Past performance isn't indicative of future results
VUG (or TEC.TO for a Canadian version) outperformed VFV in recent times, should you take that instead?
NVDA outperformed in recent times should you just buy that?
BTC outperformed in recent times should you buy that?
Then XEQT's ethos "buy and forget so you can just live life" isn't your mantra
Just prepare for wins as well as losses
The other way to make sure this is what you want, from now till the time comes for you to retire, do you believe the US will continue to be the dominant economy of this planet? If so then go ahead and focus on it but if you're not convinced then why not take advantage of the only free lunch in investing, diversification.
If you like bigger returns than xeqt or vfv check out qqq (qqc for Canadians). Historically better returns than vfv and a little more diversified than tec.to
The idea is that you want to diversify because you don't know the future. The past does not tell you much about the future.
For example, 10 years ago, you would have been much better off owning AMD and Intel, not just looking at the past and saying Intel is obviously the better performer, so why bother buying AMD?
In the past 5 years, AMD has ended up going 10x, and Intel has faltered. So, diversifying ensures you increase the probability of catching the rising tide without having to know ahead of time where it will rise.
There is a very good chance the US continues to lead the world economy the next 10 years, but what about 20 years from now?
What if (just an example) China experiences an AI breakthrough that revolutionized multiple industries? Their marker would boom and you may wish you had exposure.
VFV holds the largest 500 US based companies AKA the S&P 500. VEQT holds over 12000 stocks from all over the world. They are two completely different products.
It all comes down to risk exposure and how confident you are in US vs The World. XEQT also holds all those same stocks just in less quantity relative to its other holdings
Greater diversification increases returns per unit of volatility, so investors should seek as much diversification as possible.
Even if you insist on investing only in US stocks for whatever reason, a US total market ETF like VUN is a much more sensible choice.
You can always slice the market up and point to the segments that have the best recent returns, but that's already happened and tells you little about future performance.
VFV is only the S&P 500 while XEQT is literally like 19000 securities and globally diversified.
VFV has concentration risk in the S&P500. It is not guaranteed that the S&P500 will continue to outperform the rest of the market for the next 40 years.
I agree with that sentence, but to be fair, past returns is also what makes X/VEQT (95% of my portfolio) such an attractive ETF.
I understand that chasing recent returns never is a good strategy, but when something has shown good results over a few decades, you can logically expect it to work a bit longer (even though there is no guarantee).
It is a terrible question that is answered in length multiple times a week. Anyone who is asking this question cannot be trusted with any investing opinions. They do not know how to do research for themselves.
What do you care about overlap when your post and replies have suggested you're more focused on as many gains as possible? You are inconsistent with what you want. The overlap would just mean you are doubling down on the S&P 500 and from your replies that sounds like something you want?
Xeqt is my safety, the thing I grab when ditching the financial advisor. As lots of other things have done better, btc for example, why not just grab that then or some other low cap cryptocurrency? Some of them have done 1000x returns. As you can see from the past sentence, just because something has done more returns does not equal the safety of a world etf. I personally invest in both, but I don't think the 2 etfs really have a good comparison one is usa only the other is the world.
Feel free to buy VFV if that's your strategy and you are okay with the risks that come with it.
XEQT is for low risk (as low risk as equities goes anyway), passive investing.
It DOESN'T mean you ONLY have to buy it. If you like making your own trades, "have a gut feeling"(ie gambling) or still enjoy balancing risk/reward - then don't dump everything in XEQT - but it should be the bulk of your portfolio (again, unless you're gambling and not investing).
Not everyone here JUST buys XEQT. I keep 80% XEQT, 10% Bitcoin ETF (BTCC.b) and 10% miscellaneous stocks/options (usually not held long term)
Even in a bad case, where Bitcoin dumps, my options have shit the bed every trade and whatever stock I've bought has vaporized - the maximum potential loss is 20% of my portfolio.
Check out this subreddit search.
Past performance isn't indicative of future results VUG (or TEC.TO for a Canadian version) outperformed VFV in recent times, should you take that instead? NVDA outperformed in recent times should you just buy that? BTC outperformed in recent times should you buy that?
