Index funds aren't supposed to save you from a market setback. In a correction or crash, you will lose money. They merely save you from the total ruin that can come with leverage, or from thinking you can outplay the stocks or options market as an amateur.
I'm glad to see OP's comment voted to the top, b/c it models good thinking. He knows what he doesn't know, and so he sticks to index funds.
Also -- I don't know anybody who still buys S&P 500 funds, now that there are broader funds available. None of the funds for Canadians that GP listed is limited to the S&P 500, so it's unclear why you would respond as if that's the index he's talking about.
- he's overweighted on Canada. Being Canadian themselves, that's a double risk. If Canada does poorly, the chance of his livelihood being affected is high. Investments should be anti-correlated from livelihood risks.
- despite being 30% in Canada, VEQT has 2.5% in NVDA. By itself that's fine, but once you add similar amounts for MSFT, GOOG, META, AAPL, BCOM, etc, it becomes a significant portion of the index.
The point of an index fund is to be diversified. If one sector crashes but other sectors do well you're still fine. The OP will lose significant money if either Canada or AI crashes, even if the rest of the world is doing well.
Vanguard/Blackrock could set the allocation to whatever they wanted, but it's a conscious choice. Absolute returns are not necessarily the only consideration (if they are, perhaps buy a NASDAQ fund).
I'm glad to see OP's comment voted to the top, b/c it models good thinking. He knows what he doesn't know, and so he sticks to index funds.
Also -- I don't know anybody who still buys S&P 500 funds, now that there are broader funds available. None of the funds for Canadians that GP listed is limited to the S&P 500, so it's unclear why you would respond as if that's the index he's talking about.