# FYI: Vanguard Lowers Fees On Six ETFs



## larry81 (Nov 22, 2010)

Good news for everyone using Vanguard ETF like VWO !

http://www.benzinga.com/etfs/new-etfs/11/02/887363/vanguard-lowers-fees-on-six-etfs

Anyone remember the last time any big active management firms like Fidelity lowered their MER ?


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## slacker (Mar 8, 2010)

I <3 Vanguard.


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## andrewf (Mar 1, 2010)

As a holder of VEU I am pleased! I wish we'd see some fee pressure in Canada. Bond funds especially have fees that are far too high. 

The bright side is that economies of scale really apply in ETFs. The cost of running an ETF doesn't increase proportionally to assets under management, so hopefully as the large flow of assets into ETFs and out of MFs continues, MERs will fall significantly more.

I want a bond fund with a MER around 10 bpp! Given the institution's better bid/ask spreads, that would likely be cheaper than DIY bond portfolios.


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## Jungle (Feb 17, 2010)

WOW great news! Can't wait to switch from e-series to Vanguard. 

Andrew any reason why you went with VEU? I kind of like that it has all the europe, emerging market and pacific all in one fund. So you pay one commission fee.


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## Belguy (May 24, 2010)

Gotta love those low fees!!

How many of these products has your financial advisor recommended to you?

None? Gee, what a shock!!!

Vanguard ETF's should be at or near the top of every index shopper's potential buying list.

Buy, HOLD, rebalance, and prosper!!!

Low fees really, really matter and Vanguard have some of the lowest fees in the business.

These are excellent core holdings for your portfolio!!!


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## larry81 (Nov 22, 2010)

I am proud to say that my weighted-mer is near 0.20% 

Sure it could be lower but who want to trade a couple basis points to derivative-based ETF like HXT ? I pass !


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## 14dmoney (Jan 20, 2011)

larry81 said:


> I am proud to say that my weighted-mer is near 0.20%
> 
> Sure it could be lower but who want to trade a couple basis points to derivative-based ETF like HXT ? I pass !


Hi Larry,
From someone whose weighted MER is 10 times yours, would you mind sharing what ETF's are in your portfolio???


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## andrewf (Mar 1, 2010)

Jungle said:


> WOW great news! Can't wait to switch from e-series to Vanguard.
> 
> Andrew any reason why you went with VEU? I kind of like that it has all the europe, emerging market and pacific all in one fund. So you pay one commission fee.


I'm indexing equities with VTI (all US equity), VEU (world ex-US) and XIU (beef up my Canada weight that's present in VEU).

I don't have a massive portfolio, so this gives me diversification while retaining some granularity.


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## larry81 (Nov 22, 2010)

14dmoney said:


> Hi Larry,
> From someone whose weighted MER is 10 times yours, would you mind sharing what ETF's are in your portfolio???


Symbol	MER
XSB	0.25%
XRE	0.55%
XIC	0.25%
VTI	0.07%
VEA	0.15%
VWO	0.22%

Weighted to my holding, the global MER is 0.21%

Let me repost an image i already posted on another thread:


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## I'm Howard (Oct 13, 2010)

MDY is probably the best overall performing ETF and the YTM on XSB make it a sell and a TRP,PFE or similar a better buy.
IMO.


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## Belguy (May 24, 2010)

As a general rule of thumb, invest in a few of the lowest fee, broadest based ETF's that you can find. Having only four to six such funds makes managing and rebalancing your portfolio both easy and cheap.

Don't complicate things by adding sector and other more expensive ETF's.

Keep it simple, easy to manage, and cheap!!!

Over time, I did not follow my own advice and kept adding new investments to my portfolio. Now, I am in the process of correcting this error and moving back to just a handful of the broadest, cheapest ETF's such as some of the Vanguard offerings.


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## dubmac (Jan 9, 2011)

Hey..does anyone know whether Vanguard ETF's can be dripped like Claymore ETF's?


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## larry81 (Nov 22, 2010)

dubmac said:


> Hey..does anyone know whether Vanguard ETF's can be dripped like Claymore ETF's?


of course !


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## warp (Sep 4, 2010)

Larry.....

I have held XRE for years.

It always bothers me that the mer is .55% for holding 11-12 reits.

I keep telling myself to just sell it and buy Riocan, and maybe Chartwell , pay $20 commission and use those 2 for my reit exposure.

