# Vanguard FTSE All-World ex-Canada Index ETF (VXC)



## 6811 (Jan 1, 2013)

I received a Management Proxy Circular in the mail this morning with a Special Meeting Notice. It seems Vanguard wants to change the investment objectives of six of it's FTSE ETF funds: VXC, VDU, VEF, VE, VA and VEE, and want my vote for or against the changes.

For VXC, my interest, Vanguard wants to change from it's current FTSE All-World ex-Canada Index to FTSE Global All Cap ex-Canada China A Inclusion Index.

I've been buying quite a bit of VXC for the last 12 months and have been quite satisfied with the return I've received so far, about 10.5% (including divvies). 

With the news of a de-valued Yuan as well as some market turmoil coming out of China lately I wonder if this is a good change to make at this time. Anyone have an opinion on whether this change is a good one?


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## Moneytoo (Mar 26, 2014)

I received the notice, too (and have read about the proposed change before - wanted to sell VEE, but missed the chance...) 

Not sure if it's a good change or not (so decided not to vote). Will keep VEE in my RRSP, but will be buying XAW (iShares ex-Canada EFT) in my TFSA. But wouldn't switch to it if I already held VXC - would just wait and see (maybe the change won't even get passed? )


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## Sampson (Apr 3, 2009)

Depends if you invest in small cap equities, and also if you believe they add value to the portfolio. I don`t invest in any of the funds you list, but I did get the notice for US funds, and I like the change. Reduces the number of holdings in my portfolio, and I get to maintain small-cap exposure.

However, in my opinion, small cap Canadian funds have not been good at either boosting returns, nor diversifying portfolios...


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## pwm (Jan 19, 2012)

I hold VEF and VEE and I got the same Proxy vote info. I had the same reaction as you did. I voted "for" anyway.


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## 6811 (Jan 1, 2013)

Moneytoo said:


> Not sure if it's a good change or not (so decided not to vote). Will keep VEE in my RRSP, but will be buying XAW (iShares ex-Canada EFT) in my TFSA. But wouldn't switch to it if I already held VXC - would just wait and see (maybe the change won't even get passed? )


Yabbut if like you nobody votes, the changes will pass!


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## 6811 (Jan 1, 2013)

pwm said:


> I hold VEF and VEE and I got the same Proxy vote info. I had the same reaction as you did. I voted "for" anyway.


After reading the "China A Shares Risk" paragraph (page 4 in the circular), my first inclination was to vote against. This paragraph states that the changed ETF (VXC) "may not be able to access a sufficient amount of China A shares to track its target Index". The other options as described briefly in this paragraph "could increase the Vanguard ETF's sampling process risk or _investment cost_" (my italics).

Seems to me that if Vanguard is unsure that they will be able to properly track an index, then they should not be making a change. Covering their buns with mentioning increased investment cost IMHO leaves the door open to higher fees.


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## mrPPincer (Nov 21, 2011)

You guys are lucky imho, at least you get a chance to get in after the China market started correcting.

I hold Vanguard's VWO, and they have already included the China A shares, before the correction started, when the China stock market was extremely leveraged (or so the talking heads have it, for all I know it's still overly leveraged).

No complaints though, I'm happy to have a little exposure to the markets of the next up and coming economic superpower.
VWO has taken a bit of a hit so far, but I don't think the China A weighting that it has has made a huge difference so far; I'll rebalance sometime if it drops enough, maybe if/when CIBC IE offers free ETF trades again.


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## Moneytoo (Mar 26, 2014)

Well I also have DEM and IEMG (both are down a lot - without China A shares ), VEE (wrapper for VWO) is the only one that is still green (but it's in CAD, so mostly thanks to our dropping dollar


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## My Own Advisor (Sep 24, 2012)

Who said indexing was easy and passive? 

Kidding, VXC is a great product.


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## 6811 (Jan 1, 2013)

I've done a little more digging and found that China A would make up about 3% (or less) of the total holdings of VXC, so Moneytoo you may have the right idea about not even bothering to vote (though my obsessive/compulsive tendency insists I do) 

https://www.vanguardcanada.ca/indiv...erview?portId=9548&assetCode=EQUITY##overview


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## Moneytoo (Mar 26, 2014)

@6811, I'm just lazy... lol


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