Looking to invest internationally without having to pick your own stocks?
This Vanguard ETF might be the right choice for you to get easy access to worldwide investments.
Let’s go over this Vanguard VXC ETF review to see if it’s the right choice for you.
Invest In Emerging and Developed Markets Excluding Canada
Invest in the Vanguard VXC ETF to leverage the performance of a broad global equity index that focuses on developed and emerging markets, excluding Canada.
- Low-cost to invest
- Globally diversified portfolio of stocks
- MER might be a bit too high
What Is Vanguard VXC ETF?
Vanguard FTSE Global All Cap ex Canada Index ETF (VXC) is a passively managed ETF that tracks the performance of a broad global equity index that focuses on developed and emerging markets worldwide, outside of Canada.
The fund tracks the performance of the FTSE Global All Cap ex Canada China A Inclusion Index.
The underlying index invests primarily directly or indirectly in small-, mid-, and large-capitalization companies throughout developed and emerging market countries besides Canada.
Vanguard VXC ETF is a low-cost fund that was listed on the TSX on July 7, 2014.
VXC is currently trading close to a price of $53.89.
VXC Key Facts
As of June 24, 2022:
- Ticker Symbol: VXC.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $1.217 Billion
- MER: 0.21%
- 12-Month Trailing Yield: 1.99%
- Currency Traded: CAD
- Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available
Vanguard VXC ETF MER And Fees
The fund comes with a management fee of just 0.20%. It has a Management Expense Ratio (MER) of, 0.21% which accounts for any additional expenses you can expect to bear for owning the fund.
Vanguard VXC ETF Dividend Yield
As of June 30, 2022, Vanguard VXC ETF’s dividend yield is as follows:
- 12-month trailing yield: 1.99%
- Distribution yield: 2.70%
- Dividend schedule: Quarterly
It means that atop the returns through capital gains on the underlying holdings, investing in VXC ETF also provides you with quarterly dividend payouts.
Vanguard VXC ETF Performance And Returns
The chart below shows the growth of a hypothetical $10,000 invested in VXC ETF since inception:
Showing 30 June 2014 – 30 Jun 2022:
| Fund Type | Month End | YTD | 1YR | 3YR | 5YR | Since Inception |
|---|---|---|---|---|---|---|
| VXC (Market Price) | − 6.74% | −19.13% | −13.50% | +5.29% | +6.33% | + 8.50% |
| VXC (NAV) | − 6.56% | −19.06% | −13.28% | +5.36% | +6.39% | + 8.53% |
| Benchmark | − 6.66% | −18.80% | −13.04% | +5.52% | +6.56% | + 8.75% |
Go to the Vanguard website for real-time performance numbers of VXC.
What Does Vanguard VXC ETF Invest In?
This section of my Vanguard VXC ETF review will cover what the fund invests in. VXC ETF attempts to track the FTSE Global All Cap ex Canada China A Inclusion Index to the best of its ability and before fees and expenses.
The underlying index focuses on tracking the performance of a group of publicly-traded companies listed in emerging and developed market countries worldwide, excluding Canada and including China.
Vanguard VXC ETF offers you exposure to a heavily diversified portfolio of securities in the form of a single investment product.
VXC ETF is a 100% equity-focused fund. Without exposure to any fixed-income securities, the fund entails a higher degree of capital risk that it tries to mitigate by diversifying its exposure across various emerging and developed markets worldwide.
Vanguard VXC ETF Portfolio Characteristics
As of June 30, 2022:
| Fundamentals | Fund | Benchmark |
|---|---|---|
| Number of Stocks | 11,362 | 9,996 |
| Median Market Cap | $69.5 B | $77.8 B |
| Price / Earnings Ratio | 14.1 x | 14.5 x |
| Price / Book Ratio | 2.2 x | 2.3 x |
| Return on Equity | 15.0% | 15.4% |
| Earnings Growth Rate | 15.1% | 15.7% |
Vanguard VXC ETF Market Allocation
This section of my Vanguard VXC ETF review would typically discuss the asset allocation split that the fund offers you between equity securities and fixed-income assets, like bonds and GICs.
However, Vanguard VXC ETF invests its assets entirely in the stock of publicly-listed companies throughout global emerging and developed markets countries.
The asset allocation I will discuss for the fund will be on the geographical weightings of its holdings.
As of June 30, 2022, Vanguard VXC ETF focuses almost two-thirds of its assets to US-listed companies. It allocates 61.3% of its AUM to the stock of companies in the US. Its second-largest geographical asset allocation is towards Japan-based companies.
The fund allocates 6.3% of its AUM to equity securities listed in Japan. UK-listed securities account for the third-largest portion of its asset allocation, with 4.2% of its AUM invested in publicly-traded companies in the UK.
The fund also invests in emerging markets countries like China and India, allocating 4.2% and 1.8% of its AUM to equity securities in these two countries.
As of 30 Jun 2022:
| Country | Region | Fund |
|---|---|---|
| United States of America | North America | 61.3% |
| Japan | Pacific | 6.3% |
| United Kingdom | Europe | 4.2% |
| China | Emerging Markets | 4.2% |
| France | Europe | 2.4% |
| Switzerland | Europe | 2.4% |
| Australia | Pacific | 2.2% |
| Taiwan | Emerging Markets | 1.9% |
| Germany | Europe | 1.9% |
| India | Emerging Markets | 1.8% |
| Total | 88.6% |
Vanguard VXC ETF Market Capitalization
As of June 30, 2022:
| Capitalization | Fund |
|---|---|
| Large | 61.67% |
| Medium/Large | 3.96% |
| Medium | 15.86% |
| Medium/Small | 7.01% |
| Small | 11.04% |
| Total | 99.54% |
Vanguard VXC ETF Top Holdings
This section of my Vanguard VXC ETF review will cover the top holdings for the fund.
