ETF Education Report: VSS

What this ETF is trying to do

The Vanguard FTSE All-World Ex-US Small-Cap Index Fund ETF Shares (VSS) is an exchange-traded fund. This type of fund generally aims to track an index of small companies located in various parts of the world, excluding the United States.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For VSS, the year-to-date (YTD) price return is approximately 9.06%. The one-year price return was about 8.48%, and the three-year price return was approximately 49.27%.

• Total Return: This includes the share price change plus any cash distributions (dividends) paid out. The YTD total return is approximately 9.86%, the one-year total return was about 11.86%, and the three-year total return was approximately 63.89%.

To visualize the price change, the current price is $156.32. The estimated price from roughly one year ago was approximately $144.10.

Income and distribution explanation

Some investors look for "income," which is cash paid out by the fund. VSS has a distribution yield of approximately 2.88%. This means the cash distributions are about 2.88% of the current share price. Over the last 12 months, there were 3 payouts. The distributions are described as irregular or less frequent.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly. StockValueFinder uses an "erosion-risk score" to measure this risk. For VSS, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this fund (note that this is a partial list):

• WSP Global Inc: 0.70%

• Arc Resources Ltd: 0.35%

• Emera Inc: 0.35%

• GFL Environmental Inc: 0.32%

• AtkinsRealis Group Inc: 0.30%

• Stantec Inc: 0.29%

• CAE Inc: 0.26%

• Alamos Gold Inc Class A: 0.24%

• Gildan Activewear Inc: 0.24%

• Open Text Corp: 0.24%

Pros

• The fund shows a positive three-year total return of approximately 63.89%.

• The erosion-risk measurement is rated as "good."

Cons

• Distributions are irregular and occur less frequently.

• The list of holdings provided is only a partial view of the full portfolio.

Beginner takeaway

When studying VSS, remember that price returns and total returns are different. The total return is a more complete picture because it includes the cash distributions you receive. Also, while a distribution yield provides cash, it is not the same as the total growth of your investment.