Right now, if you have $10,000, investors are going to want to put that cash to work. But that’s a lot of money to invest. So if you’re like me, you don’t exactly want to throw $10,000 into the first growth stock that comes across your screen.
Instead, use that $10,000 to create a solid foundation for your portfolio. Luckily, options exist that can fit within every type of risk tolerance, and every type of goal. Even better, there’s one exchange-traded fund (ETF) that I would recommend for those seeking long-term growth, while still earning dividends.
VXC ETF
For Canadians looking to invest in something that provides you with growth and income, I would consider the Vanguard FTSE Global All Cap ex Canada Index ETF (TSX:VXC). VXC aims to closely track the performance of the FTSE Global All Cap ex Canada Index. This index includes thousands of stocks from both developed and emerging markets around the world, providing investors with broad exposure to international equities. So really, it’s like getting a diversified, global portfolio with the click of a button.
By investing in VXC, investors gain exposure to companies across various regions, including the United States, Europe, Asia-Pacific, and emerging markets. This diversification can help reduce risk by spreading investments across different geographical areas and industries.
Furthermore, the index is weighted by market capitalization, meaning that larger companies make up a larger portion of the index. This approach aligns with the philosophy of many passive investment strategies, which seek to replicate the composition of the broader market.
Growth and dividends
Over time, VXC has seen a lot of growth and provided a ton in dividends. All while offering a low-cost approach considering it merely tracks the performance of an index. As of writing, investors can grab onto a dividend yield at 1.58%. Furthermore, shares have grown 11% year to date already.
This growth has been even higher over the last few years. While other companies, countries, and stocks have seen shares fall never to return to pandemic highs, VXC ETF has taken off. In the last decade alone, shares of VXC have climbed 128%! That’s a compound annual growth rate (CAGR) of 8.6% during the last 10 years.
Add on the company’s quarterly dividend, and investors can certainly look forward to earning quite a lot in the next few years.
How much?
Let’s say that you put that $10,000 into VXC today. You then see shares continue to climb by the same CAGR as it has in the past. Remember, it’s actually grown quite a lot more than that in the last year. So you could be met with even more growth.
Furthermore, you’ll add an additional cash flow stream from the company’s dividends. The dividend can change depending on the underlying holdings of the ETF. But for now, we’ll go with the current dividend of $0.14 per share. In that case, here is how much you could earn in the next year.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| VXC – now | $57.55 | 174 | $0.14 | $24.36 | quarterly | $10,000 |
| VXC – 8.6% | $62.50 | 174 | $0.14 | $24.36 | quarterly | $10,875 |
By the end of next year, you could easily have returns of $875 and dividends of $24.37. This would total $899.36 in passive income. Yet again, given the history of the ETF, I would expect that to increase even more.
