Comments on: A Tour of ETFs: Vanguard Total World Stock ETF (VT) http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Should U.S. Estate Taxes Affect the Choice of Investments? http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-145171 Should U.S. Estate Taxes Affect the Choice of Investments? Tue, 29 Jul 2008 06:00:42 +0000 http://www.canadiancapitalist.com/?p=983#comment-145171 [...] response to an earlier post on Vanguard Total World Stock ETF (VT), reader Doug raised an interesting point — While Vanguard funds have rock-bottom fees, owning [...] [...] response to an earlier post on Vanguard Total World Stock ETF (VT), reader Doug raised an interesting point — While Vanguard funds have rock-bottom fees, owning [...]

]]> By: Should U.S. Estate Taxes Affect the Choice of Investments? http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-145172 Should U.S. Estate Taxes Affect the Choice of Investments? Tue, 29 Jul 2008 06:00:42 +0000 http://www.canadiancapitalist.com/?p=983#comment-145172 [...] response to an earlier post on Vanguard Total World Stock ETF (VT), reader Doug raised an interesting point — While Vanguard funds have rock-bottom fees, owning [...] [...] response to an earlier post on Vanguard Total World Stock ETF (VT), reader Doug raised an interesting point — While Vanguard funds have rock-bottom fees, owning [...]

]]> By: Doug http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-145018 Doug Mon, 28 Jul 2008 02:54:58 +0000 http://www.canadiancapitalist.com/?p=983#comment-145018 US estate tax is in a state of flux; it is possible that it may not exist after 2009. However, that is not guaranteed. If one uses the usual rules of thumb, worldwide assets of $1.2 million would result in an aftertax retirement income of $36,000. Some might consider that adequate. I am confident that twenty years from now, few would consider it adequate. My point is that for many (most?) people, US estate tax is relevant. The following is a link on the subject: http://www.bdo.ca/library/publications/tax/documents/USestatetax08-Masthead-Final.PDF US estate tax is in a state of flux; it is possible that it may not exist after 2009. However, that is not guaranteed.

If one uses the usual rules of thumb, worldwide assets of $1.2 million would result in an aftertax retirement income of $36,000. Some might consider that adequate. I am confident that twenty years from now, few would consider it adequate.

My point is that for many (most?) people, US estate tax is relevant. The following is a link on the subject: http://www.bdo.ca/library/publications/tax/documents/USestatetax08-Masthead-Final.PDF

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-145012 Canadian Capitalist Mon, 28 Jul 2008 01:40:05 +0000 http://www.canadiancapitalist.com/?p=983#comment-145012 Doug: The currency exchange cost of 1% when buying and 1% when selling is amortized over many years for a long-term investor. The MER savings from Vanguard funds (VEA is 0.12% compared to 0.5% for XIN) will make up for the currency conversion costs in a few years. I'm not an expert in this but my understanding is that the US estate tax does not apply to Canadians with less than$1.2 million in worldwide assets. I'm not worrying about a US estate tax just yet :) Doug: The currency exchange cost of 1% when buying and 1% when selling is amortized over many years for a long-term investor. The MER savings from Vanguard funds (VEA is 0.12% compared to 0.5% for XIN) will make up for the currency conversion costs in a few years.

I’m not an expert in this but my understanding is that the US estate tax does not apply to Canadians with less than$1.2 million in worldwide assets. I’m not worrying about a US estate tax just yet :)

]]> By: Doug http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-145009 Doug Mon, 28 Jul 2008 01:23:16 +0000 http://www.canadiancapitalist.com/?p=983#comment-145009 I worked in the USA, and have experience with Vanguard from my time there. Vanguard treats its investors well. When assets in a fund increase, the MER goes down. Yes, the VT MER is more expensive. However, as VT assets increase, I would be surprised if Vanguard didn't decrease the MER. I still own Vanguard mutual funds, and the witholding tax has not been a significant issue. However, I have two problems with Vanguard ETFs. Firstly, there are currency exchange costs associated with share purchase and dividend distribution. Any comments about those costs would be appreciated. Secondly, ownership of Vanguard ETFs or mutual funds will result in estate tax when one dies, unlike Canadian based mutual funds. Any comments about this would also be appreciated. It is unfortunate that we in Canada don't have financial products comparable to some of the Vanguard ETFs. I worked in the USA, and have experience with Vanguard from my time there. Vanguard treats its investors well. When assets in a fund increase, the MER goes down. Yes, the VT MER is more expensive. However, as VT assets increase, I would be surprised if Vanguard didn’t decrease the MER. I still own Vanguard mutual funds, and the witholding tax has not been a significant issue.

