VGG or VGH???

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beachcomber
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VGG or VGH???

Post by beachcomber » 27 Aug 2017 14:57

Can someone explain the difference between these two Vanguard products?

And any recommendation as which would be the better buy at this time?

Thanks in advance.

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Peculiar_Investor
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Re: VGG or VGH???

Post by Peculiar_Investor » 29 Aug 2017 09:24

Welcome to FWF.
beachcomber wrote:
27 Aug 2017 14:57
Can someone explain the difference between these two Vanguard products?
From what I can tell based on a quick review, the difference between U.S. Dividend Appreciation Index ETF (VGG) and U.S. Dividend Appreciation Index ETF (CAD-hedged) (VGH) is currency hedging. From our wiki article about Currency hedging, the general consensus is that for long-term holdings it is not recommended to invest in currency hedged products because
  • over several decades, the currency fluctuations should even out;
  • hedging adds to costs; and
  • for Canadians, hedging may add to the volatility of portfolios.
And any recommendation as which would be the better buy at this time?
Based strictly on the above, VGG would be the better choice.

However, most FWF posters are willing to share their time and expertise with new posters who are looking for help, but they can't or won't give advice in a vacuum. We need to know some important things about you, including all the investments you already have. Otherwise, we may be advising you to buy into a fund that overlaps your present holding(s), doesn't fit your asset allocation plan, or, worse, is either too risky or too conservative for your investing temperament. To make sure you get the help you need, we would like to provide a few suggestions. You might want to review My Portfolio: Seeking Advice and give some thought to providing a bigger picture view of what you are trying to accomplish with your investment plan before getting down to the specifics of choice between two similar investment products.
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fireseeker
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Re: VGG or VGH???

Post by fireseeker » 29 Aug 2017 13:27

Peculiar_Investor wrote:
29 Aug 2017 09:24
[*]hedging adds to costs
Interesting that in this case both versions report an MER of 0.3%, so no apparent extra cost for the hedging.

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DavidR
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Re: VGG or VGH???

Post by DavidR » 29 Aug 2017 14:14

fireseeker wrote:
29 Aug 2017 13:27
Peculiar_Investor wrote:
29 Aug 2017 09:24
[*]hedging adds to costs
Interesting that in this case both versions report an MER of 0.3%, so no apparent extra cost for the hedging.
My understanding is that hedging costs are not included in MER. It's not a fee that the manager charges - it's a trading cost to buy FX contracts and roll them over, etc. Would probably show up in the Tracking error and/or TER.

beachcomber
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Re: VGG or VGH???

Post by beachcomber » 29 Aug 2017 17:54

Thanks for the advice Peculiar. I wasn't really asking for financial advice. Just a clarification of the two products and a confirmation of my own thoughts.

I am a geezer DIY investor who has been around the investment block several times - and have the scars to show for it. Cut my teeth on VSE penny mining stocks over 50 years ago. Got into mutual funds when Templeton, AIC and Altamira were household names and Gordon Pape was our guru. Posted on the Wealthy Boomer (I think that's what it was called) as Clumpy. And recall bylo introducing us to Jack B. and Vanguard products - which couldn't be purchased in Canada at that time.

About 20 years ago after a ferry trip to Long Harbour and a visit with Norbert - who kindly reviewed my portfolio and graciously told me it was disaster - I spent many years consolidating all my investments into cash (tds) and PH&N funds.

PH&N has been great - but I am slowly moving into index funds and etfs. I have never been an early innovator/adapter ;-)

Cheers and thanks again

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Peculiar_Investor
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Re: VGG or VGH???

Post by Peculiar_Investor » 29 Aug 2017 19:27

Thanks for more background to the question, it's very helpful. BTW, Bylo and Norbert are still around here, although they don't visit/post as often these days.
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adrian2
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Re: VGG or VGH???

Post by adrian2 » 29 Aug 2017 19:58

beachcomber wrote:
29 Aug 2017 17:54
Posted on the Wealthy Boomer (I think that's what it was called) as Clumpy. A
The name rings a bell. :)

I was the same adrian2 over there.
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