# VFV vs XUS



## kungfuthug (Mar 14, 2017)

Hello.

I am confused. I am looking at buying either VFV and XUS.

1. XUS is cheaper per share and pays similar fees and dividends than VFV or am I seeing this wrong? 

2. If I had $10K to buy either wouldn't I be better off buying XUS and getting a higher number of shares therefore reaping the rewards of the more dividends being paid out?

Am I missing something obvious here?


Also, does it make any sense to buy any bond ETF's in todays low interest environments? I was thinking of perhaps VSB or ZAG but is there any point to either?

Thanks


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## zylon (Oct 27, 2010)

Very little difference between the two, but past performance shows XUS has slightly higher total return.

http://stockcharts.com/h-sc/ui?s=VFV.TO&p=W&st=2013-04-15&en=today&id=p88867973118

Regarding the distribution:
- both yield 1.55%
- so the yield on $10k is the same, regardless of number of shares held.

If this page loads correctly, it shows a comparison of the two funds.

https://www.vanguardcanada.ca/indiv...00000P290&target=fct&selectedFund1=F00000PXY0


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## Spudd (Oct 11, 2011)

The 12 month yield on both is exactly the same (1.58%) according to this:
https://www.vanguardcanada.ca/indiv...00000P290&target=fct&selectedFund1=F00000PXY0

Opinions vary on whether you should buy bonds or not. Canadian Couch Potato says you should:
http://canadiancouchpotato.com/2015/05/07/should-you-replace-bonds-with-cash/


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## james4beach (Nov 15, 2012)

I look at how old the fund is (has it proven the ability to track well over many years), fund size (an indication of others' trust it) and of course total return, since this includes all fees such as management plus trade expenses and reimbursements of fees.

Personally I prefer ZSP as it's the largest fund, and they hold the securities individually whereas I believe the other two hold the index indirectly through a US-based ETF. Someone correct me if I'm wrong but I think ZSP holds the underlying stocks directly whereas XUS and VFV are simply wrappers for other ETFs. I don't like wrapping kinds of structures due to additional layers.

ZSP: inception November 2012, fund size 3.5 billion
3 year performance 16.87%

VFV: inception November 2012, fund size 1.2 billion
3 year performance 16.97%

XUS: inception April 2013, fund size 0.9 billion
3 year performance 17.08%


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## latebuyer (Nov 15, 2015)

I chose XUS because you need a lot less for a drip then vfv. Vfv is .02% cheaper but it says

The MER would have been 0.08% without any absorptions or waivers. Vanguard Investments Canada Inc. expects to continue absorbing or waiving certain fees indefinitely but may, in its discretion, discontinue this practice at any time. 

It is confusedly worded but i assume i means the mer could go up.

If you are concerned about such things both of the respective us funds are permitted to use derivatives, portfolio sampling strategies, and lend out portfolio securities to generate additional income. I didn't dig into whether zsp allows this though. Just a note i read part of the reason the returns differ is due to these alternative practices.


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## james4beach (Nov 15, 2012)

For those who may be interested in this detail, I looked into the annual financial statements to verify this:

XUS holds IVV, so it's a proxy for another ETF
VFV holds VOO, so it's also a proxy for another ETF
ZSP actually holds the individual stocks of the S&P 500 index

Because of this I prefer BMO's ZSP. Maybe it's just me, but I don't like things like wrappers of wrappers (funds of funds) and prefer minimizing the number of middle men or agents.


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## kungfuthug (Mar 14, 2017)

Thanks for the replies...

Is disadvantage or advantage to holding two different efts of the same index such as XUS and VFV? I am surprised how the yield is the same for XUS and VFV considering the dividend amount per unit are similar but the XUS is a cheaper buy, how is this possible?


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## GreatLaker (Mar 23, 2014)

kungfuthug said:


> Thanks for the replies...
> 
> Is disadvantage or advantage to holding two different efts of the same index such as XUS and VFV? I am surprised how the yield is the same for XUS and VFV considering the dividend amount per unit are similar but the XUS is a cheaper buy, how is this possible?


There's no point in holding 2 different ETFs that both track the same index, like XUS and VFV that both track the S&P500. Holding both just adds complexity in managing your portfolio, tracking distributions, tracking cost base for taxes etc. Sometimes I will hold similar ETFs in different accounts, for example I hold ZCN (S&P TSX Composite) in my non registered and VCN (FTSE Canada All Cap) in my RRSP. They follow similar but slightly different indexes, but it's no extra work since I hold a Canadian equity fund in each of those accounts.

Unit Price is irrelevant in calculating yield. Whether a unit trades at $10 or $50, if you hold a total of $1000 with a 1.5% yield your annual yield will be $15. Yield is measured in %, not $.


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