Transcription
Investing in ETFs is one of the most simple ways to invest, but there are thousands of ETFs to choose from. So, how can you choose the right one? In this video, we will go over how to read ETFs and my top three ETF picks for 2026.
Beginners tend to complicate which ETF to choose from because we have so much information nowadays. ME fees, Vanguard or Black Rockck, Beimo or Shares, Canadian or US dollars. The most important part is low fees and if the actual ETF is tracking the underlying asset. But scratch all that. Let's start researching.
Okay, first things first, let's go over what an ETF is. An ETF stands for exchange traded funds. And all it is is it's a large basket of stocks. So this ETF can hold stocks like Facebook, Microsoft, Google. It can either hold two stocks, five stocks, 10 stocks, thousand stocks, 9,000 stocks. It can hold a bunch of stocks and it can become into one single stock or an ETF. This makes things less complicated because you don't want to have too many holdings. You just want to hold one thing.
All right. So, now that makes sense, let's look at one of the most popular and famous ETFs. All right. It's a Vanguard S&P 500 index ETF, also known as ticker V. Now what the Vanguard S&P 500 is, it it holds the top 500 US companies. Think you know Nvidia, Tesla, Google, Coca-Cola, Proctor Gamble, all these large popular companies. Now whenever someone talks about the stock market, oh the stock market is up or the stock market is down, they are talking about the S&P 500 ETF, which stands for the standard and pores 500 exchange traded fund.
Now, as you can see, in the last five years, the stock market is up 87%. Just this year alone, it's been up 18%. Now, if you go date all the way back to 2010, the stock market is up almost 521%. Now, on average, this ETF is supposed to gen like this ETF or the stock market is supposed to be up 5 to 10% every year. So, this is probably one of the best tools for you to put your money in and let it compound. And the best time to invest in this ETF is when a stock market crashes because we've seen plenty of stock market crashes over the years, right? The stock market tends to crash between 20 to 30% and that's usually a good indicator on when to buy this ETF. So, if we can see, look at all those times that the stock market has crashed. It has recovered every single time. If we look at year to date this year during April during the uh Trump tariffs, we did crash almost 20 to 20 to 30%. And as you can see, if you bought the April tariffs, right, if you weren't scared and you invested, you would be up almost 37% year to date, which is amazing earnings. Your interest rate, your your bank account, your savings account can't even generate that much of interest.
Now, if you're a Canadian like me, then you can buy the similar ETF called VFV, which pretty much does the same thing. All right. Now, the reason why it's only performed 12% year-to- date is because it is Canadian hedge, meaning this is the Canadian dollar. So, we're going to uh deep we're going to dive deep into this ETF and see what's different and how you can research this. So, the most simple way to start researching is you can literally just go search up VFV holdings. All right? And you can see that it's its parent company, which is Vanguard, will show up. Now, the S&P 500, there's many other companies or hedge funds or institutions that track the S&P 500 500. You can have ZSP, VO, VFV. Um, and these are all just different types of companies that track the same index, but it's just they're selling their own product to you. So, there are fees. It's very minimal fees, but it it does make a difference. But anyways, today we're going to be looking at the Vanguard S&P 500.
All right. Now, all you're going to do is you're going to find holdings because the whole the most important part for us is we want to see what's inside this this um ETF, right? We want to know what stocks it's holding. So, you're just going to scroll down and you're going to fall into something here. Top 10 holdings. So as you can see the top 10 holdings are Nvidia, Apple, Microsoft, Amazon, Broadcom, Google, Meta, Tesla, Brookshire Hathaway, and you can see the percent value. So if you want to own Nvidia or any of these companies, then this ETF does hold a 7% stake. So meaning if you had a $100 invested in this ETF, $7 would be invested into Nvidia. Another $7 will be invested into Apple.
Now, you can even ask ChatGBT. You can literally go into chat GBT and you can ask what are the top 100 holdings in VO and it'll spit up some of the num some of the stocks and companies. So as you can see Nvidia 7%. Google 3.2%. So it you know nowadays AI makes it so much easier. But if you don't trust AI, you can always just go into this website or you can go into one of my favorite websites called stock analysis. All right. Um I searched up VFV because this is the Canadian version. So, if you just look at the holdings, you can just click on holdings and it shows you all it does. It holds VO, which is the US version of the S&P 500. Actually, not the US version. This is the main version, right? VF is the Canadian version of the S&P 500. So, you can just click on VO and you can go under holdings and you'll see that these are the top 25 holdings. So, it's pretty much the same as we've seen on ChatGpt and also on Vanguard's parent website.
Now, the second ETF I like is XEQT. So, mind you, VFV gets us invested in the top 500 US companies. Now, the second one we're going to search up is XCQT. All right. And we're also going to Now, all XQT is, it's an all-in-one ETF, meaning you get to invest in the US, the Canadian stock market, and also emerging markets. And we're going to look into that once we open it up. So Xeqt has actually done 20 19.57% year to date. All right. And that actually beats Did it beat the Yeah, that actually beat the S&P 500 which only performed 18% year to date. Now this is because emerging markets were underperform performing overperforming. We had the Canadian stock market that was up almost 22%. But let's just dig right into it.
