ETF Index Investing Course
13.2. What I Invest In and Why
I periodically receive questions from those taking the course whether I have changed the ETFs that I invest in since the course was originally published. It is here where I will document any changes and updates:
Fortunately in the broad-market, passive ETF investing world, updates are actually very infrequent. I still hold the same ETFs that I originally held when I started investing years ago.
With that said, there is one ETF that I have been investing in lately (just with some of the new money that has come in, while keeping past purchases intact). That ETF is called VFV and represents the S&P 500 index (the US market).
Keep in mind that VUN (what I mentioned in the video) is still an ETF that I own a LOT of, and I have NOT sold any VUN to replace it with VFV.
Both are still excellent choices in my opinion, and it can definitely be argued by some that VUN is better, while others will argue for VFV.
The main difference between the two ETFs is that VUN represents a lot more companies in the US (it follows the CRSP US Total Market Index), whereas VFV only represents the S&P 500 (which includes a bit over 500 of some of the largest companies in the US).
In theory, VUN should outperform VFV (the S&P 500) because VUN includes smaller companies which tend to grow faster than established older companies where it's harder for them to move the needle, and many are issuing dividends as opposed to investing as much into growth as some of these smaller companies.
It is for the reason that chose VUN over VFV in the past (i.e. I wanted the higher probability of receiving higher growth). For the past while however, VFV has actually been outperforming VUN, and so I figured it doesn't hurt to have some of my portfolio focused around the S&P 500.
Please don't stress-out about this decision for your own portfolio. Depending on who you ask, you'll get some that are all about the S&P 500 (VFV), while others are all about the CRSP US Total Market Index (VUN). You're basically just picking 1 index over another, but they are both excellent indexes for the US portion of the portfolio.
As an aside, VFV also has a lower fee (MER) compared to VUN. It's a point worth mentioning but keep in mind that with index ETFs like these, you're paying rock-bottom prices on fees so I wouldn't get too hung up on this.
The bottom line is that VFV has been outperforming lately and it has a lower fee (even though theoretically VUN should be the one that outperforms long term).
I hope that helps, and let me know in the comments if you have any follow-up questions.
UPDATE 2: A common question that often comes out of learning about all this is "What ETFs should I be holding in my RRSP vs TFSA vs my taxable account". I get asked this a lot so I actually went ahead and wrote a giant guide on the subject. Below is the link to the full guide, and if you have any questions about it, feel free to ask in the comments and I'll gladly help.