I’m trying to be tax-efficient within those parameters, and if VEE holds the stocks directly, it becomes a clear winner over XEC for me. Start a 14-day free trial to Morningstar Premium … Since the ETF’s start in Oct 2009, its benchmark index is up 79.16%; the ETF is up 66.02%. Formula Vee (Formula Fau Vee in Brazil and Germany) or Formula Volkswagen is a popular open wheel, single-seater junior motor racing formula, with relatively low costs in comparison to Formula Ford or … I did not know about TER, Total ETF expenses ~ MER + TER + FWT (foreign withholding taxes). Good point about the cost difference, I wonder if they’ve negociated some type of side agreement fee rebate. VWO | A complete Vanguard FTSE Emerging Markets ETF exchange traded fund overview by MarketWatch. Whether you’re looking for exposure to Albania or Zambia (or any place in between), this tool can help to identify the best options. Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead? beta and standard deviation on this page. I haven’t historically paid too much attention to BMO’s offerings and my memory is failing me, have they always held some of the ZEM stocks directly? I look forward to XEC being interchangeable with IEMG in its tax costs the way XEF is with IEFA. VXC vs. XAW: A Day Late and a Tax Dollar Short. VEA vs VWO. At least at the moment, here are some of the variations on the theme: • MSCI classifies Korea as an emerging market, so includes about 422 Korean companies in the MSCI Emerging Markets IMI Index. See the master list of all thematic investing ETF themes here. MSCI is an acronym for “Morgan Stanley Capital International”. If this investor was rebalancing largely by addition, they might not have added a lot to their US ETF(s) for several years, but then in 2018 they might have added a bunch to their US holdings. I really appreciate your help, especially given that so much of this information is presented in a way that doesn’t make it clear to the average layperson. It's kind of vague and hard to calculate but I wouldn't call it considerably more in … In the last 5 years, the market return and benchmark return for VEE are 5.20% and 5.73% respectively. averages, MACD, RSI, bollinger bands, support and resistance levels, and more. On average, it takes about 30 hours or less to complete our VEE … This index follows the performance of over 2,700 emerging companies, providing broad stock market exposure. XEC has an MER of 0.26%, and simply invests in its U.S.-listed counterpart ETF, IEMG, to gain exposure to emerging markets stocks. Hold more than one of VCN, XIC or ZCN for Canadian or VUN/VTI for XUU/ITOT)? None of the Information can be used to determine which securities to buy or sell or when to buy or sell them. EEMS complements EEM by following the MSCI Emerging Markets Small Cap Index, which tracks the performance of over 1,500 smaller companies located in the emerging economies. Unfortunately, the best Canadian ETF VEE … In 2011, BlackRock also launched the iShares MSCI Emerging Markets Small-Cap ETF (EEMS). It appears that the fund has grown substantially over a short period of time ($556 million on Sept 30, 2018 to $775 million today), so this is likely why they’re holding EEM until they can sell it and purchase individual stocks. I guess even with that for a BC resident it does still make sense to follow the priority of Canadian, then US ETF’s in taxable accounts first even if there’d be a tax refund on that second level of withholding tax on the emerging market ETF in a taxable account since the dividend yield is so high. I much prefer reading a detailed article to watching a video when absorbing information. ZEM also holds about 85% of its stocks directly, making its structure slightly more tax-efficient than XEM. As such, VEA is a core holding of many long-term portfolios, and can also be used as an efficient tool for overweighting ex-U.S. developed markets. Excellent at a 0.25% MER, covering India, which is a star performer in the emerging markets. Objective, in-depth analysis and ranking of every ETF on six key metrics and overall rating. For example, 5-year benchmark performance for IEMG is at 1.56%, but XEC is at 7.55%. All Information is provided solely for your internal use, and may not be reproduced or redisseminated in any form without express prior written permission from MSCI. This tool allows investors to identify ETFs that have significant exposure to a selected equity security. Bipolar