Comments on: Reader Question: How to Buy Vanguard ETFs? http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Bal http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-819176 Bal Fri, 12 Aug 2011 04:20:22 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-819176 Hello, I am not an avid investor by any means. I have some investments through a financial advisor, but am unsure if I`m doing the right thing with my money. I want to keep as much of my money as I can from fees going to commissions. Every investor I go to, gives me a different answer and I`ve come to the conclusion, all of them are just after the commission and have no idea what they`re talking about. Hello, I am not an avid investor by any means. I have some investments through a financial advisor, but am unsure if I`m doing the right thing with my money. I want to keep as much of my money as I can from fees going to commissions. Every investor I go to, gives me a different answer and I`ve come to the conclusion, all of them are just after the commission and have no idea what they`re talking about.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-442974 Canadian Capitalist Thu, 10 Mar 2011 13:27:37 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-442974 @J. Gionet: If you have an allocation for emerging markets in your portfolio, the valuations appear fair here -- neither very cheap, nor very expensive. p/e right now is 14.5, which is actually higher than many developed markets but it is not entirely out of line either. My personal exposure to emerging markets is through VWO. @J. Gionet: If you have an allocation for emerging markets in your portfolio, the valuations appear fair here — neither very cheap, nor very expensive. p/e right now is 14.5, which is actually higher than many developed markets but it is not entirely out of line either.

My personal exposure to emerging markets is through VWO.

]]> By: J. Gionet http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-441737 J. Gionet Wed, 09 Mar 2011 03:46:33 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-441737 I have the same question as Adrian from March 6, is VWO or any Vanguard fund a good buy at the moment - as Adrian, I am holding for the long term I have the same question as Adrian from March 6, is VWO or any Vanguard fund a good buy at the moment – as Adrian, I am holding for the long term

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-439648 Canadian Capitalist Mon, 07 Mar 2011 03:20:40 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-439648 @Adrian: VWO owns stocks in emerging markets that are denominated in their local currency. Therefore, a Canadian investor in VWO is affected not by CAD/USD fluctuations but by CAD/emerging market currencies. I have written a detailed explanation of it here: http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/ @Adrian: VWO owns stocks in emerging markets that are denominated in their local currency. Therefore, a Canadian investor in VWO is affected not by CAD/USD fluctuations but by CAD/emerging market currencies. I have written a detailed explanation of it here:

http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/

]]> By: Adrian http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-439138 Adrian Sun, 06 Mar 2011 17:10:44 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-439138 Do you thing VWO (Vanguard Emerging Markets) is a good buy right now considering the price and the US$ and CAN$ being par. I am planning to hold to long-term (over 10 years). Other than the $30 commission fee I have to pay through my self directed investing account, any other fees do I need to consider; are there currency conversion fees? Do you thing VWO (Vanguard Emerging Markets) is a good buy right now considering the price and the US$ and CAN$ being par. I am planning to hold to long-term (over 10 years). Other than the $30 commission fee I have to pay through my self directed investing account, any other fees do I need to consider; are there currency conversion fees?

]]> By: Arthur C Perron http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-210943 Arthur C Perron Sun, 14 Feb 2010 00:17:17 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-210943 I wish to buy the Vanguard ETF "VWO"...through my Self Investing Facility with a major bank. As I am in Canada, would this transaction require me to purchase the ETF in $ USA ? ......and if I proceeded to purchased the ETFs would my Cdn $ be hedged to avoid a foreign Exchange loss when I eventually sold my ETFs ? ..... Thanks in advance for your advice Art I wish to buy the Vanguard ETF “VWO”…through my Self Investing Facility with a major bank.

As I am in Canada, would this transaction require me to purchase the ETF in $ USA ? ……and if I proceeded to purchased the ETFs would my Cdn $ be hedged to avoid a foreign Exchange loss when I eventually sold my ETFs ? …..

Thanks in advance for your advice

Art

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-90811 Canadian Capitalist Sun, 09 Dec 2007 13:31:10 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-90811 Ryan: I haven't run into this problem yet because initially most of your portfolio growth will come from contributions and you can simply rebalance when contributing. Also, if you have an account with a broker that offers wash trades, you pay for the currency conversion only if you switch between currencies. For example, selling XIC to buy VTI or vice-versa. I prefer VTI over XSP because I can a one-ETF exposure to the entire US market (including small-caps) and I don't think that over the long run investors need currency hedging. Ryan: I haven’t run into this problem yet because initially most of your portfolio growth will come from contributions and you can simply rebalance when contributing.

Also, if you have an account with a broker that offers wash trades, you pay for the currency conversion only if you switch between currencies. For example, selling XIC to buy VTI or vice-versa.

I prefer VTI over XSP because I can a one-ETF exposure to the entire US market (including small-caps) and I don’t think that over the long run investors need currency hedging.

]]> By: Ryan http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-90326 Ryan Sat, 08 Dec 2007 01:54:28 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-90326 Oh, sorry, I meant to say that this rebalancing cost occurs when you are holding your portfolio inside an RRSP. RRSPs hold Canadian currency only, so as you buy and sell you are switching in and out of Canadian currency. If your portfolio is outside an RRSP then you only pay the one fee up front to convert your money to US funds. Oh, sorry, I meant to say that this rebalancing cost occurs when you are holding your portfolio inside an RRSP. RRSPs hold Canadian currency only, so as you buy and sell you are switching in and out of Canadian currency. If your portfolio is outside an RRSP then you only pay the one fee up front to convert your money to US funds.

]]> By: Ryan http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-90323 Ryan Sat, 08 Dec 2007 01:19:47 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-90323 When buying US ETFs for a long term portfolio you are presumably also going to be rebalancing it. At 1% to sell and 1% to buy, this is an additional 2%. If you're rebalancing 10% of your portfolio per year, this is like adding .2% to your MERs. So is it really cheaper to buy US ETFs? In terms of selection you are kind of stuck if you only want to buy Canadian. However, have you looked at the long term correlation between the S&P500 (XSP) and the total US market (VTI)? It's practically identical. When buying US ETFs for a long term portfolio you are presumably also going to be rebalancing it. At 1% to sell and 1% to buy, this is an additional 2%. If you’re rebalancing 10% of your portfolio per year, this is like adding .2% to your MERs. So is it really cheaper to buy US ETFs?

In terms of selection you are kind of stuck if you only want to buy Canadian. However, have you looked at the long term correlation between the S&P500 (XSP) and the total US market (VTI)? It’s practically identical.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-how-to-buy-vanguard-etfs/#comment-65433 Canadian Capitalist Thu, 06 Sep 2007 02:55:52 +0000 http://www.canadiancapitalist.com/2007/08/13/reader-question-how-to-buy-vanguard-etfs#comment-65433 Earl: When I buy VTI, I plan to hold it for a long time (20 years or more). Yes, I incur a currency conversion charge of 1% when initially buying VTI. But, even if VTI never increased in value, you can break even after roughly six years by choosing VTI over XSP. Since XSP is mostly in large-caps, you would likely want small-cap exposure through another ETF, which you need to buy. With VTI, in a single ETF, you have exposure to the entire US market, including small-caps. Earl: When I buy VTI, I plan to hold it for a long time (20 years or more). Yes, I incur a currency conversion charge of 1% when initially buying VTI. But, even if VTI never increased in value, you can break even after roughly six years by choosing VTI over XSP. Since XSP is mostly in large-caps, you would likely want small-cap exposure through another ETF, which you need to buy. With VTI, in a single ETF, you have exposure to the entire US market, including small-caps.

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