The following question is from reader Joe:
How do we open a Vanguard Account? I went to their website and it seems it is only for US residents.
Unfortunately, it used to be extremely difficult for a Canadian resident to open an account with Vanguard to take advantage of their popular index mutual funds. With the tightening of regulations following the tragic events of 9/11, it is probably an impossible task now.
Canadian investors interested in index mutual funds are left with two good options: the TD e-Series funds (for smaller accounts) or the CIBC Index funds (for larger accounts due to their management fee discount). While their MERs are typically higher than Vanguard’s, they are still reasonable and on the bright side, you won’t take a currency-conversion hit when investing with Canadian dollars.
If you have a brokerage account, you have a much wider range of options. Many of Vanguard’s index funds have a corresponding exchange-traded fund (ETF), which are listed and traded on U.S. stock exchanges. The Vanguard Total Stock Market ETF, for instance, is listed on the AMEX exchange under ticker symbol VTI. If you have an online broker, investing in the ETF is as simple as entering the ticker symbol and clicking the buy button. Moreover, Vanguard isn’t the only provider of ETFs. Barclay’s offers many popular ETFs through iShares in both Canada (traded on the TSX) and the U.S.
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7 responses so far ↓
1 Mike // May 1, 2007 at 8:52 pm
Altimira has a Precision series of index funds which Carrick has mentioned before. Looking on globefund, the mers are just a shade higher than the TD e-funds.
2 jml // May 1, 2007 at 9:17 pm
The only problem I find is that not all Canadian discount online brokerages offer access to the American Stock Exchange (AMEX)
TD Waterhouse lets you buy AMEX securities, but my account at Credential Direct does not.
3 dan // May 1, 2007 at 9:37 pm
JML: Look again regarding buying AMEX securities thru Credential Direct. I have an account with them, and I have no problem getting a price quote or putting in a buy order.
4 FinancialJungle.com // May 1, 2007 at 9:44 pm
I understand that iShares CDN S&P 500 Index Fund (XSP) is currency hedged. Do you know if the CIBC Index funds have currency hedging as well?
I’m guessing TD has both: US Index Fund (mer=0.33%) and US RSP Index Fund(mer=0.48%).
http://www.tdcanadatrust.com/mutualfunds/tdeseriesfunds/mer_diff.jsp
5 jml // May 1, 2007 at 11:36 pm
dan: Woops, you are correct! For some reason I must have goofed something up when I was looking for AMX ETF’s a while back.
6 Jon D. // May 2, 2007 at 12:33 pm
http://www.altamira.com/altamira_en/funds/fees/mer+schedule.htm
Here’s the link to the MER schedule for Altamira funds.
7 Canadian Capitalist // May 2, 2007 at 5:52 pm
FYI: Here’s a list of no-load, low MER index mutual funds available in Canada.
Link
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