Opinions
Daniel Straus
Vanguard FTSE Developed All Cap ex North Amer Idx ETF.
VIU-T
COMMENT
May 08, 2025
Stock price when the opinion was issued
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And how to judge an ETF? He starts with the asset class. Large caps: 60% America and 10% emerging with 3-4% in Canada. Look at the sector and stock exposure of the ETF you're considering. Here, these are ex-North America, an area he is really fond of now, because he expects emphasis to shift outside America in 2021. There's much more emphasis on non-tech sector, which will benefit from the reopening and cyclical recovery. For ETFs, he looks less at PE ratios. He also looks at liquidity. He has a bias in favour of Blackrock, because it's the most liquid ETF provider. (He owns BMO, Vanguard and Horizon, too.) Look at MER. Key is what makes up an ETF.
VIU would be our best choice here. Low fees, unhedged, ex-North America and OK returns, considering international markets have lagged for a long time.
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Combines Europe and Asia, without North America, in a cheap and cheerful ETF framework. In robust markets. Geographic diversification is finally working again, as S&P dominance is fading. Down only 1% YTD, compared to 12% in Canadian dollars for the S&P. A recession could be avoided and we get back to where we were, but this choice lets you be cautious.
These ones are good because they're ex-North America (so no Canada) instead of just ex-US (some Canada). With ex-US, it's inefficient tax-wise for Canadians because you get tax withheld when the dividends cross the border back to Canada.
These two are similar. VIU is larger and more liquid, fees are very low. Popular, as many investors want to sidestep the US-Canada trade conflict.
For investment vehicles that hold equities from international, developed countries, what kind of account to hold them in depends on a whole bunch of things. Consult your tax adviser whether withholding taxes might be foregone if you hold this type of ETF in an RRSP.