(VSP) Vanguard SP500 CAD hedged - Ratings and Ratios

Vanguard S&P 500 CAD Hedged ETF (TO:VSP) is designed to replicate the performance of the S&P 500 Index, hedged to Canadian dollars to mitigate currency risk. The ETF provides exposure to 500 of the largest publicly traded companies in the U.S., offering diversification across various sectors. It is managed by Vanguard Investments Canada Inc. and is listed on the Toronto Stock Exchange.

The fund employs a passive management strategy, aiming to track the Morningstar US Market TR CAD Index. With an AUM of 4,036.52M CAD, it represents a substantial investment vehicle for Canadian investors seeking U.S. market exposure. The ETFs structure allows for transparency, with holdings disclosed daily, and it is structured as a tax-efficient investment vehicle under Canadian tax regulations.

From a technical perspective, VSP has shown recent price action around 88.85 CAD, with key moving averages indicating a short-term downtrend but long-term support. The 20-day SMA of 86.36 suggests recent weakness, while the 200-day SMA of 92.64 indicates longer-term stability. The ATR of 2.53 reflects moderate volatility, with average daily trading volume of 111,529 shares over the past 20 days.

Looking ahead, the 3-month forecast for VSP is expected to remain range-bound, influenced by broader U.S. market trends and currency fluctuations. Based on the current technical setup, the ETF may face resistance near the 200-day SMA of 92.64 and support around the 50-day SMA of 90.71. The ATR of 2.53 suggests that price movements are likely to remain within a 5-7% range over the next quarter.

Fundamentally, the outlook for VSP will depend on the performance of the U.S. equity market, particularly the S&P 500, as well as the CAD-USD exchange rate. Given the Federal Reserves tightening monetary policy and expectations for U.S. corporate earnings, the ETF may experience moderate headwinds. However, its diversified exposure to the U.S. market and hedging strategy position it as a stable choice for Canadian investors seeking international equity exposure.