Junction Transistors (BJT) 2. But for a Canadian or US broad market ETFs would you limit the amount of ETF from one provider ever (ie. Basically I’m wondering if you have some rules of thumb for this situation, similar to how Larry Swedroe suggests some specific thresholds when considering tax loss harvesting. As you may have already pieced together, there also is a single index that follows a combination of the MSCI Emerging Markets Index and the MSCI Emerging Markets Small Cap Index. VEA has a lower 5-year return than VWO (5.27% vs 8.6%). As you saw in the video, EEM had a cost of 0.69% on December 31, 2018, so BMO would be losing money if they only held this fund, charged 0.27%, and reimbursed the difference to investors. If you consider thought to be valid and important, is there a specific threshold (percentage of unrealized capital gains, or absolute dollar amount) that would make you think using a (virtually identical) ETF from another company. VEE vs XEC for Emerging Markets. Now that you have a number of international and emerging markets equity ETFs to choose from, I’ll show you in my next video how to properly combine them, so you’re neither excluding Korea from your portfolio, nor unintentionally over-weighting it. For instance, only equity ETFs will display VEE has an MER of 0.24%, and simply invests in its U.S.-listed counterpart, VWO, to gain exposure to emerging markets stocks. Insights and analysis on energy focused ETFs, Insights and analysis on Real Estate, Commodities, and other alternative investment focused ETFs. VWO follows the FTSE Emerging Markets All Cap China A Inclusion Index, which tracks the performance of over 4,000 companies located in 23 emerging countries around the globe. Start a 14-day free trial to Morningstar Premium … ESG Investing is the consideration of environmental, social and governance factors alongside financial factors in the investment decision–making process. That’s all they show for holdings. Their broader indices will be harder to replicate but so long as they make an effort to start converting, investors are likely to give them some time and keep growing assets. Regulations. This tool allows investors to analyze ETF issuer fund flow data. I usually enjoy reading more than watching a video (although my future videos will likely become more and more complex, so the video tutorial style may be easier for viewers to digest). IEMG tracks over 2,700 emerging markets stocks and has a cost of 0.14% per year. All Rights Reserved. Things are a little more complicated for VIU. more important database factors in the table below. Hi Justin, thanks for the useful website. MSCI ESG materials have not been submitted, to nor received approval from, the US SEC or any other regulatory body. In 2005, Vanguard U.S. released the Vanguard FTSE Emerging Markets ETF (VWO). Like many Vanguard funds,... VWO is one of the largest ETFs in the world, having been embraced by investors as an efficient way to establish exposure to emerging markets. That number should be known to Blackrock, so what’s stopping them? It’s called the MSCI Emerging Markets IMI Index. However, an ETF like ZEM (which attempts to hold the underlying stocks directly) is expected to have a higher TER than an ETF that just holds a US-listed ETF (like XEC). This may not be the case going forward, but during this period, the FTSE Emerging Markets All Cap ex China A Inclusion Index returned 6.4% in Canadian dollars on an annualized basis, while the MSCI Emerging Markets IMI Index returned 6.2%. I'm thinking about transitioning my emerging markets to VEE. This wrap structure makes XEC less tax-efficient than IEMG when held in a tax-deferred account (such as an RRSP, LIRA, RRIF or LIF). • MSCI classifies Kuwait as a frontier market, so excludes it from both its developed and emerging markets indices. Is it correct that you would still recommend XEC in this situation? Don't subscribe sector and market cap breakdown, among other equity fields. The bottom line for converting to the ETF version of equivalent mutual funds: lower costs = greater returns = more money.To illustrate this, I ran over to Mornginstar.com and compared the 5-year returns for VEIEX and VWO… However, ZEM does not include small cap companies, and has historically had noticeable tracking error, relative to its index, due to its sampling strategy (it does not hold all stocks within the index, just a sample of them). Our VEE courses are offered at