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Large Cap or Total Market ETFs for Canada and US given the current Market Situation due to Covid-19?

  • Total Market (VCN / XUU)

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Discussion Starter #1
Hi there,

I wanted to get people's opinions on Large Cap vs Total Market ETF's for the mid term for both Canada and US markets.
  • VCE - Canada Large Cap
  • VCN - Canada Total Market
  • VFV - US S&P 500
  • VUN / XUU - US Total Market
For someone who is recently retired and is looking at investing in Canadian and US Equities would you recommend Large Cap or Total Market? I have been in Large Cap (VCE and VFV) for the past 10 years and they have out performed Total Market. All the recommendations I have seen have been towards Total Market to get more diversification.

I am in the process of re-balancing my portfolio and getting entirely out of individual stocks and moving entirely to ETFs, so should I stick with VCE / VFV or move to VCN / XUU. I'm looking at XUU over VUN because the mer is half.

With the current financial situation, some would say that Large Cap has rebounded well over the past month and there is considerable more growth opportunity for Mid and Small cap. Others would say that many small corporations will not be able to weather the storm and will be bankrupt. What are your thoughts?

Thanks
 

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What I have read is small cap got hammered especially hard on the nose dive in March and then out-performed large cap with the April uptick. All that says is small cap is more volatile. My view has always been that large cap/total market are essentially interchangeable, and I would guess based on intuitive logic that large cap ETFs would have more rotation into, and out of the ETF as companies slip into, or out of, the large cap definition. Much of the small cap entities are not big enough to move the needle. Flip a coin?
 

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I would pick the ETFs that are well diversified. The CAN mkt index ETFs are mainly banks and oil cos. ZLB is a low vol fund of large caps w more balanced sector weightings.

A big portion of the US mkt are the FAANGs ~ 20% of the S&P 500. You may want to look at EQL which is an equal weight 500 or some ETFs w a tilt like XMS iShares low vol US or DQD CI First Asset Wisdom Tree US quality dividend ETF. Better sector diversification
 
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