Looking at the list of hot-selling exchange-traded funds is normally an iffy way to figure out what investors are thinking.
A lot of the flow of money in and out of ETFs is driven by hedge funds, mutual funds, pension funds and endowments that reflect institutional views on portfolio management. But there’s one ETF on the latest list of top sellers that’s directly tied into the mindset of individual investors – the Vanguard Growth ETF Portfolio
VGRO is not burning up the sales charts, but it did grab 18th spot among the Top 20 sellers for the year to Oct. 31. Overall, it has a respectable $1.5-billion in assets and ranks among the largest funds in the category of balanced ETFs, also known as asset-allocation ETFs.
VGRO offers a way to buy a growth portfolio with a blend of 80-per-cent exposure to Canadian, U.S. and international (developed and emerging market) stocks, and 20-per-cent bonds from Canada, the United States and markets outside North America. The management expense ratio for VGRO is 0.25 per cent, quite fair but not as cheap as the 0.2 per cent MER for competing products from BlackRock and Bank of Montreal.
How do we know that VGRO’s sales numbers represent the thinking of individuals instead of big players? Because it’s an investment for people who want to buy and hold. If you were an institutional investor rotating into an asset class or taking a temporary position, why do it with a portfolio-in-a-box product like VGRO, with its seven underlying holdings?
The growth version of asset-allocation ETFs is proving to be most popular with investors, ahead of balanced versions that tend to have a tamer 60-40 mix of stocks and bonds. For example, the Vanguard Balanced ETF Portfolio has assets of $1.2-billion and the Vanguard Conservative ETF Portfolio holds $374-million.
VGRO’s 80-20 mix is aggressive. It’s for investors who can gut it out during stock market crashes like we saw in March and who won’t need their money for at least 10 years. As the latest sales charts show, a fair number of people are buying into this approach.
-- Rob Carrick, personal finance columnist
This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.
Stocks to ponder
Nuvei Corp. (NVEI-T) Montreal-based Nuvei is an e-commerce and mobile-commerce play that has seen large gains since premiering on the TSX earlier this year. Over the past month, eight analysts have launched coverage on the stock, of which six have buy recommendations and two have neutral recommendations. The stock is not cheap but the company has a robust growth profile. The company will be reporting its quarterly earnings results next week. Jennifer Dowty has this profile of the company. (for subscribers)
Here’s the bigger, undeniable - and ultimately bullish - reason markets are rallying after the election
No ‘blue wave’ means no big stimulus. That could have been a negative for the stock market. Yet, it surged. While some suggest it’s because a divided Congress will help keep tax cuts in place in the U.S., David Rosenberg sees a much bigger picture narrative arising out of the election results - and it’s bullish for markets in the long term. Here is the reality as he sees it. (for subscribers)
Investors march back into China bets after Ant IPO halt, U.S. vote
The shock suspension of Ant Group’s massive share offering and a possible Joe Biden U.S. presidency have become fresh tailwinds for China’s stock market, as investors rush to snap up a piece of an economy recovering rapidly from the coronavirus pandemic. Chinese regulators torpedoed the fintech giant’s $37 billion initial public offering, set to be the world’s largest stock market listing, after founder Jack Ma publicly criticised the country’s financial watchdogs and banks. As trillions of dollars locked up by the IPO return to the market, investors searching for a place to park that cash have lifted Chinese e-commerce firms such as Meituan and JD.com to record highs this week. (for subscribers)
Others (for subscribers)
Friday’s Insider Report: Large unitholder makes a $3.8-million investment in this REIT yielding 4.5%
Number Cruncher: Thirteen stocks to watch in resurgent U.S. health care sector
Number Cruncher: Braced for a weak economy: 20 stocks with cash flow momentum
Others (for everyone)
What’s up in the days ahead
David Berman this weekend shares his thoughts on how to make sense of the volatile markets of this past week when U.S. politics dominated attention at the world’s trading desks.
More Globe Investor coverage
For more Globe Investor stories, follow us on Twitter @globeinvestor
You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.
Compiled by Globe Investor Staff