subscription lengths of 120 days, but you can complete the course at any point within that time frame. Hopefully one day they can do an ETF that holds the stocks directly! Compare fees, performance, dividend yield, holdings, technical indicators, and many other metrics to make a better investment decision. FTSE classifies Poland as a developed market, so includes about 37 Polish companies in its FTSE Developed All Cap ex North America Index. From historical performance to expenses to volatility, the, Get Actionable ETF Investment Ideas every week with, Additional export capabilities to Excel or csv on any. As discussed in earlier installments, “FTSE” stands for “Financial Times Stock Exchange”, and “All Cap” indicates that the index tracks large, mid-cap, and small-cap companies. However, its cost is relatively high, at 0.82% per year. This includes moving @gsp: ZEM’s individual stock allocation was around 85% when I recently recorded the narration. will display the type of bond, coupon breakdown, credit quality, and more bond specific metrics. Plus, the country classifications are in a constant state of flux. Vanguard FTSE Emerging Markets All-Cap Index ETF advanced ETF charts by MarketWatch. Skip Navigation +1 415-349-0105 +44 800-088-5450 +1 844-822-8378 … I can confirm that VEE still just holds the U.S.-listed Vanguard ETF, VWO. VWO VEE is a past pick--it's the best emerging market ETF in Canada. Learn everything about Vanguard FTSE Emerging Markets ETF (VWO). VEA VWO … However, ZEM tends to hold a chunk in EEM and INDA throughout the year, so it would be difficult to calculate an estimate of the tax drag. See our independently curated list of ETFs to play this theme here. Results are displayed beginning with the equity ETF that makes the largest allocation to indicated stock. Sources: BlackRock Asset Management Canada Limited, BlackRock Inc., FTSE Russell Indices, MSCI, The Vanguard Group, Inc., Vanguard Investments Canada Inc., as of December 31, 2018. However, you must pass two SOA, CAS or CIA actuarial exams before applying to have your VEE … Your personalized experience is almost ready. VEE is in Canadian dollars vs. VWO whch … Am I reading this wrong? It’s the green or gray dried flowers of Cannabis sativa. Sources: BlackRock Asset Management Canada Limited, Vanguard Investments Canada Inc., as of December 31, 2018. (As you’ll recall from my last video, FTSE classifies Korea as a developed country, and therefore includes about 418 Korean companies in the FTSE Developed All Cap ex North America Index instead.). Investors may be better off purchasing the BMO MSCI Emerging Markets Index ETF (ZEM), which also trades on the Canadian stock exchange in Canadian dollars, but has an annual cost of just 0.27%. Sources: The Vanguard Group, Inc., Vanguard Investments Canada Inc., FTSE Russell Indices, as of December 31, 2018, Sources: BlackRock Asset Management Canada Limited, BlackRock Inc., FTSE Russell Indices, MSCI, The Vanguard Group, Inc., Vanguard Investments Canada Inc. as of December 31, 2018. But if I’m holding XEC in a taxable account, why can’t Blackrock report the dollar amount of tax paid getting dividends from Brazil to the US while compiling its tax forms, as it does while bringing that same dividend from the US to Canada, so that I can have it on my T3 from my brokerage and claim a foreign tax credit? In 2003, BlackRock released the iShares MSCI Emerging Markets ETF (EEM). The methodology can be found here: https://www.wisdomtree.com/-/media/us-media-files/documents/resource-library/pdf/research/methodologies/core-equity-index-methodology.pdf. I have been buying ZEM in my TFSA to minimize US withholding taxes. Check your email and confirm your subscription to complete your personalized experience. There are a number of notable differences between the MSCI and FTSE emerging markets indices. But I can’t find any numbers about direct investing. There is one situation where I postulate this would be a good idea: If an investor bought a lot of VTI starting some time after 2009, and then was adding and rebalancing over time, they might have a portfolio where the unrealized gain in VTI was very large and the unrealized gain in their Canadian, International and Emerging Markets was a lot less. When I go to the BMO website, it states that ZEM is 6.91% iShares MSCI Emerging Markets ETF; ZEM is also 2.26% iShares MSCI Saudi Arabia ETF. It can also be useful for opening up more potential tax loss selling