Vanguard ETFs begin trading in Canada

Photo credit: Jeff Hackett

How ironic that as criticism of high Canadian mutual fund fees focused on Investors Group the last week — see Do We Really Care About Fees? — Tuesday marked the first day of trading of the first six ETFs from Vanguard Canada on the TSX.

The six ETFs average fees of 0.24%, according to Vanguard Canada managing director Atul Tiwari, who briefed financial advisors at a session at the Royal York in Toronto Tuesday afternoon. That’s roughly eight times less than the MER of the average mutual fund sold in Canada, he said.

There are three ETFs providing exposure to the U.S., EAFE and Emerging Markets, plus three domestic ETFs built expressly for Canadian investors covering Canadian equities and fixed income. All six can be considered “core” ETFs for portfolio construction.

For now, there are no plans to provide Vanguard index mutual funds in Canada, Tiwari said. Distribution appears to be the challenge there.

Pictured is Charles Ellis, author of Winning the Loser’s Game, who addressed advisors with a talk similar to one he delivered to portfolio managers in November, reported in this blog here. In an interview, Ellis told me he’s personally invested mostly in Vanguard ETFs, except for a small position in Berkshire Hathaway. He also told the audience that going back a decade, he was mostly invested in Emerging Markets, a trade that worked out well until his wife said she wasn’t comfortable with the risk. He switched to large household name American blue chips and he remains happily married, he quipped.

For more details, see Vanguard Canada’s web site here.

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A financial literacy fable

Thursday’s Financial Post and subsequently on my Wealthy Boomer blog, a controversy arose over articles I’ve written about the financial industry’s true commitment to financial literacy, or what some call FinLit.

In the course of revisiting this topic, I linked back to a little “fable” I wrote about a year ago after the Investment Funds Institute of Canada (IFIC) announced what it was doing to “promote” financial literacy.

I was skeptical then, just as I’m currently skeptical about Investors Group’s wrapping itself in the FinLit flag even while its fees remain near the highest in the country that studies have shown have pretty much the highest MERs (Management Expense Ratios) in the world.

For those who missed it first time, here is the fable about FinLit Frank and his efforts to instill financial literacy in his daughter, MERry. Who knows, maybe Frank is an Investors Group executive?

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Talk for Credit Canada’s Credit Education Week

In addition to November being Financial Literacy Month, this week is also Credit Education Week. On Tuesday at the YMCA in Toronto, as part of the launch of Credit Education Week,  I gave the following talk which touched on all of credit, financial literacy, the sandwich generation and of course financial independence. All recipients at the talk received copies of Findependence Day courtesy of Capital One.

Here’s the text of the talk:

Laurie had asked me to talk today about the Sandwich Generation. I’ll do that and also talk about life cycle financial planning and the concepts behind “findependence” or financial independence.

Some of you may remember around the turn of the millennium, the National Post distributed four issues of a glossy magazine I helped create, called The Wealthy Boomer.

Well, it just so happens that the final issue featured a cover story on the Sandwich Generation.

We’d commissioned a nice if predictable cover that depicted a frazzled middle-aged baby boomer tearing out her hair as she attempted to grapple with the conflicting demands of an aging parent and screaming children.

I could relate to that at the time because in 2000, we had a nine-year old daughter, four parents and two busy careers. Today, however, daughter is 20 and away at college, and all four grandparents have passed away.

From Sandwiched to Empty Nester

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