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ETFs
By Michael McCullough on May 2, 2023
Estimated reading time: 3 minutes
By Michael McCullough on May 2, 2023
Estimated reading time: 3 minutes
The MoneySense Best ETFs panel reveals what to look at for the best exchange-traded funds for exposure to companies south of the border.
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Photo by Matt Barnard from Pexels.
Best U.S. ETFs for 2023
To view all the data in this chart, use your mouse or two fingers to slide the columns right or left. To download the list to your device, tap or click the preferred format (Excel, CSV or PDF) below.
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- Overview: Best ETFs for Canadian investors
- Best Canadian ETFs
- Best international ETFs
- Best fixed-income ETFs
- Best all-in-one ETFs
- Desert-island ETF picks
- Best ETFs for retirement income
If the Canadian market’s skew towards banks and oil producers gives some investors pause, the U.S. market’s Achilles heel is its weighting to technology. Information technology stocks represent more than a quarter of the cap-weighted S&P 500 index, even after a big drop last year.
That also excludes mega-caps that most of us would consider tech stocks, like Amazon.com Inc., Alphabet Inc. and Tesla, Inc., which are classified in other sectors (consumer discretionary, communication services and health care respectively, believe it or not).
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MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers.Learn more about our advertising and trusted partners.
The best U.S. ETFs available for Canadians
Technology bias did not serve investors well last year, as rising interest rates skimmed the froth off long-duration assets of all kinds, including tech stocks. It sparked some debate among our panellists over the wisdom of diverging from basic cap-weighted funds, which tend to have the lowest fees, in favour of slightly more expensive equal-weighted and factor ETFs, such as low-volatility, value and dividend funds.
“Canadian investors may want to look at an equal-weight S&P 500 fund, which changes the risk/return/exposure profile meaningfully,” suggested panellist Yves Rebetez, who is convenor at ETFinsight Conference and partner at Credo Consulting Inc. His pick for this purpose is the Invesco S&P 500 Equal Weight Index ETF (EQL). The BMO Low Volatility U.S. Equity ETF (ZLU) and iShares Edge MSCI Min Vol USA Index ETF (XMU) likewise attracted votes from our panellists as reasonably priced alternatives to the standard indices with a low beta factor. Low beta stocks tend to be less volatile than the markets as a whole.
Ultimately, though, our panel’s only unanimous picks among U.S. equity funds were low-cost, cap-weighted index ETFs, iShares Core S&P U.S. Total Market Index ETF (XUU) and Vanguard U.S. Total Market Index ETF (VUN). Also highly rated by the panel, Vanguard S&P 500 Index ETF (VFV) offers an unhedged pure play on the S&P 500, the world’s most closely watched index.
Canadians who invest in these funds can be assured they are neither paying too much in fees nor missing out on the proven long-term performance of the benchmark, the hallmarks of passive index investing.
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Read more on investing:
- Tax planning for Canadians who invest in the U.S.
- For Canadians living abroad, is it worth investing in foreign ETFs?
- The best TFSAs in Canada
- The best RRSP investments
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