Archive for June, 2008

A Tour of ETFs: Vanguard Total World Stock ETF (VT)

June 29, 2008


Vanguard recently introduced a ETF to capture exposure to the world’s major equity markets weighted by their market capitalization. The ETF, which started trading last week on the NYSE Arca exchange under the ticker symbol VT, charges a MER of 0.25%. While the ETF is an interesting addition to the Vanguard stable, it is hard to get excited about it for the following reasons:

  1. VT is more expensive: Canadian investors can get exposure to the entire world through a combination of VTI, VEA and VWO for a composite MER of 0.12% or so. At 0.25%, VT is almost twice as expensive.
  2. VT has no exposure to small caps: The Vanguard Total Stock Market Index Fund has about 20% weighting in small cap equities giving Canadian investors a 8% weighting in small caps in their foreign allocation. VT is almost solely invested in large-cap and mid-cap stocks.
  3. Like VEU, VT includes Canadian equities: Canadian investors would want to allocate more to our local market than the roughly 3% weighting in VT and this fund faces all the same issues that make VEU unattractive for Canadian residents.

You may also want to check out other posts on this topic by Four Pillars.

Regular programming will resume on July 2nd. Happy Canada Day everyone!

Introducing the Personal Finance Network!

June 29, 2008


The Personal Finance Network is a group of six blogs – three Canadian, two American and one ex-pat Canadian – formed as a forum to exchange ideas. The other members of the group are:

  1. Blunt Money lives in South western U.S. and is currently working on saving & learning about investing, building her small businesses. Her posts focus on saving, frugal ideas and debt reduction.
  2. Clever Dude is married, just-shy of thirty, lives in the Washington D.C. area and writes about family, marriage, finances and life.
  3. MoneyNing is the ex-pat Canadian who currently resides in Southern California and writes a blog focussed on saving money, investing, early retirement, mortgages and stocks.
  4. Quest for Four Pillars doesn’t need any introduction. Mike and Mr. Cheap write about finances, parenting and real estate investing.
  5. Squawkfox doesn’t need any introduction either. She writes from BC and promises to make personal finance and frugal living sexy, delicious and fun.

We’ll be doing weekly roundups and group projects and there are no changes to our regular program schedule.

This and That

June 26, 2008

  1. Peter Bernstein writes in the New York Times that our assumptions about the future may be wrong and risk management should be a process of dealing with the consequences of being wrong.
  2. Jon Chevreau reports that a million dollars ain’t what it used to be. There are now 1.1 million Canadian families with a net worth of $1 million or more.
  3. Larry MacDonald discussed how real estate agents don’t have an incentive to get the best price for the home owner. Michael James agreed with Larry’s ideas on improving the incentives for Realtors.
  4. Ellen Roseman talked about Dividend Reinvestment Plans (DRIPs) as a cheap way to invest for the long term.
  5. As stock markets are in free-fall mode once again, Preet reminds us how important it is to stay the course.
  6. Thanks to Canadian Financial Stuff for pointing out that Ontario residents can renew their license plate validation stickers online.
  7. Million Dollar Journey’s shares his top ten ways to save money in University.
  8. If a stock you held cut its dividend, what do you do? Some suggestions from the Dividend Guy.
  9. Thicken My Wallet on how to survive a bad economy.
  10. Canadian Dream upbraids Million Dollar Journey for being a workaholic.

Have a great weekend everyone!