Q: Hi- I am wondering if a small cap ETF would be a good choice for a RSP account (e.g. XCS and XSU specifically)? Aiming for low risk in this account.
Thanks
Thanks
5i Research Answer:
There is a lot of performance overlap between XCS and XSU, however, US small caps (XSU) have performed much better over the past 15+ years than Canadian small caps (XCS). We would not consider these funds to be low risk, as small-caps tend to exhibit high-risk characteristics.
Between XSU and XCS, we would prefer XSU, however, we would be mindful of small size risks, and volatility from its underlying holdings.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in XSU.