Best Performing Vanguard ETF in Canada: Top 6 for Investors -

In the competitive landscape of investment opportunities, the best performing Vanguard ETFs have consistently emerged as a top choice for Canadian investors, thanks to their robust performance and cost efficiency. Vanguard, a leader in Exchange-Traded Funds (ETFs), has a range of offerings that have demonstrated impressive track records over the past 5 years. Without diving into the specifics of their financial performance, this discussion will focus on the strategic attributes and market focus of these standout ETFs: VFV, VSP, VUN, VGG, VUS, and VMO, each of which has carved a niche for itself among the best performing Vanguard ETFs available to investors.

Best Performing Vanguard ETFs

Best Performing Vanguard ETF

1. Vanguard S&P 500 Index ETF (VFV)

Net Assets: $10.18 Billion

Inception Date: November 1, 2012

VFV aims to track the performance of the S&P 500 Index, providing exposure to large-cap U.S. stocks. It’s a popular choice for investors seeking to benefit from the growth of major American corporations. The ETF’s focus on the U.S. market, the world’s largest economy, has contributed to its strong performance over the years.

Based on its historical performance, VFV is the best performing vanguard ETF.

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2. S&P 500 Index ETF (CAD-hedged) (VSP)

Net Assets: $2.76 Billion

Inception Date: November 1, 2012

VSP offers a similar exposure to the S&P 500 as VFV but with a key difference: it’s CAD-hedged. This means it aims to mitigate the impact of currency fluctuations between the Canadian dollar and the U.S. dollar on returns. For investors concerned about currency risk, VSP provides a way to invest in U.S. equities while managing currency exposure.

3. Vanguard U.S. Total Market Index ETF (VUN)

Net Assets: $6.87 Billion

Inception Date: August 1, 2013

VUN provides comprehensive coverage of the U.S. equity market, including large, mid, and small-cap stocks. This ETF is designed to track the performance of the CRSP US Total Market Index. Its broad market exposure makes it an attractive option for investors looking for diversified U.S. market participation.

Based on its historical performance, VFV is the third best performing vanguard ETF.

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4. Vanguard U.S. Dividend Appreciation Index ETF (VGG)

Net Assets: $1.22 Billion

Inception Date: August 1, 2013

For those focused on income as well as growth, VGG seeks to track the performance of U.S. companies with a record of growing dividends. It provides exposure to a subset of U.S. equities that are not only large and stable but also committed to returning capital to shareholders through dividends.

5. U.S. Total Market Index ETF (CAD-hedged) (VUS)

Net Assets: $847.05 Million

Inception Date: November 29, 2011

Similar to VUN, VUS offers exposure to the entire U.S. equity market but with a CAD-hedged strategy. This ETF is suitable for investors looking for broad U.S. market exposure without the added variable of USD/CAD currency fluctuations impacting their investment returns.

6. Global Momentum Factor ETF (VMO)

Net Assets: $87.70 Million

Inception Date: June 13, 2016

VMO is somewhat different from the others as it employs a factor-based investing strategy, specifically focusing on the momentum factor. This ETF seeks to capture the performance of global stocks that have shown strong price momentum. It’s a choice for those looking to capitalize on the tendency of winning stocks to continue their upward trajectory.

Investing with a Long-Term Perspective

These Vanguard ETFs, with their varied strategies and market focuses, offer something for every type of investor, from those seeking broad market exposure to those looking for specific strategies like dividend growth or momentum investing. When considering these ETFs for long-term investment, it’s essential to evaluate how they align with your investment goals, risk tolerance, and the overall composition of your portfolio.

Diversification across different sectors, regions, and investment styles is crucial to managing risk and aiming for consistent long-term returns. As always, past performance is not indicative of future results, so thorough research and possibly consultation with a financial advisor are advisable before making investment decisions. With their strong track record over the past 5 years, these Vanguard ETFs merit consideration for inclusion in a diversified investment portfolio.

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Hedged vs Unhedged ETF

To illustrate the differences between a hedged and unhedged ETF, here’s a comparative table that outlines the key features, benefits, and considerations of each approach:

Feature	Hedged ETF	Unhedged ETF
Currency Risk	Currency risk is mitigated through hedging strategies, protecting the ETF from currency fluctuations.	Exposed to currency risk, meaning the ETF’s value can be affected by changes in exchange rates.
Investment Objective	Aims to provide returns of the underlying assets while neutralizing the impact of currency movements.	Aims to provide returns of the underlying assets without actively managing currency exposure.
Performance	Performance is more stable in terms of the investor’s home currency, reducing the impact of currency volatility.	Performance can be more volatile due to currency fluctuations, adding an additional layer of risk or opportunity.
Costs	Typically incurs higher costs due to the expenses associated with currency hedging strategies.	Generally has lower costs as it does not incur the additional expenses of hedging against currency movements.
Ideal For	Investors who want to eliminate currency risk from their international investments.	Investors who are looking to take advantage of potential gains from currency movements in addition to the underlying asset’s returns.
Considerations	While it offers protection against currency risk, it can limit potential gains from favorable currency movements.	Currency movements can significantly impact returns, either positively or negatively, depending on exchange rate fluctuations.