Vanguard to launch six ETFs in Canada

[larry81]

U.S. investment fund goliath Vanguard Group Inc. has filed a preliminary prospectus to launch six exchange-traded funds (ETFs) in Canada.

The stock ETFs include Vanguard MSCI Canada and the Vanguard MSCI Emerging Markets, as well as the Vanguard MSCI U.S. Broad Market and Vanguard MSCI EAFE, which will both be hedged to Canadian dollars. The bond category includes Vanguard Canadian Aggregate Bond and Vanguard Canadian Short-Term Bond ETFs.

http://www.theglobeandmail.com/globe...ontent=2138650

[andrewf]

Boo to hedging. We need those ETFs without the hedging. The estate tax consideration is a big enough concern to justify holding a Canadian-domiciled ETF that is a straight wrapper for the US version of the fund.

[leoc2]

Boo to hedging. We need those ETFs without the hedging. The estate tax consideration is a big enough concern to justify holding a Canadian-domiciled ETF that is a straight wrapper for the US version of the fund.

Andrew please explain.

[larry81]

Boo to hedging.

same feeling here !

[CanadianCapitalist]

I agree that unhedged foreign stock ETFs would have been nice especially if they held stocks directly (and not simply a wrapper around US ETFs such as VTI or VEA).

On my wishlist was cheaper REIT and dividend ETFs. Alas, they are not in the lineup at this time.

[CanadianCapitalist]

Andrew please explain.

If you as a Canadian resident holds US assets including US stocks, US ETFs etc. you may be liable to pay US Estate Taxes even if you not a US citizen or resident.

http://www.canadiancapitalist.com/sh...f-investments/

[andrewf]

I agree that unhedged foreign stock ETFs would have been nice especially if they held stocks directly (and not simply a wrapper around US ETFs such as VTI or VEA).

On my wishlist was cheaper REIT and dividend ETFs. Alas, they are not in the lineup at this time.

I think you had better keep dreaming. Given the number of holdings, I just don't see it being economic to buy them all directly rather than through the US fund. Any savings from avoiding the MER on the US fund would likely be eaten up in the trading and admin costs.

Using the US fund allows the liquidity benefit to be largely passed through. Market-makers ought to be willing to provide small spreads.

Agreed on cheaper REIT and dividend ETFs. The REIT space is the most egregious example.

[rajaijah]

If you as a Canadian resident holds US assets including US stocks, US ETFs etc. you may be liable to pay US Estate Taxes even if you not a US citizen or resident.

http://www.canadiancapitalist.com/sh...f-investments/

I read the http://www.bdo.ca/library/publicatio...head-Final.PDF.

so if someone invest in US stocks (in rrsp or non-reg accounts), there will be estate tax upon death if the person does not convert them to cash (sale) and transfer to canada before death?

How about roth ira and iras? I left the US last year and settled in Canada. But still have my roth ira and reg-IRA. Is it better to transfer them now (and take the 10% or so early withdrawal hit +tax on IRA)?

Please do explain or please direct to other info source.

Thanks.

[bloschuk]

Boo to hedging. We need those ETFs without the hedging. The estate tax consideration is a big enough concern to justify holding a Canadian-domiciled ETF that is a straight wrapper for the US version of the fund.

estate tax consideration not a big enough concern if you add in that they're hedging though? are the big concerns with hedging the tracking error and higher mer because of more work to do to hedge?

[andrewf]

You can avoid the hedging by buying the US domiciled ETFs that track the same index, but then you're exposed to estate tax in the event of your death.