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ETF Insight

ETFs for U.S. equity exposure

We review the most popular ETFs tracking the American stock market and narrow the field.

John Gabriel 12 March, 2015 | 5:00PM

Note: This article is part of Morningstar's March 2015 ETF Investing Week special report.

A significant portion of the typical Canadian investor's portfolio is dedicated to American stocks. There are many ETFs that track U.S. equities, so a little help sifting through the various options might be needed.

The S&P 500 Index is the most oft-cited proxy for the U.S. equity market and is viewed as an indicator of the economic health of the nation. Although not as old as the Dow Jones Industrial Average, the S&P 500 is more diversified and weighted by market capitalization, which makes it more representative of the U.S. market. Though it lacks exposure to small-cap stocks, the S&P 500 Index (which accounts for about 80% of the total value of the U.S. stock market) was nearly perfectly correlated with the broad U.S. market during the past decade.

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John Gabriel

John Gabriel  John Gabriel is a strategist for Morningstar’s manager research team.

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