This is probably caused by VEQT having the highest exposure to the Canadian market compared to the other two ETFs. You can do it on your own, without an advisor, by managing your own brokerage account. Justin October 13, 2020 at 9:28 pm - Reply @John – You’re very welcome! I also like XEQT holds over 9,000 stocks and the top 10 holdings only make up 14.03% of the fund. I am particularly interested in VEQT vs XEQT. Same discussion as VEQT vs VGRO, but with a tiny bit less home bias and less emerging markets, more USA. In 2011 my wife and I started dividend investing with the dream of living off dividends in our 40’s. It works for TFSAs, RRSPs, RESPs, and many more wealth-building accounts. A lower management fee than VEQT of 0.18%. Pura end tak dekhna bohat he sahi match tha ye wala. I reached out to Ed on Twitter and asked him about his thoughts on doing an all equities approach in RESP. In my opinion, therefore, because the total return swap forms a core part of the structure of the ETF, these fees are not likely to materially decrease in future years. It is possible that Canadians simply don’t like the total return swap set up that Horizons utilitize for these TRI index ETFs. I am not sure why HGRO’s net assets are so much lower. Having said that, this plan isn’t set in stone and we may revisit and alter this strategy in the future. This is why we’re holding VCN/XAW and individual dividend stocks. The fund only invests in American stocks, so it is less diversified than VEQT. This is probably why VEQT has the highest MER out of all three all equity ETFs. Reply. The portfolio targets a long term asset allocation of at least 99% equity securities at the time of any rebalance, and the portfolio will be rebalanced semi-annually in order to seek a consistent level of risk from developed countries around the world. Perhaps HGRO may not be for the faint of hearts? VEQT vs. XGRO . I’d also guess HGRO to have slightly higher returns due to the higher exposures to these technology stocks. However, you can withdraw from the RESP and buy similar investments in an “in trust for” (ITF) account for your child just until the markets recover. If you don’t want any Canadian stocks in your portfolio, consider XAW instead. Depending on what interest rates look like in the next ten years or so, we may decide to allocate a bigger portion of the RESPs to bonds, or even holding in mostly cash the last few years before making withdrawals. With so many equity ETFs to choose from it might be hard to figure out the top ones to own. We picked iShares Core Growth ETF Portfolio (XGRO) which has an 80% equities and 20% bonds mix. What it essentially boils down to here is whether you … VEQT is an all-around all equity ETF that provides the best diversification. We would increase the exposure to 20% once the kids turn 18 years old. Or does it make more sense to hold some bonds in RESPs since a decade is relatively “short” when it comes to investment timelines? It makes sense given the large number of stocks that VEQT holds and all four indices track a large amount of stocks. The five underlying ETFs that HGRO holds are known as Horizons Total Return Index ETFs. Sorry, your blog cannot share posts by email. Using VEQT and XEQT in TFSA and Taxable Accounts. BMO one fund solutions When we hold XGRO for 3 years we’d have 10% bond exposure. Instead, the Horizons TRI ETFs receive the total return of the relevant index by entering into Total Return Swap agreements with one or more counterparties, typically large Canadian financial institutions, which provide the ETFs with the total return of the relevant index. Our new RESP strategy – Holding an all equity ETF. This age tiered approach should help stabilize the portfolio value by reducing exposures to market volatility. If you don’t want any Canadian stocks in your portfolio, consider XAW instead. What I’m saying is, switch because the make-up of VEQT is something you are comfortable with holding for the long term, not because it outperformed XAW in a short period of time. Given how poorly the Energy sector has performed lately, it is slightly worrisome to see VEQT with the highest exposure in the Energy sector. Facebook made it to the top 10 list. I was hoping to get your opinion on holding one of these products (VGRO/VEQT/XGRO/XEQT etc. ) Nicely done on investing in VEQT. HGRO has a very high exposure to tech stocks in the top 10 at 21.06%. A fund of 4 iShares funds with some cash. Withholding tax is already being take care as part of the ETF distribution. A high level comparison between VEQT, XEQT, and HGRO. Since publishing my analysis of all-in-one ETFs in Canada and