Industry Distribution:

1. Information Technology: approx. 27%
2. Healthcare: approx. 14%
3. Finance: approx. 13%

TOP 3 Markets:

1. USA: approx. 98%
2. Canada: approx. 1%
3. Other International Markets: approx. 1%

The Vanguard S&P 500 Index ETF (CAD-hedged) reflects the composition of the S&P 500 Index, which is heavily dominated by US companies. Information Technology is the leading industry, followed by Healthcare and Finance. The market share of the USA is overwhelming, as the S&P 500 Index mainly consists of US companies. The ETF is hedged in Canadian dollars to minimize currency fluctuations, making it attractive for Canadian investors.

Vanguard S&P 500 Index ETF (CAD-hedged) (TSX:VSP)

Vanguard is a financial services company and not a manufacturing company. Therefore, Vanguard does not produce physical products. Instead, Vanguard offers a variety of investment funds and ETFs, including the Vanguard S&P 500 Index ETF (CAD-hedged), which is hedged in Canadian dollars.

Vanguard manages these financial products and invests in a diversified portfolio of stocks included in the S&P 500 Index. The management and structuring of such funds are done in Vanguard's offices, which are distributed worldwide, with headquarters in Valley Forge, Pennsylvania, USA.

Strategy: Passive Index Replication
Focus: Cost Minimization and Diversification

The Vanguard S&P 500 Index ETF (CAD-hedged) follows a passive investment strategy that aims to replicate the performance of the S&P 500 Index. This strategy focuses on minimizing costs and maximizing diversification by investing in a broad range of US large-cap stocks.

Vanguard relies on an efficient cost structure and offers investors the opportunity to benefit from the performance of the US market, while simultaneously reducing currency risk for Canadian investors through hedging the Canadian dollar. This strategy is particularly attractive for long-term investors seeking a stable and cost-effective way to invest in the US stock market.

Future growth is supported by the continuous demand for cost-effective and diversified investment opportunities, as well as the overall market performance of the S&P 500.

Commodities/Materials: Not applicable

The Vanguard S&P 500 Index ETF (CAD-hedged) (TSX:VSP) is an exchange-traded fund that tracks the S&P 500 Index. ETFs like VSP invest in a portfolio of stocks that replicate the index, not in physical commodities or materials. Therefore, the ETF itself does not import any commodities or materials.

The focus of VSP is on replicating the performance of the companies included in the S&P 500, which are mainly based in the USA. These companies may in turn import commodities or materials, but this information is specific to each company and not relevant to the ETF itself.

Competitive Advantage: Moderate

The Vanguard S&P 500 Index ETF (CAD-hedged) (TSX:VSP) offers investors the opportunity to invest in the S&P 500 Index while simultaneously minimizing currency risk through hedging against the Canadian Dollar. The competitive advantage of this ETF lies in its cost-efficient structure and the strong Vanguard brand, known for low fees and reliable performance.

Vanguard is one of the largest asset managers globally, giving it access to extensive resources and economies of scale. These advantages enable Vanguard to keep costs low for investors and thus offer a price advantage over smaller competitors.

However, the market for S&P 500 Index ETFs is highly competitive, with many providers offering similar products. Therefore, the competitive advantage of VSP is considered moderate, as it mainly relies on brand strength and cost efficiency, while the product offering is largely standardized.

Institutional Investor Share: Estimate: approximately 70-80% (2025)

Insider Buys/Sells: No significant insider transactions known (2025)

The Vanguard S&P 500 Index ETF (CAD-hedged) is a popular investment instrument mainly held by institutional investors such as pension funds, insurance companies, and investment funds. These investors appreciate the diversification and cost-effective replication of the S&P 500 Index.

Insider transactions are less relevant for ETFs as they are passively managed funds that do not own direct company shares. Therefore, there are usually no significant insider buys or sells as could occur with individual companies.

Market share of Vanguard S&P 500 Index ETF (CAD-hedged) (TSX:VSP): Estimated at 5-7% (2025)

Main competitors and their market share:

1. iShares Core S&P 500 Index ETF (CAD-hedged) (TSX:XSP): 8-10%
2. BMO S&P 500 Index ETF (CAD-hedged) (TSX:ZUE): 6-8%
3. Horizons S&P 500 Index ETF (CAD-hedged) (TSX:HXS): 4-6%
4. Fidelity S&P 500 Index ETF (CAD-hedged): 3-5%
5. Mackenzie S&P 500 Index ETF (CAD-hedged): 2-4%

The market for S&P 500 Index ETFs in Canada is highly competitive, with the market shares of the leading ETFs being relatively close. Vanguard S&P 500 Index ETF (CAD-hedged) holds a solid market share but lags behind the leading iShares ETF.

Economic moat:

The economic moat of Vanguard S&P 500 Index ETF (CAD-hedged) lies in the strong brand recognition and trust that investors have in the Vanguard group. Vanguard is known for low costs and a wide range of products, making it a preferred provider for many investors.

Compared to competitors, Vanguard offers similar benefits, but iShares and BMO also have strong brand presence and similar cost structures, intensifying the competition. Therefore, the economic moat is not significantly larger than that of competitors, as all major providers offer similar advantages.

Overall, there is no clear, superior economic moat, as the leading providers all have established brands with comparable cost structures and product offerings.

Managed Assets: 5 billion CAD (2024)

Annual Expense Ratio: 0.09% (2024)

Performance (last 5 years): Average of 10% p.a.

The Vanguard S&P 500 Index ETF (CAD-hedged) offers a cost-effective way to invest in the S&P 500 while minimizing currency risk for Canadian investors. With a low expense ratio of 0.09%, the ETF is an attractive option for long-term investors looking to participate in the performance of the US stock market.

Over the past five years, the ETF has achieved an average annual return of about 10%, attributed to the strong performance of the US market. This historical performance, combined with diversification across the 500 largest US companies, makes the ETF a solid choice for investors interested in a stable and diversified investment opportunity.

Additionally, the CAD-hedged aspect provides protection against currency fluctuations, which can be advantageous especially during times of currency volatility. This could be a key factor for Canadian investors looking to minimize their exposure to the US dollar.

Dividend Yield: 1.5% (estimated for 2025)
Dividend History: Quarterly payout

The Vanguard S&P 500 Index ETF (CAD-hedged) (TSX:VSP) regularly pays out dividends. The dividend yield is estimated to be around 1.5% for the year 2025. These payouts typically occur quarterly and are based on the dividends of the companies included in the index.

The reliability of VSP's dividend payments is high, as the ETF passes on the dividends of the companies included in the S&P 500 Index. These companies are usually established, large companies with stable dividend payments. The hedging in Canadian dollars also protects against currency fluctuations, increasing the stability of payouts for Canadian investors.