opportunities (as the new holding would just need to go down by 5%/$5,000 in order to pop-up on an investor’s tax loss selling radar, assuming the 5%/$5,000 Swedroe rule of thumb). In the last three installments of my “Understanding ETFs” series, we toured the developed markets equity ETF landscape. Hi Justin, should we factor in the Trading Expense Ratio (TER) in the selection of an ETF? Neither MSCI ESG nor any of its affiliates or any third party involved in or related to creating any Information makes any express or implied warranties, representations or guarantees, and in no event will MSCI ESG or any such affiliate or third party have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) relating to any Information. Below is the comparison between VEA and VWO. The U.S. … Bond ETFs on the other hand, It … There’s no reason EEM should cost more than IEMG and roughly 1600 reasons it should cost less. So, it seems to me that VEE has changed its structure and now holds the stocks directly, so the double-level of foreign withholding tax should no longer apply. Screen ETFs based on asset class, issuer, market cap, expense ratio, and more. @Diane: The CPM model ETF portfolios generally include 1 U.S. equity ETF, 1 international equity ETF, and 1 emerging markets equity ETF. The course begins at the date of your purchase. @Bree: Certain pages on Vanguard Canada’s site are a bit misleading (their holdings section has always showed all the underlying stocks, even though VEE only holds a single ETF). Question for the ETF savvy people here. Find the latest Vanguard FTSE Emerging Markets (VWO) stock quote, history, news and other vital information to help you with your stock trading and investing. ETFdb has a rich history of providing data driven analysis of the ETF market, see our latest news here. By allocating about 89% of your EM equity investment dollars to EEM, and the remaining 11% to EEMS, you gain float-adjusted market-cap exposure to most emerging markets stocks, at an annual MER of about 0.69%. Thanks! The corresponding numbers for XEC are 5.69% and 6.09%. As of right now their management fees are nearly the same, but it appears that VEE … I realize ZEM excludes the emerging markets small cap index so they aren’t directly comparable but would ZEM be more tax efficient than XEC in an RRSP? XSOE is similar to a traditional emerging markets equity ETF, although it excludes state-owned companies. See our independently curated list of ETFs to play this theme here. MSCI ESG is a Registered Investment Adviser under the Investment Advisers Act of 1940. Track the movement of the 11 Sector SPDRs as well as the 500 component stocks. Insights and analysis on various equity focused ETF sectors. IEMG and XEC should have similar performance, if you convert IEMG’s returns (which are quoted in U.S. dollars) to Canadian dollars. This makes it similar to IEMG. VEE is in Canadian dollars vs. VWO … Compare the number of holdings, all ETF holdings, asset allocation, and much more. As EEM trades in U.S. dollars on the U.S. stock exchange, Canadian investors may find it more convenient to purchase the iShares MSCI Emerging Markets Index ETF (XEM) instead. FWIW I hadn’t watched the video until your reply. I see for IEMG, XEC, VWO and VEE you compare the estimated unrecoverable withholding taxes. Nor, given a simple choice of holding VXUS inside an RRSP vs … Blockchain technology allows for a recorded incorruptible decentralized digital ledger of all kinds of transactions to be distributed on a network. Currency in USD. @Park: VEE uses a U.S.-based wrap structure (where it invests directly in the U.S.-listed ETF, VWO). One advantage VWO has is fees. Artificial Intelligence is an area of computer science that focuses the creation of intelligent machines that work and react like humans. VEA vs. VWO: Head-To-Head ETF Comparison The table below compares many ETF metrics between VEA and VWO. Basic, basic question- why do the model portfolios contain 3-5 times more holdings in International ETFs than in Emerging Market ETFs? @Diego Revere: Nice out of the box thinking ;). @Tyler: Correct – the majority of return differences are due to currency fluctuations. Is TER a variable worth looking at? Shop for Vinyl, CDs and more from Vee VV at the Discogs Marketplace. Join other Individual Investors receiving FREE personalized market updates and research. Sources: BlackRock Inc., The Vanguard Group Inc., MSCI, FTSE Russell, as of