Vanguard Canada ETF changes

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Bylo Selhi
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Re: Vanguard Canada ETF changes

Post by Bylo Selhi »

Thanks guys. No regrets here either. Just checking to see if I missed anything.
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Re: Vanguard Canada ETF changes

Post by IdOp »

I have a large (for me) VEA holding with significant capital gains. One alternative is of course to do nothing, which I'll do at least in the short term. Beyond that, if I decide to do something, I'll probably sell the equivalent of 8%xVEA of Canadian equity somewhere and buy the equivalent of international exposure. Added complexity, but less cap gain tax.
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Re: Vanguard Canada ETF changes

Post by snowback96 »

If your VEA and/or VWO is in a taxable account with a large CG, just do nothing. It would be very difficult to make up the tax costs through efficiency even over a very long period. The only reason I am considering making a change is that my VEA/VWO is in a registered account.
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Re: Vanguard Canada ETF changes

Post by queerasmoi »

I was just passively monitoring this thread until I saw the part about adding Canada to VEA.

Dafuq???

This truly is puzzling, that an ETF which even put E & A in its name to signify EAFE exposure, is now randomly going to throw Canada into the mix. And yeah it's a big FU to Canadians who want efficient investments.

My international exposure used to be in VEA, and then I shifted out to Pax World's socially-screened EAPS. Pax screwed me over by randomly converting into an American mutual fund without providing me sufficient warning to cash out while I still could, and then it took over a month to recover my money. At this point I was quite ready to return to VEA when IEFA came to my attention and ended up taking that slot instead. I'm glad now that I'd made that choice.
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Bylo Selhi
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Re: Vanguard Canada ETF changes

Post by Bylo Selhi »

queerasmoi wrote:I was just passively monitoring this thread until I saw the part about adding Canada to VEA.

Dafuq???

This truly is puzzling, that an ETF which even put E & A in its name to signify EAFE exposure, is now randomly going to throw Canada into the mix. And yeah it's a big FU to Canadians who want efficient investments.
VEA is a US-based funds that's intended primarily to US-based investors. Presumably they want this to complement their US holdings in SPY, VTI, etc. Bogleheads used to complain that Vanguard provided them with no Canadian exposure(*). So Vanguard listened and acted in the interests of their investors in the US (and incidentally anywhere else but Canada.)

I don't think you can blame Vanguard that this move isn't appropriate for investors in Canada. Their CA-based ETFs are another matter.


(*) the volume of complaints correlated with the performance of the TSX, but that's another story... ;)
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Re: Vanguard Canada ETF changes

Post by gsp_ »

AltaRed wrote:I can only hope iShares will feel some heat from a close competitor VXC and reduce their MER. C'est la vie. No regrets.
Unfortunately that's all those of us in large CG positions can do. Seems highly unlikely in Ishares' case since their MO has been to maintain the status quo on the large assets fund and just create a new fund to compete. XAW in your example.


Mildly annoyed by these VG US changes but plan to do a whole lot of nothing about it.
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Re: Vanguard Canada ETF changes

Post by queerasmoi »

Bylo Selhi wrote: VEA is a US-based funds that's intended primarily to US-based investors. Presumably they want this to complement their US holdings in SPY, VTI, etc. Bogleheads used to complain that Vanguard provided them with no Canadian exposure(*). So Vanguard listened and acted in the interests of their investors in the US (and incidentally anywhere else but Canada.)
Still, they have so many funds that they easily could have applied this change to some other appropriate fund. It just doesn't make sense from a continuity perspective that a fund which started out as EAFE ends up including Canada.
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Re: Vanguard Canada ETF changes

Post by Peculiar_Investor »

Vanguard has announced further news on the transition of two ETFs, VDU and VEF, to new benchmarks effective today. Two Vanguard Developed Markets ETFs Transition To New FTSE Indexes
Vanguard Canada wrote:Vanguard Investments Canada Inc., announced that the TSX-listed Vanguard FTSE Developed All Cap ex North America Index ETF (TSX: VDU) and Vanguard FTSE Developed All Cap ex North America Index ETF (CAD-hedged) (TSX: VEF), will begin tracking new FTSE transition indexes as part of a two-phase change to new target indexes. The changes will be effective with the opening of trading on December 21, 2015.

The ETFs will be renamed, but their ticker symbols and management fees will remain unchanged.
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Re: Vanguard Canada ETF changes

Post by Insomniac »

I have VDU in my portfolio. Yesterday, I checked my account and found that the ticker for VDU was gone. So I asked the broker if there was a problem with their system and this is the reply:
Since VDU is going through a name change, please allow upto 10 business days for Qtrade to receive the new shares and credit your account. If you would like to sell the shares in the meantime, please call the toll free number provided below and one of our traders can help you to do so.
Seems odd to me that a name change means issuing new shares. I guess I don't understand the interaction between the broker, the TSX and Vanguard. :?
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Re: Vanguard Canada ETF changes

Post by IdOp »

Just a bit of a heads up, the Vanguard Canada ETF distributions for March are going to be paid a bit earlier than has been usual:

Record date March 17, payable March 24
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Re: Vanguard Canada ETF changes

Post by Insomniac »

IdOp wrote:Just a bit of a heads up, the Vanguard Canada ETF distributions for March are going to be paid a bit earlier than has been usual:

Record date March 17, payable March 24
Thanks! I wonder ...
Why they are paying them early?
Why is VFV not included?
Why is it reported in the G&M, but no mention of it on Vanguard's own website? They have a press release section.
:?

