Recently, I read the world’s largest mutual fund company, Vangaurd Group Inc., is finally making the move north to Canada. In my opinion, this is great news for the do-it-yourself (DIY) investor.
While Canadians have for some time, been able to take advantage of ultra-low-cost ETFs offered by Vanguard through currency conversion transactions, I believe Vanguard’s move north of the 49th will trigger a whole new set of offerings in Canadian funds and offer much more competition for indexed investment space. This can only mean good news for you and I. Management expense fees for Vanguard products are, in some cases, 50% lower than competitors’ products who have already set-up shop in Canada. Moreso, if you’re paying your mutual fund manager some heafty fees to beat the index, I hope your mutual fund returns see evidence of that because if not, you could be paying 10 times the fees Vanguard charges. Instead of you or your mutual fund manager trying to beat the index, I think most mere mortals (I put myself in that category) are better off using the lowest-cost broad-market index product for their portfolios. Your indexed funds or ETFs will never beat the index but then again, they’ll never lag it by much either.
As industry pioneers, I am curious to see the menu Vanguard will offer Canadian investors and the value they might provide over existing ETF players later this year. When I find more news about this, I’ll be sure to post it on my blog, offering my own perspectives for what has been launched and also an overview of my Vanguard transactions if I make any.
Remember friends, when it comes to investing, fees are forever 🙂
What do you make of this news?
Will you be a buyer of Vanguard products when they come to Canada?
This is great news! You’re posting some great articles lately Mark, just getting around to my Reader and catching up. 🙂
I think you are doing well MOA! I wish I had started as early as you with DIY investing. Instead, I was busy with other things and letting an advisor manage my portfolio and losing most of my money in the mutual fund nonsense :(. I’m glad you’re NOT making that mistake.
You will do much better than I. I’m now 60 and not many years left. With no pension I have to make haste so yes I can’t keep equities around for the long as you should do. Buy and hold for you makes much sense but not for me. I do hold some blue chips for the dividends which I’ll hold onto for retirement income. Best wishes! You have a great blog!
Thanks very much for the kind words, really nice of you. Yes, buy and hold works for me but also some index investing. I hope you continue to stop by my blog and comment. Sounds like you have lots of experience to offer myself and readers 🙂
I have sold BNS, CPG, Keyera, Parkland, BCE, PPY, and Telus and trimmed my positions in utilities.
I have bought CCO when it bottomed after Japan, and am thinking of buying CGX since I like movies and even in a recession people stop vacations but go to movies! As things correct over the summer I’ll likely buy many of those that I have sold and depending what will happen to oil I may buy some more junior oils. What are you buying?
Lots of selling lately? I’m kinda surprised. You tend to sell equities high and then try and get back into them at lower prices? I bought a bit of RCI.B around $36 last month for my TFSA, just a very small position. I’ll discuss that in my monthly dividend income update later this month. I had some cash sitting in my TFSA and wanted to spend it on a dividend-payer I didn’t own yet. Now I do. I won’t be buying much of anything over the summer, if anything, making contributions to my full DRIPs.
I like your idea of CGX, I have considered that one because you are right, regardless of the economy it seems people love the movies 🙂
Yes, sold BNS, CPG, PPY all for great profit. Also, sold Keyera and Parkland for 15%.
Have trimmed back some utilities as well and am sitting on some money waiting for a correction which seems to be coming for the banks and will buy again.
I suppose I’ve become a miser as I hate paying any fees and so even ETF fees accumulate over time esp. with a sizeable port. BUT you only sell “rarely”! Oh, for me that’s the best part!! If I can make 10% on an investment I’ll take it and so with my stock port. I’m always selling with that rule and buying back that same good company when it’s stock falls again. @My Own Advisor
Have you sold anything recently?
Vanguard! Finally! Just don’t (please) try charging Canadians what you charge Australians.
I know, great news! I think it might be advisor-only products at first, but things will diversify for DIY investors eventually.
Yes, I’m into a bunch of diversified dividend paying stocks, gov’t bonds, some corporate bonds, and plenty of laddered GICs which make up a large portion of my portfolio. I use Investorline and like it so far. Why do you like ETFs? You still have to pay annual fees which can add up over time depending on the size of your portfolio. ETFs might be difficult to sell as well if no one is buying. I’m thinking stocks would be easier to sell if I had to sell them. What do you think? @My Own Advisor
I like ETFs because of their simplicity and their transparency. I don’t mind some fees on the order of 0.15-0.20% to get near market returns. True, I have to pay these fees, but for my RRSP a nice basket of ETFs works for me because of the passive returns they provide me. While I like ETFs, I’m also a HUGE fan of dividend-paying stocks. I’ve got a bunch of dividend-payers unregistered and in my TFSA. I guess for both stocks and ETFs, you’ve always got to have buyers and sellers. I rarely sell 🙂
Hey alright! I love Vanguard and think you Canadians will too!
I already own VWO, but hopefully over time, some more Canadian offerings will be available for DIY investors. One can only hope right?
Hey DP, how many Vanguard products do you own? Can you write about that on your site?
Great news. Am in the process of transferring out of mutual funds and into ETFs. Vanguard ETFs with their low fees will be a great choice. Any idea when they will set up shop here?
Looking forward to your write ups on the subject.
Thanks for your comment! Great stuff (process of transferring out of mutual funds and into ETFs). I heard later this year, Vanguard, but when I hear of an exact date, I’ll let you know. I have a feeling the “first round” will be for institutional investors, not DIY investors. The latter will come later. Stay tuned 🙂
Personally, I don’t like mutual funds nor ETFs. I don’t like paying fees nor relinquishing control of buying/selling assets to someone that I don’t know. I think I will continue buying my own GICs, bonds, dividend paying equities, and growth stocks. This allows me to keep costs down and have more control. I know the drawback is the time/effort required, but that’s where I am right now. I’m firmly convinced that I don’t want mutual funds and likewise convinced that ETFs are not much better. Why not be your own advisor and control everything?
I’m starting to learn that you don’t like mutual funds nor ETFs. That’s OK, but can I assume from that you own a basket of dividend-paying stocks?
I have a few of the latter, you might already know that from this blog. Totally agree with you, holding equities outright helps keep costs down and increase control. How can an investor not love that?