Q: Good morning,
I currently hold VIG ETF in my Non Registered US$ account and VGG in my Non Registered Cdn$ account. Both of these ETFs have the same holdings but the VIG appears to be cheaper in terms of MER and perhaps more tax efficient if held in a RRSP.
Given that both VIG and VGG hold the same holdings and taxation not a consideration, I was thinking of selling the VGG ETF and purchasing some additional VIG ETF.
However, I just stumbled across another ETF (DGRW ETF) that I would appreciate your thoughts on as a potential replacement for VIG ETF. Although a bit more expensive in terms of MER, the annual performance over the last 10 years appears to be much better.
Thank you and I'll await your response.
Francesco
I currently hold VIG ETF in my Non Registered US$ account and VGG in my Non Registered Cdn$ account. Both of these ETFs have the same holdings but the VIG appears to be cheaper in terms of MER and perhaps more tax efficient if held in a RRSP.
Given that both VIG and VGG hold the same holdings and taxation not a consideration, I was thinking of selling the VGG ETF and purchasing some additional VIG ETF.
However, I just stumbled across another ETF (DGRW ETF) that I would appreciate your thoughts on as a potential replacement for VIG ETF. Although a bit more expensive in terms of MER, the annual performance over the last 10 years appears to be much better.
Thank you and I'll await your response.
Francesco
5i Research Answer:
VGG follows the Nasdaq US dividend achievers index. DGRW follows the WisdomTree US Dividend Growth Index. The indices are similar, but different in terms of overall mix, but there is plenty of overlap in the top holdings. Position sizes are also similar. Over five years, DGRW's return is 14.25% vs 12.69% for VIG and 12.48% for VGG. While it is better, we are not sure it is that statistically significant over just a five year period. Considering its higher fees, DGRW has done a solid job, and we would consider it just as good and it may end up a little bit better over time.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VGG, VIG.