Of course, answers to these questions are not necessary as they are unlikely to cause me to change my investments in Vanguard ETFs! :|
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Re: Vanguard Canada ETF changes

Post by crimsondr »

Hi all,

A bit slow to the party. Was going to rebalance my portfolio for the year when I discovered this. Currenctly have VTI, VEA, VWO as my ex-Canada exposure.

So what's the general consensus on dealing with the changes to VEA?

1. Decrease my Canadian exposure from other sources?
2. Switch VEA/VWO to VXUS?
3. Switch VEA to combination of VGK/VPL? In this scenario what would be the correct ratio of VGK/VPL to match as closely as possible the original VEA?

Thanks.
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Re: Vanguard Canada ETF changes

Post by ockham »

crimsondr wrote:Hi all,

A bit slow to the party. Was going to rebalance my portfolio for the year when I discovered this. Currenctly have VTI, VEA, VWO as my ex-Canada exposure.

So what's the general consensus on dealing with the changes to VEA?

1. Decrease my Canadian exposure from other sources?
2. Switch VEA/VWO to VXUS?
3. Switch VEA to combination of VGK/VPL? In this scenario what would be the correct ratio of VGK/VPL to match as closely as possible the original VEA?

Thanks.
There are further options. A fourth is "Do nothing, the change isn't sufficiently material". A fifth is "Don't bother changing what you already have, but going forward, buy VXC" (VXC being Vanguard Canada's all-world ex Canada ETF).

As to your option 2, it doesn't address the Cdn exposure problem. The Cdn exposure in VXUS is the same as the Cdn exposure in VEA+VWO.

As to option 3, the Vanguard US website will give you VEA's regional exposures. That will give you the info you need to create your desired VGK/VPL split.

The right option will depend heavily on individual circumstance, particularly on the question of the type of account in which the ETFs are held. For example, I too hold VTI+VEA+VWO, but in a taxable account. Switching VEA would create an unwanted cap gain for me. So that's not part of a reasonable solution for me. YMMV.
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Re: Vanguard Canada ETF changes

Post by AltaRed »

ockham wrote:The right option will depend heavily on individual circumstance, particularly on the question of the type of account in which the ETFs are held. For example, I too hold VTI+VEA+VWO, but in a taxable account. Switching VEA would create an unwanted cap gain for me. So that's not part of a reasonable solution for me. YMMV.
That is an issue for a lot of folk. I have a legacy holding of XWD from the 08/09 crisis for example. I'd never do that today but there is way too much cap gain there to even consider a change. As the ETF market continues to evolve (for good or for bad), some of today's decisions may become less than optimal a few more years in the future. Don't sweat the small stuff.
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Re: Vanguard Canada ETF changes

Post by crimsondr »

ockham wrote:
crimsondr wrote:Hi all,

A bit slow to the party. Was going to rebalance my portfolio for the year when I discovered this. Currenctly have VTI, VEA, VWO as my ex-Canada exposure.

So what's the general consensus on dealing with the changes to VEA?

1. Decrease my Canadian exposure from other sources?
2. Switch VEA/VWO to VXUS?
3. Switch VEA to combination of VGK/VPL? In this scenario what would be the correct ratio of VGK/VPL to match as closely as possible the original VEA?

Thanks.
There are further options. A fourth is "Do nothing, the change isn't sufficiently material". A fifth is "Don't bother changing what you already have, but going forward, buy VXC" (VXC being Vanguard Canada's all-world ex Canada ETF).

As to your option 2, it doesn't address the Cdn exposure problem. The Cdn exposure in VXUS is the same as the Cdn exposure in VEA+VWO.

As to option 3, the Vanguard US website will give you VEA's regional exposures. That will give you the info you need to create your desired VGK/VPL split.

The right option will depend heavily on individual circumstance, particularly on the question of the type of account in which the ETFs are held. For example, I too hold VTI+VEA+VWO, but in a taxable account. Switching VEA would create an unwanted cap gain for me. So that's not part of a reasonable solution for me. YMMV.
Thanks for your input. I won't actually be selling. To balance I will be purchasing more in the correct allocation to balance things out. I will probably choose options 1 or 3. Your option 4 really isn't a big deal since my spreadsheet can easily account for the difference with a few changes to the numbers. As for VXC, I am not too fond of it because of the lost withholding tax.
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Re: Vanguard Canada ETF changes

Post by gsp_ »

crimsondr wrote:Hi all,

A bit slow to the party. Was going to rebalance my portfolio for the year when I discovered this. Currenctly have VTI, VEA, VWO as my ex-Canada exposure.