So what's in the X XEQT? So the first one we see is XIC which is the Canadian stock market and let's see what XIC. So this does hold 27% in XI XIC which is the TSX60 the top 60 Canadian companies and some of the top performing some of the top holdings for XIC is Royal Bank, Shopify, TD Bank, Nbridge, Brookfield Corporation and so on and so on. These are blue chip Canadian companies. Now the second holding is a stock called an ETF called XEF which is the core MSEI EF. So that means the emerging market. So this is the emerging market ETF and it tells you it has a total holdings of 2500 individual holdings. And we can see some of these stocks are ASML Ro RO Holdings, Astroenica, you know, HSBC. So this is a Chinese company. This is a company from the Netherlands, a semiconductor company. Novartis, this is a European company. So, you can see there's a whole basket of so many companies that are just expanded worldwide.
Now, let's look at the ITO, which is the Eyesshares Core S&P US total stock market. Now, this one holds about 2500 individual holdings, and I think they're primarily in the US. So, 32% is in technology, 12% in financials. So this is similar to the S&P 500 but it's a little bit more broad. So you're getting a lot more exposure. You can see Netflix is also in one of the holdings. Um the next holding it has this is a eyesshares S&P total US stock market index. So again this is another US stock market ETF and you can see we're just dissecting the hell out of this ETF. So it looks like it's holding ITO as well. So that's almost about almost about 40% holdings in just the S&P 500 or the US stock market.
Now let's look at the other one, XEC. Now XC is an equity ETF with a total of 3,000 individual holdings and this is another emerging market index ETF. Now let's look at the holdings. As you can see, technology is the large part of this ETF. Um Taiwan Semiconductor is one of the main ETFs in here. I mean, main stocks here, which is 9%, Tensson Holdings makes about 4%. So, there's a lot of Chinese companies, Alibaba. So, emerging markets are markets that are emerging, right? They're they're they're the top contender. They're growing. All right? They're not underperforming. So, lots of good stocks to pick from here. Um, if you, you know, most people what they choose to do is they they choose to only put 99% of their money into this XCQT ETF because they it's an all-in-one ETF. You get all the exposure you need. It's very simple. You can continue to put your money into this ETF monthly or weekly and you can set it and forget it. All right.
The next stock we're going to look into is QQQ. Now, QQQ is a NASDAQ 100 ETF and this focuses more on tech stocks. So, it holds one of the top 100 stocks in the NASDAQ index, but it primarily consists of tech stocks. Now, as you can see, it has performed 22% year to date, but we can look at the Canadian version of XQ of QQQ, and it's performed almost the same, 20%, and this is in Canadian dollars. If you don't want to pay the US dollar, you can buy this in Canadian dollars.
Now, let's just dig into what's actually inside this ETF. Okay, so as you can see, XQQ is an ETF with a total of 217 individual holdings. Now, one thing to note, and we haven't discussed this, is the ME fees. So, fees are important um in the long run because you don't want to be overpaying because fees in the long run, they can start adding up and it takes away from your total returns. So, as you can see, XQQ has a fee of 0.39%. Now, let's look at XCQT and how much fees that we were paying on that. That fee was only 0.21%. And let's look at VFV. VFV had a very low fee of 0.09%. So, this is almost like 9 cents on $1,000. So, it's not a lot.
Now, the cheaper version of XQQ if you're US is QQM. So, there's no difference. It's just a lower fee and the price is lower. So, it's 0.15% in ME annual fee. And all this ETF does is track the NASDAQ 100, which is QQQ. All right. Now, as you can see, same thing. QQQ has performed 22% year-to date. And if we dig into the holdings, again, this ETF holds 102 individual holdings. So, look at that. 53% is dedicated into technology stocks. And if you look at the technology stocks, it holds Nvidia, Apple, Microsoft, Amazon, Tesla, Google, Costco, uh, Shopify, Pepsi. So, it does have some stocks that aren't tech stocks, but as you can see, majority of it is tech stocks. So, if you're like me and you want more growth in your portfolio, then QQ uh, XQQM or QQQ is the ETF you want to allocate into your portfolio. This expense ratio is your is your fee. All right. Holdings is what shows you what stocks are inside the holdings of this ETF. All right, if you can remember these two things, then you're good to go.
And let's say we wanted to compare the ETFs. All right, all you have to do is let's say we're let's say we want to compare, you know, SPY, which is the S&P 500, and you can compare that to let's compare let's compare that to to VFV. All right. So year today you can see that the S&P 500 has done 19% and VFV has done only 13%. So this is underperforming the underlying asset which is the S&P 500. But let's say we do the last 5 years um you know VFV has done 111% and the S&P 500 has done 100%. So VF, which is a Canadian version, has actually o outperformed the US version of the S&P 500 in the last 5 years. And that's probably because of currency differences, right? But let's look at the last 10 years, and we can see they're pretty much performing about the same. So unless you're very anal about, you know, small percentage of outperformance, then of course you want to choose something that's similar to performing to the S&P 500.
Let's look at ZSP and see if that's performing about the same. So, we're also seeing a difference in that one. You might want to search up which ET which other ETFs we have. So, let's look at other Canadian ETFs that track the S&P 500. So, we can look at on chat GPT S&P 500 Canadian ETFs. I spelled Canadian wrong. All right. So, we have VFV already looked at. Let's look at VSSP. So this is the CAD hedge version, meaning it takes away from the currency difference, right? So we are seeing that VSSP does perform pretty much the same. It's almost like a two to 3% difference, which I don't think is too bad if you want to uh you know factor in like foreign exchange like you know FX fees and whatnot. But that's pretty much how you guys can compare two two or three kinds of ETFs together.
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