December 31, 2018 . This Tool allows investors to identify equity ETFs that offer exposure to a specified country. The wrapper concept is very clearly seen. ZEM mostly purchases the underlying stocks directly. In addition to weekly, YTD and yearly returns, this section features the ETF’s beta, P/E ratio, © 2019 Canadian Portfolio Manager Blog. In the Dec 31/18 financial statements, it was 100% invested in its American listed counterpart. Justin, Portfolio Diversification Isn't Dead, It Was Just Sleeping, Revenue Exposure to Environmental Impact (%), Weighted Average Carbon Intensity (Tons of CO2e / $M Sales), Water Stress High Risk Business Segment (%), Revenue Exposure to Energy Efficiency (%), Revenue Exposure to Alternative Energy (%), Revenue Exposure to Pollution Prevention (%), Revenue Exposure to Water Sustainability (%), Revenue Exposure to Affordable Real Estate (%), Revenue Exposure to Major Disease Treatment (%), Human Rights Norms Violation OR Watch List (%), Global Compact Compliance Violation OR Watch List (%), Significant Votes Against Pay Practices (%). There are basically two types of Transistors: 1. Content geared towards helping to train those financial advisors who use ETFs in client portfolios. See the latest ETF news here. Compare the ETF’s asset class metrics, region exposure, structure, inception date and many This extra tax drag is due to the additional 15% U.S. withholding taxes that apply on foreign dividends paid to Canadian investors from the underlying U.S. fund. iShares MSCI Emerging Markets Index ETF (XEM), BMO MSCI Emerging Markets Index ETF (ZEM), iShares MSCI Emerging Markets Small-Cap ETF (EEMS), iShares Core MSCI Emerging Markets ETF (IEMG), iShares Core MSCI Emerging Markets IMI Index ETF (XEC), Vanguard FTSE Emerging Markets All Cap Index ETF (VEE), https://www.vanguardcanada.ca/individual/indv/en/product.html#/fundDetail/etf/portId=9556/assetCode=equity/?portfolio, https://www.blackrock.com/ca/individual/en/products/251423/ishares-msci-emerging-markets-imi-index-etf, Podcast 10: All That Glitters Are Gold ETFs, Hedging Your Bets With Currency-Hedged ETFs: O Canada, Hedging Your Bets With Currency-Hedged ETFs: An Overview, Podcast 7: Asset Location Strategies with the “Plaid” Model ETF Portfolios, Canadian Portfolio Manager: Introducing the “Light” ETF Portfolios, Part I: Foreign Withholding Taxes for Equity ETFs, Portfolio Construction and Management (9), - iShares MSCI Emerging Markets Index ETF (XEM), iShares MSCI Emerging Markets Small-Cap ETF, iShares Core MSCI Emerging Markets IMI Index ETF, Registered Retirement Savings Plan (RRSP), Registered Disability Savings Plan (RDSP), FTSE Emerging Markets All Cap China A Inclusion Index, Vanguard FTSE Emerging Markets All Cap Index ETF. • MSCI classifies Poland as an emerging market, so includes about 37 Polish companies in the MSCI Emerging Markets IMI Index. Is this difference strictly due to foreign exchange? Most of the main technical indicators are available to compare here. Insights and analysis on leveraged and inverse ETFs. See how 9 model portfolios have performed in the past. VWO is the market-leading A/B testing tool that fast-growing companies use for experimentation & conversion rate optimization. Compare your broker's rates now to find out if you can save money, We are redirecting you to the Broker Center now. Sources: FTSE Russell Indices, MSCI, as of December 31, 2018. Notify me of followup comments via e-mail. Last up, the Vanguard FTSE Global All Cap ex Canada … When BMO receives large cash inflows, they will purchase some U.S.-listed ETFs and gradually sell them over time (so you will likely always see a small holding of EEM). @Park: All of these ETFs track different indices, so they are expected to have slightly different returns. And for the emerging markets, would you kindly comment on XSOE and EMQQ as comparables to those suggested in the models. MSCI ESG Research LLC’s (“MSCI ESG”) Fund Metrics products (the “Information”) provide environmental, social and governance data with respect to underlying securities within more than 23,000 multi-asset class Mutual Funds and ETFs globally. @Justin: Thanks for the confirmation. In addition, its sister ETF, the iShares Core MSCI Emerging Markets IMI Index ETF (XEC), trades on the Canadian stock exchange in Canadian dollars. This wrap structure makes VEE less tax-efficient than VWO when held in a tax-deferred account (such as an RRSP, LIRA, RRIF and LIF).