hedged version? He just took off of his Canadian hedges today. The Cdn$ has had a strong run up, and there are built-in expectations by the Bank of Canada that the Cd$ is going to go higher. Thinks Bank of Canada has gotten a little ahead of itself and the inflation and growth forecasts for next year are a little too robust. He wouldn’t be worried about the Cdn$ going up further. If you want to be long the US market, you want to stay with the unhedged version.
S&P 500? There are at least a dozen ways to buy this in Canada. Four of the ETF’s each offer at least 2 of the versions. Also, you can get it currency hedged or unhedged. The vast majority of these ETF’s are very similar to one another. Most of them are very, very cheap. This one is among the lowest cost. A great way to get US Large Cap in an unhedged way.
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.