Its just my own laziness that stops me.

What do you think


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## larry81 (Nov 22, 2010)

warp said:


> Larry.....
> 
> I have held XRE for years.
> 
> ...


I hold XRE in my TFSA, while the MER vs holding # might seem high, i like the simplicity of it and the fact that it does offer me diversification in my REIT exposure, even if its "poor" diversification (11 holdings...).

An alternative would be BMO ZRE with 18 holdings and 0.55% MER
http://www.etfs.bmo.com/bmo-etfs/glance?fundId=80001

Some could arge that ZRE is a better choice but i will personally keep my XRE and probably buy another 5k chunk this year with the new TFSA space 

Edit: Added bonus, i have a preference for iShares over a big bank like BMO wich is just trying to "surf" the ETF wave... afaik they could drop their ETF offering tommorow.


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## andrewf (Mar 1, 2010)

I kinda like having even 12 or 13 REITs. It helps avoid having some of the risk of one of your two holdings blowing their brains out like H&R with the Bow.


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## avrex (Nov 14, 2010)

larry81 said:


> Added bonus, i have a preference for iShares over a big bank like BMO wich is just trying to "surf" the ETF wave... afaik they could drop their ETF offering tommorow.


Yes, the BMO ETFs could disappear some day, if they don't get enough market share. 
The same thing happened to TDs four ETFs that they tried in the early 2000s.


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## larry81 (Nov 22, 2010)

avrex said:


> Yes, the BMO ETFs could disappear some day, if they don't get enough market share.
> The same thing happened to TDs four ETFs that they tried in the early 2000s.


this is what i had in mind when i posted 

banks just trying to profit from the "etf wave"


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## Rysto (Nov 22, 2010)

dubmac said:


> Hey..does anyone know whether Vanguard ETF's can be dripped like Claymore ETF's?


Vanguard doesn't offer a DRIP plan like Claymore. However, most brokerages can set up synthetic DRIP plans where they buy new shares on the market with any distributions. Typically there's no fee for this kind of purchase(other than the bid/ask spread), but ask your broker.


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## Belguy (May 24, 2010)

A dozen or so ETF's in a portfolio is perhaps a few too many. I keep fighting myself to try to keep the number of my ETF holdings down to a precious few. It just makes everything easier and cheaper to handle. With a dozen ETF holdings, you could easily end up holding hundreds and hundreds of stocks and being over diversified which is often referred to as 'diworsification'.


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## warp (Sep 4, 2010)

Belguy said:


> A dozen or so ETF's in a portfolio is perhaps a few too many. I keep fighting myself to try to keep the number of my ETF holdings down to a precious few. It just makes everything easier and cheaper to handle. With a dozen ETF holdings, you could easily end up holding hundreds and hundreds of stocks and being over diversified which is often referred to as 'diworsification'.


Belguy:

IM not sure, but maybe you misunderstand what we are dicusssing here.

We are referring to XRE......the Ishares Reit ETF in canada.

IT holds only 11 holdings,,,all reits.
Paaying a mer of .55% seems high to me considerig the small umber of holdings,,,and I have owned XRE for years.

We are not talking about holding 11-12 ETF's...( which by the way, is not really that many if all you own are ETF's)
However Im sure you know, buying the broadest based ETF's usually works best. you can cover most asset classes with 6-8 ETF's i bet)


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## warp (Sep 4, 2010)

BELGUY:

Look up the new ETF from Vanguard....VXUS.

ALL world, all cap, minus US

mer: .20%

IT may be the broadest ETF you can buy to cover the world, minus the USA
Everything you need in one ETF.

Tell me what you think


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## Argonaut (Dec 7, 2010)

Yeah, no sense in holding XRE when you could just hold REI.UN. Look at a one year comparison chart - they follow each other in sync, but RioCan has performed better, yields the same, and has no MER. You cannot give the "past performance is no guarantee" argument here, because REI.UN is such a large position of XRE anyway.


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## andrewf (Mar 1, 2010)

It's like arguing why hold XIU. Hold RY instead. Better yield, no MER, and RY is 7% of XIU.


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## Belguy (May 24, 2010)

Warp, what is the difference between the new VXUS and Vanguard's VEU which has been around since March 2008?


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## andrewf (Mar 1, 2010)

VEU tracks 2200 large and mid caps. Sound like VXUS includes small caps as well. Honestly, though, international small caps might be one area where active management will outperform.


