Confused between VFV and VOO? Here’s a clear breakdown of their differences. VFV is the Canadian equivalent of the popular Vanguard S&P 500 ETF (VOO), offered by Vanguard U.S., with both VFV and VOO tracking the S&P 500. An important difference between the two is that by investing in VFV, your investment may be subject to a 15% foreign withholding tax on the dividends as VFV is Canadian domiciled, meaning that it trades in CAD despite owning all US holdings.
What are Index Funds?
An index fund is a type of mutual fund or exchange traded fund (ETF) that aims to mirror a particular market. Index funds contain a tiny piece of all the companies included in a particular market index (e.g., S&P 500 or the Dow Jones Industrial Average).
Index funds offer a great vehicle to diversify your holdings, as it spreads out your money across many companies in an index. Instead of placing all your eggs in one basket (one security), you spread them out across multiple baskets.
What is Vanguard?
Vanguard was founded by John Bogle in 1975 and that same year Vanguard launched the first index fund, which tracked the S&P 500. Today, Vanguard is the largest issuer of mutual funds in the world and the second-largest issuer of ETFs as well.
When you purchase VFV, which holds the U.S. ETF VOO, the CAD-USD exchange rate can impact the Canadian ETF’s value, beyond the underlying stocks’ price movement.
Why? Not all ETFs hedge against this currency difference. Hence, if the U.S. dollar strengthens, the ETF gains value, and vice versa. Fluctuations in the Canadian dollar can alter returns over time.
Should I Buy VFV or VOO?
Well, it depends!
If you prefer a lower MER and higher dividend yield, VOO may be the better option, but you will need to bear the currency conversion cost. Or, if you’re familiar with Norbert’s Gambit, you can convert funds without the currency conversion fees (click here to learn about Norbert’s Gambit). As a reminder, you will need to hold VOO in your RRSP to avoid the 15% withholding tax.
If you prefer straightforward and consistent investing, VFV might be the more accessible choice for the majority of investors.
To review the full details of VFV and VOO from Vanguard, click on either one.
An important difference between the two is that by investing in VFV, your investment may be subject to a 15% foreign withholding tax on the dividends as VFV is Canadian domiciled, meaning that it trades in CAD despite owning all US holdings.
VOO - Performance Comparison. In the year-to-date period, VFV.TO achieves a 15.38% return, which is significantly higher than VOO's 11.86% return. Over the past 10 years, VFV.TO has outperformed VOO with an annualized return of 15.18%, while VOO has yielded a comparatively lower 12.88% annualized return.
VOO earns a top rating of Gold, while SPY earns the next best rating of Silver. Almahasneh says the reason is fees. VOO charges 0.03%, while SPY charges 0.09%. With all else equal, the fund with the lower fee is more aligned with investors' best interests.
VFV's current distribution yield, which stands at 1.08% as of April 10th, is net of a 15% foreign withholding tax on dividends from its underlying U.S. stocks.
The primary difference between SPY, VOO, IVV, and SPLG is their cost. SPLG has the lowest cost at 0.02%, followed by VOO and IVV at 0.03%, and SPY at 0.09%. If you are a cost-conscious investor, the VOO, IVV, and SPLG might make a more attractive option compared to SPY with their lower expense ratios.
The S&P 500 ETF comes highly recommended by Warren Buffett, and for good reason. Not only is it safer than many other investments, but it also has a long history of earning positive returns.
VOO has a consensus rating of Moderate Buy which is based on 406 buy ratings, 91 hold ratings and 7 sell ratings. What is VOO's price target? The average price target for VOO is $540.19.
He also put Berkshire's money where his mouth is. The conglomerate's portfolio owns dozens of stocks but also features two ETFs.One is the Vanguard S&P 500 ETF (VOO -0.67%).
VFV has a dividend yield of 1.07% and paid 1.36 CAD per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 22, 2024.
As a Canadian-listed ETF that holds U.S. assets, VFV is subject to a 15% foreign withholding tax on the dividends it distributes. This deduction can significantly impact your overall returns, particularly when compared to what you might have earned had all dividends been fully reinvested without the tax impact.
Should I Buy VFV or VOO? Well, it depends! If you prefer a lower MER and higher dividend yield, VOO may be the better option, but you will need to bear the currency conversion cost.
The Vanguard S&P 500 Index ETF (TSX:VFV) stands out as a favourite among Canadian investors aiming for exposure to U.S. stocks, primarily due to its low expense ratio of 0.09%. Its affordability makes it an attractive option for those seeking to invest in the S&P 500 Index.
At least once a year, funds must pass on any net gains they've realized. As a fund shareholder, you could be on the hook for taxes on gains even if you haven't sold any of your shares.
The Vanguard S&P 500 Index ETF (TSX:VFV) stands out as a favourite among Canadian investors aiming for exposure to U.S. stocks, primarily due to its low expense ratio of 0.09%. Its affordability makes it an attractive option for those seeking to invest in the S&P 500 Index.
The VOO mutual fund equivalent is Vanguard's S&P 500 Index Fund Admiral Shares (VFIAX). The VOO Fidelity equivalent is FXAIX, the Fidelity ® 500 Index Fund. Fidelity does not have a VOO or VFIAX ETF equivalent. The State Street SPDR ETF equivalent for both funds is the SPDR S&P 500 ETF Trust (SPY).
VFV has a dividend yield of 1.07% and paid 1.36 CAD per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 22, 2024.
Or, you could also invest in both, for example, by putting half in VOO and half in VTI. Here's a summary of which one to choose: If you want to own only the biggest and safest stocks, choose VOO. If you want more diversification and exposure to mid-caps and small-caps, choose VTI.
Introduction: My name is Chrissy Homenick, I am a tender, funny, determined, tender, glorious, fancy, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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