mentioning that we are going from multi-ETFs to all-in-one ETFs for our kids’ RESPs, we have gone ahead and made isharethe changes. It is reasonably diversified, and provides a middle of the pack return. However, since the fund only holds EFTs that obtain synthetic exposure via total return swap, we can infer that the TER is primarily composed of the swap fee associated with those transactions. HGRO has the lowest MER and has a high concentration on the Tech sector. VEQT is a one-stop shop for the all-equity investor, but it’s not one size fits all. I’m not exactly sure why. Hi, I'm looking to start index investing, and have more or less narrowed down to VFV or VEQT - looking to go 100% equities. XEQT has a slightly higher exposure to tech stocks in the top 10 (8.88%) compared to VEQT’s 8.19%. To gain exposure to certain indices through a total return swap, counterparties may charge the Horizons TRI ETF a swap fee (depending on the underlying asset). I decided to do a mix of XGRO and XBAL so we’d hold around 26% in bonds when the kids are between 10 and 15 years old. I've recently come across XEQT, which has lower MER fees than VEQT (0.18 vs 0.22), and I prefer the allocations (25% Canada in XEQT vs 30% Canada in VEQT). XEQT vs VEQT. Financial Independence Retire Early Canada Interviews, Redefine Financial Independence Retire Early, how to easily outperform investment advisor & robo-advisor, Dan at Canadian Couch Potato, the low trading volume for ETFs shouldn’t be a concern, TFSA Over contribution…What to do. I like XEQT for its higher exposure to the US and international markets and no one particular sector is over-weighted. The Horizons TRI ETFs that utilize total return swaps achieve tax-efficiency primarily by receiving the total return of the underlying index (before fees) – the value of the underlying index constituent distributions get reflected in the ETF’s share price and are not distributed to shareholders. VEQT Market price return -0.74% -1.36% 3.21% — — 7.56% VEQT Net asset value (NAV) return -0.70% -1.22% 3.25% — — 7.62% †The management expense ratio (MER) is the MER as of March 31, 2020, including waivers and absorptions and is expressed as an annualized percentage of the daily average net asset value. Due to the high North American exposure and high exposure in Financial Services and Technology, I was curious to find out about VEQT’s top 10 holdings. A high level comparison between VEQT, XEQT, and HGRO. Meanwhile, HGRO does not technically own … VEQT vs. XEQT . XEQT has a 0.18 MER and VEQT has 0.22. I am in the exact same boat right now and trying to figure out where to invest for my kid’s RESP and was thinking of an all-equity asset allocation etf afer listening to Ed Rempel at the Canadian Financial Summit, so thank you for this analysis! “Diversification is protection against ignorance.” – Warren Buffett. Hi Albert, XEQT didn’t exist when I made my decision to switch to VEQT. The fund only invests in American stocks, so it is less diversified than VEQT. They can do this with a part-time job and a student loan. XEQT also pays a distribution of 1.5% compared to VEQT which does not pay a distribution. Since I can’t find any info on HXDM’s top 10 holdings, it is possible that some international stocks may constitute one of HGRO’s top 10 holdings. Performance charts for Vanguard All-Equity ETF Portfolio (VEQT - Type ETF) including intraday, historical and comparison charts, technical analysis and trend lines. This means that an investor is generally only expected to be taxed on any capital appreciation of their ETF shares if, and when, their shares of the ETF are sold. All three of the all equity ETFs are relatively new. Let’s compare VEQT vs. XEQT vs. HGRO and see which one is most suitable. Much like the comparisons above, there are more similarities than differences when it comes to the all-equity all-in-one options from iShares and Vanguard. Etf to hold an all equity ETF should we pick thing I noted is VEQT ’ take! Veqt is an all-around all equity ETF to hold an all equity ETFs comparison – vs.! I used the sector exposure, VEQT has a large percentage of between.05 % and 3 % fits.. For your kids RESP XGRO ) which has an 80 % equities and %... Chance of a problem is it for you that Horizons utilitize for these TRI index.! Sometimes withdraw less that year sometimes I can overanalyze things Financial independence and joyful life US/International! 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Provide long-term capital growth using a portfolio that is diversified outside of Canada to contradict the point of view HGRO!
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