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## Belguy (May 24, 2010)

I agree that there are certain segments where active management should be considered--smallcaps, in general, and international smallcaps specifically. I would also consider active management for emerging markets investments.

However, once again, I don't follow this myself as most of my smallcap and emerging markets investments are ETF's.


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## Argonaut (Dec 7, 2010)

andrewf said:


> It's like arguing why hold XIU. Hold RY instead. Better yield, no MER, and RY is 7% of XIU.


I just have to sigh and shake my head at this one. RioCan is a 25% weighting, not 7%. XRE is all one sector. XIU does not follow RY lock in step. Do you work for Blackrock?


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## warp (Sep 4, 2010)

Belguy said:


> Warp, what is the difference between the new VXUS and Vanguard's VEU which has been around since March 2008?


BELGUY:

VXUS is All world minus US all-cap

From what I can ascertain...VXUS includes small cap, where VEU may not.

I have read where VXUS is like buying appr 88% VEU and 12% VSS, (Vanguard world minus us small cap etf)

However the feeling is that VXUS is more tax effective, and unless Im wrong has a lower MER at .20% ,than either VEU and VSS.

It may be a very good cost effective ETF for all-world all-cap minus US .
One stop shopping for ETF believers

I have also read where small cap, especially intl small cap may benefit from active management, but I'm not sure I'm 100% convinced of that yet.


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## andrewf (Mar 1, 2010)

Argonaut said:


> I just have to sigh and shake my head at this one. RioCan is a 25% weighting, not 7%. XRE is all one sector. XIU does not follow RY lock in step. Do you work for Blackrock?


Past correlations are not indicative of future correlations. Beyond that, there is a chance, however small, that Riocan trips up and does very poorly. Maybe then your 100% weight on Riocan doesn't look so good. It happened to H&R, and it can happen to Riocan. I'd like the MER to come down, too, but in the mean time the diversification of XRE isn't worthless.


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## rookie (Mar 19, 2010)

does it still makes sense to go through the elaborate process of td eseries? are the options, mers, performance of vanguard and eseries comparable?


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## warp (Sep 4, 2010)

andrewf said:


> Past correlations are not indicative of future correlations. Beyond that, there is a chance, however small, that Riocan trips up and does very poorly. Maybe then your 100% weight on Riocan doesn't look so good. It happened to H&R, and it can happen to Riocan. I'd like the MER to come down, too, but in the mean time the diversification of XRE isn't worthless.


Well said...

I too like the diversification of XRE, even if it only is 11 holdings.

What I said still stands though...the MER at .55 is excessive, and Id like for it to come down.

Just like mutual fund mer's in Canada...ETF mer's are higher than in the US due to lack of competition...and the financial big wigs know they dont have to drop them.

Sure do wish VANGUARD would come to Canada.


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## larry81 (Nov 22, 2010)

warp said:


> Well said...
> 
> I too like the diversification of XRE, even if it only is 11 holdings.
> 
> ...


True, however the difference between ETF pricing is much lower than the US/CAN mutual funds pricing


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## Sampson (Apr 3, 2009)

rookie said:


> does it still makes sense to go through the elaborate process of td eseries?


What is elaborate? To open an account you simply fill in a 2 page form, along with some investor risk profiling and you are done.


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## warp (Sep 4, 2010)

Im just looking over VXUS

Its surprising that an all world ( minus US) all-cap ETF like this , with 
$ 53.8 BILLION af assets, ( its an ETF class of a vangaurd mutual fund),
would have 7.5% of its assets in it's top ten holdings!!

I already own 2 of the top ten holdings....and the canadian banks are all in here too. Royal, TD, Scotia, and Suncor, in its top 50 holdings!
And I already own a few in the top 50 holdings too.

I bet you would lose the div tax credit if you held this in a cash account.

Its north american holdings are 8.2% of the total...and since it has no US holdings,,,I assume that 8.2% would be in Canada.


With ETF's there always seem to be surprises.
Best to have a good look first.


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## warp (Sep 4, 2010)

Forget to mention in last post, VXUS has 6547 stock holdings....

and 7.5% of assets are in the top 10 stocks it holds!! 

I know Vanguard ETF's are cap weighted..but wow!


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## Belguy (May 24, 2010)

Don't forget, when considering a REIT ETF, have a look at ZRE in addition to XRE.

Which looks like the better choice?


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