Vanguard VXC ETF invests a significant portion of its assets in US-listed securities, and its top ten holdings consist of US stocks. The most notable thing about its asset allocation is its focus on the top tech stocks.
Its most significant holding is Apple Inc., accounting for 3.43% of its asset allocation. Microsoft Corp. comes in second, accounting for 3.13% of its asset allocation. Amazon.com Inc. is its third-largest holding, accounting for 1.50% of its asset allocation.
| Holding Name | % of Market Value | Sector |
|---|---|---|
| Apple Inc. | 3.43% | Computer Hardware |
| Microsoft Corp. | 3.13% | Software |
| Amazon.com Inc. | 1.50% | Diversified Retailers |
| Alphabet Inc. Class A | 1.07% | Consumer Digital Services |
| Tesla Inc. | 0.96% | Automobiles |
| Alphabet Inc. Class C | 0.95% | Consumer Digital Services |
| UnitedHealth Group Inc. | 0.78% | Health Care Management Services |
| Berkshire Hathaway Inc. Class B | 0.76% | Reinsurance |
| Johnson & Johnson | 0.76% | Pharmaceuticals |
| Facebook Inc. Class A | 0.60% | Consumer Digital Services |
Vanguard VXC ETF Sector Weighting
The fund allocates 21% of its assets to the tech sector, 13.9% to the consumer discretionary sector, and 13.7% to financial sector stocks worldwide outside of Canada.
As of 30 Jun 2022:
| Sector | Fund |
|---|---|
| Technology | 21.0% |
| Consumer Discretionary | 13.9% |
| Financials | 13.7% |
| Industrials | 13.2% |
| Health Care | 12.7% |
| Consumer Staples | 6.8% |
| Energy | 4.6% |
| Basic Materials | 4.0% |
| Real Estate | 3.7% |
| Utilities | 3.4% |
| Telecommunications | 3.1% |
| Total | 100.0% |
Vanguard VXC ETF Region Exposure
As of June 30, 2022:
| Region | Fund | Benchmark |
|---|---|---|
| North America | 61.30% | 61.10% |
| Europe | 15.90% | 16.20% |
| Emerging Markets | 11.30% | 11.20% |
| Pacific | 11.20% | 11.30% |
| Middle East | 0.20% | 0.20% |
| Other | 0.10% | — |
| Total | 100.00% | 100.00% |
VXC Risk And Volatility
As of June 30, 2022:
| Fund Type | R-Squared | BETA | ALPHA | Standard Deviation | Sharpe Ratio |
|---|---|---|---|---|---|
| Fund | 0.99 | 1.03 | − 0.02 | 13.90% | 0.34 |
| Benchmark | — | — | — | 13.44% | 0.37 |
Vanguard VXC ETF Alternatives
This section of my Vanguard VXC ETF review will discuss a few alternatives you can compare the fund with.
Considering the top holdings for the fund and the index that VXC ETF tracks, the first name that warrants the most obvious comparison would be iShares XAW ETF, but there are two others you could consider.
Which Is Better – XAW Or VXC?
iShares XAW ETF is the most easily comparable fund to Vanguard VXC ETF. iShares XAW ETF tracks the MSCI ACWI ex Canada IMI Index, net of expenses. Despite tracking a different index, most of its holdings are similar to those of VXC ETF.
iShares XAW is a fund of funds that holds several iShares ETFs, offering significant diversification.
It boasts a slightly higher MER of 0.22% but offers a bigger payout than VXC ETF through a 2.29% 12-month trailing dividend yield (As of July 19, 2022). iShares XAW could be considered a viable alternative to VXC ETF.
Vanguard VXC ETF Vs. Vanguard VCN ETF
Vanguard VCN ETF is a fund that tracks the FTSE Canada All-Cap Domestic Index. The fund invests directly or indirectly in small-, mid-, and large-cap stocks of publicly-listed companies in Canada.
VCN ETF is effectively the opposite of VXC ETF, offering you low-cost exposure to the Canadian stock market. You could consider investing in this fund if you want exposure to the domestic stock market in the form of a single investment product.
Vanguard VXC ETF Vs. Vanguard VEE ETF
Vanguard VEE ETF is a fund designed to provide you with investment returns by tracking the performance of a broad emerging market index.
It tracks the FTSE Emerging Markets All Cap China A Inclusion Index, using its assets to directly or indirectly invest in small-, mid-, and large-capitalization stocks of companies in emerging markets countries.
It does not invest in Canadian stocks or any developed market countries, making it more of a pure-play on high-growth emerging market stocks.
How To Buy Vanguard VXC ETF In Canada
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Conclusion – Is VXC A Good Investment?
It pays to diversify your investment portfolio outside Canada to offset potential losses to your investment returns if there is a significant downturn in the domestic market.
Vanguard VXC ETF offers you the opportunity to substantially diversify your portfolio with exposure to various international markets in emerging and developed countries.
You could consider VXC ETF a good long-term investment for your self-directed portfolio for hands-off and convenient exposure to international equity securities outside Canada.
Check out my detailed iShares XAW ETF review if you are interested in considering an arguably better alternative to Vanguard VXC ETF.
How would you use ZLB in a portfolio of ETF’s . I am rebalancing my portfolio and I am not sure what to do with ZLB. It has performed well over the years so I have kept it although I can not rationalize why as it is not a pure play in any sector.