In this post, we will review a popular index ETF on the TSX: the Vanguard S&P500 ETF. We will first explain what’s an index ETF. Then, we will discuss VFV’s historical performance, fees and holdings. Finally, we will compare VFV against similar ETFs.
What’s an index ETF
There are several types of ETFs. Index ETFs are the king of the hill. The first-ever ETF introduced to a North American Exchange was an index ETF. Index ETFs offer exposure to many securities and sometimes to a whole stock exchange at a meager cost. Their main goal is to acquire, on your behalf, all the securities that constitute a specific index to achieve the same return of the tracked index minus the fees.
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Advantage of Index ETFs
One significant advantage of owning an index ETF is low fees. The manager is simply replicating the index’s performance either by acquiring directly or indirectly (using derivatives) the constituents of the index. There is no additional effort involved in the selection process, thus no need to generously compensate the portfolio manager. It might also be pertinent to know that empirical studies have consistently shown that active portfolio managers rarely beat the S&P 500 index in the long term. In other words, only a few managers can outguess the market in the long run.
VFV Investment objective
Vanguard S&P 500 Index ETF seeks to track the performance of a broad U.S. equity index that measures the investment return of large-capitalization U.S. stocks. The S&P 500 Index, or the Standard & Poor’s 500 Index, is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S.
The S&P 500 is an excellent index because most of its constituents are large, established US corporations. Besides, It’s well-diversified across various sectors of the US economy. The S&P 500 is widely regarded as the best gauge of large-cap U.S. equities. It can be easily used to express an opinion on the US economy in general. In other words, if you are bullish on the performance of the American economy in the long term, it’s probably the best index for you.
MER and Asset under management
| Name | MER | AUM | |
| VFV | Vanguard S&P 500 Index | 0.08% | 5,310 |
| XUS | Ishares Core S&P 500 Index | 0.10% | 4,616 |
| ZSP | BMO S&P 500 Index | 0.09% | 10,450 |
VFV has one of the lowest Management Expense Ratio in its category at 0.08%. The difference with other similar ETFs remain really small though.
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Historical performance
Updated daily
Since all three ETFs track the same index and it’s understandable they will have very close performance.
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VFV Stock Profile
Updated daily
VFV Stock 52 weeks high and low
VFV Dividend history
| Type | Ex-div Date | Paym Date | Total Distrib per Unit |
|---|---|---|---|
| Income | 30 Dec 2021 | 10 Jan 2022 | $0.335374 |
| Capital Gains (ETFs) | 30 Dec 2021 | 10 Jan 2022 | $0.014552 |
| Income | 29 Sep 2021 | 08 Oct 2021 | $0.266675 |
| Income | 29 Jun 2021 | 08 Jul 2021 | $0.259310 |
| Income | 26 Mar 2021 | 06 Apr 2021 | $0.269015 |
VFV ETF Holdings
| Holding Name | Weight % |
|---|---|
| Apple Inc. | 6.03 |
| Microsoft Corp. | 5.74 |
| Amazon.com Inc. | 3.88 |
| Facebook Inc. Class A | 2.19 |
| Alphabet Inc. Class A | 2.18 |
| Alphabet Inc. Class C | 2.03 |
| Tesla Inc. | 1.70 |
| NVIDIA Corp. | 1.40 |
| Berkshire Hathaway Inc. Class B | 1.37 |
| JPMorgan Chase & Co. | 1.32 |
VFV Sector allocation
| Sector | Fund |
|---|---|
| Information Technology | 27.6% |
| Health Care | 13.3% |
| Consumer Discretionary | 12.4% |
| Financials | 11.4% |
| Communication Services | 11.3% |
| Industrials | 8.0% |
| Consumer Staples | 5.8% |
| Energy | 2.7% |
| Real Estate | 2.6% |
| Materials | 2.5% |
| Utilities | 2.4% |
| Total | 100.0% |