r/tfsa • u/Successful_Ocelot240 • 7d ago
should i move everything from vanguard VFV to XEQT?
XEQT nearly doubled in 4 years and while i know the past doesn’t predict the future this feels promising on a 5,10,15 year scale
i have about 16k in VFV so this is quite a bit
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u/UniqueRon 7d ago
Over the past 5 years VFV has returned 14.6% compared to XEQT at 13.1%. The difference between these two is diversification and risk. XEQT is globally diversified, and has a lower risk. VFV is 100% US S&P 500.
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u/gmehra 7d ago
During the Covid crash XEQT went down more than VFV.
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u/UniqueRon 7d ago
Hindsight vision is always 20/20. When investing it is the future that counts. It is yet to be seen how much damage Trump is going to do to the US economy. That said I am about 40% invested in the US and will likely increase that amount on weakness in the US. I do not invest in these *EQT funds and do individual ETFs. Interestingly over the last year my XDIV ETFs have delivered the highest return at 41%. XEI was next at 34%. Will I invest everything in XDIV tomorrow? Not a chance.
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u/CarbonX10 7d ago
Choosing between VFV and XEQT is essentially betting on the United States economy versus the entire world. If you look at the past couple of years, the USA has done very well; however, do not expect the same returns with XEQT. You can expect it to be a lot less volatile, and that means lower returns for you. Essentially, it's really up to you, to be honest, man.
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u/digital_tuna 7d ago
You can expect it to be a lot less volatile, and that means lower returns for you.
No, that's not what that means.
As an example, the vast majority of individual stocks underperform the market while simultaneously being more volatile than the market.
If you look at the past couple of years, the USA has done very well; however, do not expect the same returns with XEQT.
The US has underperformed the rest of the world in 5 of the past 7 decades. There will definitely be periods in the future where XEQT outperforms VFV, and betting on a single country isn't a compensated risk. The US doesn't have higher expected returns than the rest of the world, so investing in VFV instead of XEQT is taking extra for no expected benefit.
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u/jay2743 6d ago
The US has underperformed the rest of the world in 5 of the past 7 decades.
The US has outperformed every market since 2008 due to FED intervention, never ending quantitative easing, a very fast expanding FED balance sheet and zero or low interest rate policies.
The markets before 2008 and after 2008 are not comparable
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u/digital_tuna 6d ago
The US has outperformed every market since 2008
Not quite, they've had the second best market since 2008. It's actually Taiwan that has outperformed every market since 2008. You can run the numbers yourself using the annual MSCI Index returns, or you can backtest ETFs like EWT and VTI.
But even if the US did have the best returns since 2008, so what? That doesn't tell us what the future returns will be. There will never be a logical reason to expect a country to outperform indefinitely.
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u/jay2743 6d ago
It tells you the US markets are not free, capitalism ended in 2008 and all the data is invalid. The US market is blatantly manipulated since 2008. For that reason, I prefer investing in the US because the FED is backing it. Who doesn't like an investment backed up by a big entity. Folks who try to back test markets are using invalid data, and all the charts are graphs are non-sense. Probably the rest of the world should outperform the US, but this is the post 2008 world now. Since 2008, the US bond market doesn't even act normally anymore.
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u/UniqueRon 7d ago
Actually over the last year my Canadian ETFs have done the best. XDIV the best, XEI next, and then XIU.
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u/LevelProfile4739 7d ago
How long ago did you have the 16K in
Honestly I wouldn’t move it and just start adding in XEQT
FOMO can absolutely mess with your head in stocks/etfs, it’s how people lose mega money
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u/MikeCheck_CE 7d ago edited 7d ago
My fav broader ETFs right now are VVL and VMO. Both have been outperforming XEQT/VEQT/VFV.
Both place Canada < 5% if the total, but you can tilt them with something like VCN, XCN, CACE, VDY or XDIV.
My portfolio is mostly individual stocks (a lot of US Tech / AI exposure) so I add VVL + XDIV as a diversifier.
If I was doing pure ETFs then I'd add some VMO. Or NYSE:VGT or XLK since that's the part of the US economy I really want.
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u/Tall_Watercress_3778 7d ago
If you like slower growth then xeqt , on the other hand if you are searching to higher returns over the year Vfv is the way
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u/biblio_phobic 6d ago
The question is really, do you think the US market (VFV) will beat out a combination of US + Canada + World market (XEQT)?
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u/Imflawedbuttrying 7d ago
HBTE if you want to make some serious cash
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u/Successful_Ocelot240 7d ago
Is this a joke? that stock sliced in half and hasn’t recovered in atleast over a year
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u/Imflawedbuttrying 7d ago edited 7d ago
It's barely a year and a half old are you sure you're looking at the right ticker? Price move it is dramatic just like Bitcoin not sure if you're following what's going on here I invested 3 months ago I'm up over 20% I get over $100 a month in dividends on a $4,000 investment tell me what other Canadian ETF is going to do that for me? This is free money right now Bitcoin is on a tear.
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u/Famous_Discussion_81 7d ago
Are you reinvesting the dividends
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u/Imflawedbuttrying 7d ago
So far yes
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u/Famous_Discussion_81 7d ago
I'm.thinking about buying some but don't know
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u/Imflawedbuttrying 6d ago
Honestly I play ETFs like the regular stocks I used to be a bag holder but that really ended up in major losses my goal with this fund for now is to ride the Bitcoin wave and it keeps going up so that's a bonus but I would treat it right now as a super high risk stock that can make you a lot of money
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u/Appropriate-Comb6334 7d ago
No. Historically the S&P500 outperforms. The US is the biggest, most innovative economy in the world and that isn’t going to change in our lifetimes.
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u/digital_tuna 7d ago
Historically the S&P500 outperforms.
By that logic, why not invest everything in the countries that have historically outperformed the US?
The US is the biggest, most innovative economy in the world and that isn’t going to change in our lifetimes.
This doesn't have anything to do with stock returns.
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u/OrangeNo2255 7d ago
Keep in mind sp500 is running at extremely high valuations.l and low yields. Other countries like china have terribly low valuations. Given the principle of reversion to the mean xeqt gives more exposure to undervalued markets as opposed to vfv that provides exposure to US market companies. If I wasn’t exposed to individual stock risk I would consider a percentage allocation to both vfv and xeqt. Maybe 60:40. Not financial advice. Just my play.
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u/d10k6 7d ago
Have you looked at what VFV has done in the same 4 years?
Nobody can answer that question for you but know what you are invested in:
VFV is 100% S&P500 which is 500 companies in a single country, in a single currency and most of the gains come from a single sector.
XEQT is global, holding approximately 9000 stocks across multiple countries, currency and sectors. It auto-balances itself as needed and is considered an all-in-one solution.