So what's the general consensus on dealing with the changes to VEA?

1. Decrease my Canadian exposure from other sources?
2. Switch VEA/VWO to VXUS?
3. Switch VEA to combination of VGK/VPL? In this scenario what would be the correct ratio of VGK/VPL to match as closely as possible the original VEA?

Thanks.
Perhaps blasphemy in a VG thread but here goes anyway:

4. Buy IEFA and IEMG going forward. Gets rid of the "Canada in EAFE" problem and has the added benefit of generating fresh ACBs.
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Re: Vanguard Canada ETF changes

Post by IdOp »

Insomniac wrote:I wonder ...
Why they are paying them early?
Logging in to TDDI today I saw my Vanguard US ETFs had paid distributions today, also earlier than usual and a surprise to me. So I'll speculate:

a) Vanguard US paid distributions early ... reasons unknown [recycle Insomniac's question above].
b) Vanguard Canada ETFs holding the US ones as a wrap paid early too, perhaps to avoid cash drag.
c) Other Vanguard Canada ETFs also paid early to have consistent record & payment dates?
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Re: Vanguard Canada ETF changes

Post by longinvest »

If anyone is into factor investing, Vanguard Canada has filed a preliminary prospectus for four Factor ETFs (according to Sedar):
  • Vanguard Global Liquidity Factor ETF
  • Vanguard Global Minimum Volatility ETF
  • Vanguard Global Momentum Factor ETF
  • Vanguard Global Value Factor ETF
The management fee has been set to 0.35% for the four ETFs.
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Re: Vanguard Canada ETF changes

Post by IdOp »

Vanguard Canada's ETF distributions for June will be "early" again; record date June 16, payment date June 23:

Vanguard Canada Announces Cash Distributions

If March, June, September, December is the new pattern for this, then I suppose they will have to stop being considered early sometime.

A quick check on the Vanguard US website didn't show those ETFs' June distributions yet.
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Re: Vanguard Canada ETF changes

Post by DenisD »

https://www.vanguardcanada.ca/documents ... launch.pdf
VANGUARD INTRODUCES FOUR LOW COST AND ACTIVELY MANAGED ETFS
• New single factor ETFs offer global diversification, disciplined investment process and low cost
• New global ETFs are Vanguard’s first actively managed offering in Canada
• Each ETF offers a management fee of 0.35%

...

Vanguard Global Minimum Volatility ETF – The Vanguard Global Minimum Volatility ETF seeks to provide long-term capital appreciation with reduced volatility compared to the global equity market, by investing in equity securities from developed and emerging markets across the world.

Vanguard Global Value Factor ETF – The Vanguard Global Value Factor ETF seeks to provide long-term capital appreciation by aiming to capture potential excess return by investing in equity securities from developed markets across the world, which have low prices relative to fundamentals.

Vanguard Global Momentum Factor ETF – The Vanguard Global Momentum Factor ETF seeks to provide long-term capital appreciation by aiming to capture potential excess return by investing in equity securities from developed markets across the world which have achieved strong recent performance.

Vanguard Global Liquidity Factor ETF – The Vanguard Global Liquidity Factor ETF seeks to provide long-term capital appreciation by aiming to capture potential excess return by investing in less liquid equity securities from developed markets across the world.
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Re: Vanguard Canada ETF changes

Post by AltaRed »

Good lord.... more proliferation. Continued destruction of the ETF concept. :roll:
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Re: Vanguard Canada ETF changes

Post by Chuck »

AltaRed wrote:Good lord.... more proliferation. Continued destruction of the ETF concept. :roll:
Indeed. First actively managed offerings in Canada. TBH, I did not even realize Vanguard was in the actively managed arena at all (Canada or otherwise). I find myself somewhat disappointed to learn they are.

Poor old John Bogle must be shaking his cane at the current generation of Vanguard marketing folks.
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Re: Vanguard Canada ETF changes

Post by DenisD »

I don't see what all the fuss is about. :wink: Vanguard has had "actively managed" ETFs for years: value, growth, high yield, dividend appreciation, etc.

The interesting thing is that I can't find these funds on the US Vanguard site. Maybe Canadians will be the first to test out these new products?
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Re: Vanguard Canada ETF changes

Post by Spudd »

DenisD wrote:I don't see what all the fuss is about. :wink: Vanguard has had "actively managed" ETFs for years: value, growth, high yield, dividend appreciation, etc.

The interesting thing is that I can't find these funds on the US Vanguard site. Maybe Canadians will be the first to test out these new products?
I think in the US they are mutual funds. Example:
https://personal.vanguard.com/us/funds/ ... IntExt=INT
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Re: Vanguard Canada ETF changes

Post by couponstrip »

For those wanting to simplify their portfolio from VEA + VWO to VXUS, or switch VEA to VPL/VGK due to Canada contamination, it looks like brexit may provide just such an opportunity without the CG tax concern. Check your ACB on VEA vs current market price. It may bring tears to your eyes, but some folks might even be in a position to book a capital loss. :o
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