Vanguard Canada lists five new equity ETFs; cuts fees

Aug 13th, 2013 | By | Category: Equities

Vanguard has listed five new locally domiciled exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX).

Vanguard Canada lists five new equity ETFs; cuts fees

Vanguard has introduced five new equity ETFs on the Toronto Stock Exchange.

The new funds, which are based on equity indices, bring the total number of Vanguard ETFs on the TSX to 16.

Earlier this year, Vanguard saw its TSX-listed ETF range surpass $1 billion in assets under management, a little more than 18 months since it entered the Canadian ETF market.

Atul Tiwari, principal and managing director of Vanguard Investments Canada, said: “Vanguard ETFs are distinguished in the market by low-cost, broadly diversified portfolios.”

He added: “Our new ETFs follow this same principle, enabling financial advisors and investors to better construct broadly diversified portfolios at a low cost.”

Among the new funds are USD and CAD-hedged versions of the firm’s hugely successful US dividend-focused ETF, the Vanguard Dividend Appreciation ETF (VIG). This NYSE Arca-listed fund, which is linked to the Nasdaq Dividend Achievers Select Index, has proved consistently popular with investors in the US and has more than $17 billion in assets.

The TSX-listed versions of the fund will likely provide stern competition to iShares‘ comparable products, namely the iShares S&P US Dividend Growers Index Fund (CAD-Hedged) (CUD) and iShares US High Dividend Equity Index Fund (CAD-Hedged) (XHD), which have combined assets of $481 million.

The new funds and their underlying indices are as follows:

Vanguard FTSE Canada All Cap Index ETF (VCN)
FTSE Canada All Cap Index. TER 0.12%

Vanguard FTSE Developed ex North America Index ETF (VDU)
FTSE Developed ex North America Index. TER 0.28%

Vanguard US Dividend Appreciation Index ETF (CAD-hedged) (VDH)
Nasdaq US Dividend Achievers Select Index (CAD hedged). TER 0.28%

Vanguard US Dividend Appreciation Index ETF (VGG)
Nasdaq US Dividend Achievers Select Index. TER 0.28%

Vanguard US Total Market Index ETF (VUN)
CRSP US Total Market Index. TER 0.15%

In addition to launching the above new funds, Vanguard has reduced the management fee on two of its existing Canadian ETFs: the Vanguard FTSE Emerging Markets Index ETF (VEE) and Vanguard FTSE Developed ex North America Index ETF (CAD-hedged) (VEF). The management fee of VEE has been reduced to 0.33% from 0.49% while the fee on VEF has been cut to 0.28% from 0.37%.

Following these reductions, the average management fee across Vanguard’s Canadian ETF line-up is now just 0.21%.

The firm has also outlined plans to launch two new fixed income ETFs, the Vanguard US Aggregate Bond Index ETF and the Vanguard Global ex-US Aggregate Bond Index ETF, both hedged to the Canadian dollar. These funds are expected to make their debut in the very near future.

According to the latest ETP Landscape report from BlackRock, ETP assets in Canada total $58 billion, with the market dominated by iShares and BMO with 67.9% and 19.8% market shares respectively. Vanguard’s market share is 1.9%.

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