ZWC:CC - 2 Canadian ETFs That Could Help You Retire a Millionaire
2024-03-27 10:00:00 ET
So, you want to be a millionaire and aren’t willing to go on a game show. Well, lucky for you, there is a far more simple way to create millions and with far less taxation.
In fact, with the click of two buttons you can gain access to two exchange-traded funds (ETF) that could help you retire a millionaire — especially if you’re on the younger end. By simply keeping up with consistent investment in these ETFs while also investing dividend income, you can retire a millionaire with ease!
VXC ETF
First off, we have Vanguard FTSE Global All Cap ex Canada Index ETF ( TSX:VXC ). This is a low-cost option for those wanting exposure to one of the world’s largest investment management companies with diverse investments.
The VXC ETF, in particular, is meant to be a base for investors; it offers exposure to a broad range of global equities. However, this excludes Canadian stocks, as many Canadians already invest in Canadian stocks. Instead, it tracks the performance of the FTSE Global All Cap ex Canada. This includes large-, mid-, and small-cap stocks from developed and emerging markets around the world.
Investors then get exposure to thousands of companies through this method. Those companies are diverse across various sectors and regions, which helps to mitigate risk and capture global market returns. Therefore, you can look forward to a diverse range of assets with the click of a button.
And it’s done quite well! Shares of VXC ETF have climbed 128% since coming on the market back in 2014. Just this last year, shares are up 21.3% for investors. And if you look at its long-term chart, you’ll see that, overall, it doesn’t have very many dips in the market, only in times of uncertainty like the pandemic. Therefore, it’s certainly one to consider as a strong long-term hold for growth and income.
ZWC ETF
Another strong ETF to consider for millionaire retirement is BMO Covered Call Canadian Banks ETF ( TSX:ZWC ). Of course, this is far more focused on both Canada and the banking sector. However, this investment strategy provides investors with exposure to the strength of Canadian banks while also generating income through dividends and its covered call options strategy.
The ETF provides you with exposure to the equity securities of Canadian banks, which are known for their stability, dividend payments, and consistent performance — especially for those seeking a long-term strategy. The Canadian banks are some of the largest financial institutions in North America, not just Canada, with very little competition.
Furthermore, the ETF operates with a covered call strategy. This helps generate additional income by selling call options on the underlying stocks and collecting premiums. This can enhance returns, especially in a flat or rising market. It, therefore, offers higher income potential compared to traditional equity ETFs.
What’s more, the ETF offers an incredibly high dividend yield at 7.5% as of writing, with shares on the rise. Shares are now up 13% since bottoming out in October, and there is likely to be more strength as the economy recovers. So, add this ETF to your long-term, millionaire-making portfolio.
The post 2 Canadian ETFs That Could Help You Retire a Millionaire appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has positions in Bmo Canadian High Dividend Covered Call ETF and Vanguard Ftse Global All Cap Ex Canada Index ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2024