However, I have two problems with Vanguard ETFs. Firstly, there are currency exchange costs associated with share purchase and dividend distribution. Any comments about those costs would be appreciated. Secondly, ownership of Vanguard ETFs or mutual funds will result in estate tax when one dies, unlike Canadian based mutual funds. Any comments about this would also be appreciated.

It is unfortunate that we in Canada don’t have financial products comparable to some of the Vanguard ETFs.

]]> By: canadian etfs http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-141659 canadian etfs Thu, 10 Jul 2008 22:14:26 +0000 http://www.canadiancapitalist.com/?p=983#comment-141659 [...] Vanguard stable but its expense, lack of small-cap exposure and canadian stock content makes it ...http://www.canadiancapitalist.com/2008/06/29/a-tour-of-etfs-vanguard-total-world-stock-etf-vtChartwell Global ETF Report: New Canadian ETF Digs Tar SandsETF Investment News Blog by Carl Delfeld [...] [...] Vanguard stable but its expense, lack of small-cap exposure and canadian stock content makes it …http://www.canadiancapitalist.com/2008/06/29/a-tour-of-etfs-vanguard-total-world-stock-etf-vtChartwell Global ETF Report: New Canadian ETF Digs Tar SandsETF Investment News Blog by Carl Delfeld [...]

]]> By: Saturday LinkStuff http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-140528 Saturday LinkStuff Sat, 05 Jul 2008 09:02:47 +0000 http://www.canadiancapitalist.com/?p=983#comment-140528 [...] Capitalist talks about one of my favourite subjects - ETFs!! Vanguard has a new all-world ETF and he talks about why it’s not so [...] [...] Capitalist talks about one of my favourite subjects – ETFs!! Vanguard has a new all-world ETF and he talks about why it’s not so [...]

]]> By: A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-140389 A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com Fri, 04 Jul 2008 02:20:32 +0000 http://www.canadiancapitalist.com/?p=983#comment-140389 [...] The Canadian Capitalist continues his tour of ETFs, looking at Vanguard’s Total World Stock ETF. [...] [...] The Canadian Capitalist continues his tour of ETFs, looking at Vanguard’s Total World Stock ETF. [...]

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-140136 Canadian Capitalist Wed, 02 Jul 2008 14:17:34 +0000 http://www.canadiancapitalist.com/?p=983#comment-140136 Cash Instinct: If there is RRSP room, for most people in the middle or top tax brackets, even Canadian equities should be held in a RRSP account. I am unable to find the original article but here is a blog post on that topic: http://www.investingintelligently.com/2006/03/26/investing-inside-an-rrsp-vs-outside-an-rrsp/ Cash Instinct: If there is RRSP room, for most people in the middle or top tax brackets, even Canadian equities should be held in a RRSP account. I am unable to find the original article but here is a blog post on that topic:

http://www.investingintelligently.com/2006/03/26/investing-inside-an-rrsp-vs-outside-an-rrsp/

]]> By: Cash Instinct http://www.canadiancapitalist.com/a-tour-of-etfs-vanguard-total-world-stock-etf-vt/#comment-140126 Cash Instinct Wed, 02 Jul 2008 08:01:03 +0000 http://www.canadiancapitalist.com/?p=983#comment-140126 By choosing to have equities in RRSP, it means to pay future marginal rate on a capital gain, instead of paying 0,5 * future marginal rate, right? It would seem to be as a good reason to keep equities out of RRSP whether possible (depending on RRSP room, size of portfolio, % of non-canadian equities, etc.). I agree that, between Canadian and Non-Canadian equities, Canadian stocks should be outside RRSP (to get dividend tax credit). By choosing to have equities in RRSP, it means to pay future marginal rate on a capital gain, instead of paying 0,5 * future marginal rate, right?

It would seem to be as a good reason to keep equities out of RRSP whether possible (depending on RRSP room, size of portfolio, % of non-canadian equities, etc.).

I agree that, between Canadian and Non-Canadian equities, Canadian stocks should be outside RRSP (to get dividend tax credit).

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