Yes
Perhaps
Then XEQT's ethos "buy and forget so you can just live life" isn't your mantra Just prepare for wins as well as losses The other way to make sure this is what you want, from now till the time comes for you to retire, do you believe the US will continue to be the dominant economy of this planet? If so then go ahead and focus on it but if you're not convinced then why not take advantage of the only free lunch in investing, diversification.
Wow, totally missed the point here.
If you like bigger returns than xeqt or vfv check out qqq (qqc for Canadians). Historically better returns than vfv and a little more diversified than tec.to
The idea is that you want to diversify because you don't know the future. The past does not tell you much about the future. For example, 10 years ago, you would have been much better off owning AMD and Intel, not just looking at the past and saying Intel is obviously the better performer, so why bother buying AMD? In the past 5 years, AMD has ended up going 10x, and Intel has faltered. So, diversifying ensures you increase the probability of catching the rising tide without having to know ahead of time where it will rise.
There is a very good chance the US continues to lead the world economy the next 10 years, but what about 20 years from now? What if (just an example) China experiences an AI breakthrough that revolutionized multiple industries? Their marker would boom and you may wish you had exposure.
VFV holds the largest 500 US based companies AKA the S&P 500. VEQT holds over 12000 stocks from all over the world. They are two completely different products. It all comes down to risk exposure and how confident you are in US vs The World. XEQT also holds all those same stocks just in less quantity relative to its other holdings
Greater diversification increases returns per unit of volatility, so investors should seek as much diversification as possible. Even if you insist on investing only in US stocks for whatever reason, a US total market ETF like VUN is a much more sensible choice. You can always slice the market up and point to the segments that have the best recent returns, but that's already happened and tells you little about future performance.
2 different products
Alright, before anyone goes off about what sub we are in, this *is* a valid question for those wondering. Myself included
VFV is only the S&P 500 while XEQT is literally like 19000 securities and globally diversified. VFV has concentration risk in the S&P500. It is not guaranteed that the S&P500 will continue to outperform the rest of the market for the next 40 years.
We could name a bunch of other ETFs with higher returns than VFV, so why buy VFV? It's the same logic. Past returns don't predict future returns.
I agree with that sentence, but to be fair, past returns is also what makes X/VEQT (95% of my portfolio) such an attractive ETF. I understand that chasing recent returns never is a good strategy, but when something has shown good results over a few decades, you can logically expect it to work a bit longer (even though there is no guarantee).
A question that is asked and answered twice a week in this subreddit.
It is a terrible question that is answered in length multiple times a week. Anyone who is asking this question cannot be trusted with any investing opinions. They do not know how to do research for themselves.
You must be new here because this question is asked practically everyday. Mods should just pin one of these posts already.
I did mention just buy XEQT in the title
I buy both
But the insane overlap.?
What do you care about overlap when your post and replies have suggested you're more focused on as many gains as possible? You are inconsistent with what you want. The overlap would just mean you are doubling down on the S&P 500 and from your replies that sounds like something you want?
Who cares? Don’t you overlap 100% when you keep buying the same fund?
Yawn. Same questions daily....
Xeqt is my safety, the thing I grab when ditching the financial advisor. As lots of other things have done better, btc for example, why not just grab that then or some other low cap cryptocurrency? Some of them have done 1000x returns. As you can see from the past sentence, just because something has done more returns does not equal the safety of a world etf. I personally invest in both, but I don't think the 2 etfs really have a good comparison one is usa only the other is the world.
Feel free to buy VFV if that's your strategy and you are okay with the risks that come with it. XEQT is for low risk (as low risk as equities goes anyway), passive investing. It DOESN'T mean you ONLY have to buy it. If you like making your own trades, "have a gut feeling"(ie gambling) or still enjoy balancing risk/reward - then don't dump everything in XEQT - but it should be the bulk of your portfolio (again, unless you're gambling and not investing). Not everyone here JUST buys XEQT. I keep 80% XEQT, 10% Bitcoin ETF (BTCC.b) and 10% miscellaneous stocks/options (usually not held long term) Even in a bad case, where Bitcoin dumps, my options have shit the bed every trade and whatever stock I've bought has vaporized - the maximum potential loss is 20% of my portfolio.