Comparing VFV ETF vs ZSP, VOO, SPY, VUN, XUU, XUS and More
Published October 7, 2021.
What is VFV?
Vanguard’s VFV ETF is a reliable and successful index fund that has proven to be quite profitable ever since its inception. Its success is mainly attributed to its approach, as it follows the S&P 500.
Likewise, Vanguard S&P 500 ETF aims to follow the performance of a broad US equity index that measures the investment return of large-capitalization US equities. This Vanguard ETF currently aims to follow the S&P 500 Index, and become its successor. Putting it simply, VFV is a Canadian version of the S&P 500 and has shown similar success.
What Type of ETF is VFV?
VFV is Vanguard's Canadian counterpart of the famous S&P 500 ETF. Its stock is traded in Canadian dollars and is listed on the New York Stock Exchange. Furthermore, VFV is a type of ETF that, to a great degree, follows the performance of the S&P 500 Index before any costs and fees come into the picture. The VFV MER (Management Fee) is also quite low, sitting at 0.08%.
What Holdings Are in VFV?
As an ETF, VFV has allotted its capital to major companies, including big tech firms, banking organizations, and even consumer goods.
Some major holdings included in VFV are:
- Apple Inc,
- Microsoft Corp,
- Amazon Inc,
- Tesla Inc,
- NVIDIA Corp,
- Berkshire Hathaway,
- Chase & Co
When it was initially introduced in 1976, the Vanguard S&P 500 Index Fund was the first index-tracking mutual fund. The fund, often represented by the VFV stock, owns the same stocks as the S&P 500 stock index in the same proportions. In fact, the stock companies in VFV account for 75% of the stock market's value in the US, making the index closely reflect the direction the US is headed in.
Does VFV Pay Dividends?
Yes, VFV pays dividends.
Although they're generally paid out once every 12 months, these can be:
- Yearly distributions
The dividend, which generally includes interest, income, and/or capital gains, is given to investors who hold the fund on the date of the payouts. However, keep in mind that the VFV stock yield is rather low, accounting for around 1%.
How to Purchase a Vanguard S&P 500 Index Fund?
To invest in any of the VFV options, you must follow the steps we've explained below:
- Create an account on the website.
- Choose an account. i.e. individual, joint, or retirement
- Fill out some basic info i.e. personal and financial
- Deposit money into your account: To finally invest in the index fund, consider making an online deposit to your account or send a check by mail.
Minimum Deposit: Keep in mind that the Vanguard S&P 500 Mutual Fund has a $3000 minimum deposit, or $2000 if you buy it in an educational savings account.
Automatic Purchases and Reinvestments: By connecting your bank account on your initial deposit, you can set up future automatic purchases and allowing you to invest with a click of a button. When investing in Vanguard, you should know that dividends and capital gains will often be automatically reinvested in the stock.
Purchase Assets Using a CFD Broker: In addition to buying it directly from the Vanguard website, you can purchase S&P 500 assets by using a CFD broker like Fortrade. Although you won't have holdings in the company directly, you would still experience the same benefits, like a rise in profit and a dividend yield.
Does VFV Have Fees?
When it comes to ETF fees, Vanguard has traditionally been one of the lowest-cost ones. However, since financial services is a relatively competitive sector, Vanguard is now being challenged by corporations like Schwab for the crown of low-cost ETFs.
Nevertheless, the charges are minimum:
The Vanguard S&P 500 Mutual Fund: Has an expense ratio of only 0.14%
ETF: The charges just 0.04 percent annually,
Plus any applicable fees to purchase or sell, which are also minimal.
Is VFV A Good Long-Term Investment?
Yes, it can be concluded that the Vanguard VFV is a great choice if you want to diversify your stock portfolio, especially if you’re an investor looking forward to long-term gains. In fact, VFV has had a consistent rise in its price of at least 10% annually since its inception, making it a great choice for long-term investments. According to Reddit and Quora, VFV will probably continue its upward trend in the following years, as it has remained a reliable ETF throughout time.
VFV vs ZSP Index Fund
As they're similar index funds, both VFV and ZSP are tracking the US S&P 500 ETF, so they have had identical gains and losses over the years. Still, there are some minor differences. When comparing the prices of the individual stocks, VFV is approximately $100 per stock, whereas ZSP is cheaper, being around $60 per stock as of October 2021. Still, most evidence shows that VFV historically outperforms the ZSP, making it a better choice, even though ZSP is cheaper.
VFV vs VOO Index Fund
Similar to the ZSP and VFV, VOO attempts to mimic the success of the S&P 500 by investing in the same stock holdings. The only difference is that VOO is traded in US Dollars, and VFV is Canadian.
Thus, investors from Canada should avoid purchasing VOO if they want to minimize their conversion fees (Canadian dollars to US dollars). Although VFV is cheaper, VOO's dividend payout is slightly larger, nearing 2%.
VFV vs VSP ETF
The VSP is the VFV with a Canadian dollar hedge, while it also follows the S&P 500. Many regard VSP as an excellent option, if you want your investment to be hedged against the CAD/USD exchange rate.
Although the risks are smaller when hedging, keep in mind that you'll pay a small fee for hedging your position. Additionally, the VSP has a 0.09% MER (Management expense ratio) compared to 0.08% for VFV.
VFV vs IVV ETF
IVV is an iShares version of an S&P 500 index fund and is only accessible for buying and selling in US dollars. Other than being more expensive than VFV at around $400, the differences are minor.
It’s a great choice, with an even smaller MER of 0.04%, and is expected to perform similarly to VFV. Still, fees for currency conversion must be considered, as IVV is traded solely in US dollars.
To summarize, Vanguard’s VFV ETF is a simple and quite successful index fund that does exactly what it says: it follows the S&P 500 and its success. It is one of the best options for investors looking forward to a reliable passive income, whether it's from dividends or capital gains.
Additionally, Vanguard's VFV is one of the lowest-cost ETFs, so consider investing in it if you're up interested in a diversified portfolio with US large-cap stocks.