In the committed boycotter’s investment portfolio, the right allocation to U.S. stocks is zero.
But a there’s a strong case for holding U.S. stocks that transcends the U.S.-Canada friction of early 2025. U.S. stocks dominate the global stock market like no other country, and they include dominant names in technology, health care and other sectors where the Canadian market is thin.
Over a lifetime of investing, U.S. stocks have shown potential to be your prime driver of returns. This installment of the 2025 Globe and Mail ETF Buyer’s Guide is designed to help you find the right exchange-traded fund for your U.S. exposure.
The ETFs covered here typically track the S&P 500 or a similar index of larger companies. Nasdaq funds are not included because they are even more tech-focused than the S&P 500. A couple of funds in the mix are presented specifically for the benefit of investors concerned that the incredible gains of the U.S. market in recent years make it vulnerable to a sharp pullback.
The funds shown here are unhedged, which means they reflect the gains of the underlying portfolio as well as changes in the exchange rate between the Canadian and U.S. dollars. Unhedged funds do better when our dollar is falling, and lag when it rises. Try hedged funds if you want the returns of your portfolio without currency impact. Tickers for hedged versions on this list are included.
This year’s ETF Buyer’s Guide has so far covered Canadian equity and bond funds. Still to come: international and global equity funds, Canadian dividend funds and, finally, asset allocation funds.
Here’s a look at the technical terms used in the guide:
Assets: Shown to give you a sense of how interested other investors are in a fund.
Management expense ratio (MER): The main annual cost of owning an ETF on a continuing basis; returns are shown on an after-fee basis.
Trading expense ratio (TER): The cost of trading commissions racked up by the managers of an ETF; add the TER to the MER for a fuller picture of a fund’s cost. Most of the U.S. equity ETFs included here don’t do enough trading to generate much of a TER.
Dividend yield: U.S. dividend yields tend to be lower than those in Canada, so don’t expect much in the way of income from most U.S. equity ETFs.
50-day trading volume: Average number of shares traded daily over the previous 50 days; it’s easier to buy and sell at competitive prices if an ETF is heavily traded.
Number of holdings: Gives you an indication of whether a fund offers broad stock market coverage, or holds a more concentrated portfolio that may behave differently than benchmark indexes.
Sector weightings: Included to help you verify how well a U.S. equity ETF will diversify your Canadian holdings with more exposure to sectors such as tech and health care.
Launch date: The older an ETF is, the more likely it is that you can look back at a history of returns through good markets and bad.
Download the source excel here.
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