VANCOUVER, British Columbia, April 5, 2016 /CNW/ -- Vanguard Investments Canada Inc. today opened its low-cost café at the entrance to Burrard Station in Vancouver. The café—the third such pop-up café from Vanguard—is designed to raise awareness among investors about the impact of costs and to help them understand how minimizing costs in their investment portfolios can potentially enable them to save more over time.
Vanguard is selling coffee at the café for just 22 cents a cup, or one-ninth the average price of a cup of coffee.* This approximates the differences between Vanguard's simple-average management expense ratio (MER) across its ETFs line-up (0.22%), and the mutual fund industry's average MER (2.12%).**
"Lower costs let investors keep more of their returns over time," said Atul Tiwari, managing director of Vanguard Investments Canada Inc. "Just as every cent you pay for a cup of coffee disappears from your wallet, every dollar you pay in investment costs disappears from net returns. It's why the investment program with the lowest cost should provide the opportunity for better long-term net returns."
The low-cost café will be open for business from April 5 through 7. The full details appear on the low-cost café landing page. This marks the third outing for the café, which spent three days in Toronto in September 2015, and three days in Montreal last month. Vanguard sold over 4,500 cups of coffee in Toronto, and over 1,500 cups in Montreal.
In addition to the café, Vanguard continues to educate investors about the importance of investment cost through research, online tools, and online content. Vanguard's infographic on the high impact of low-cost investments, shows how focusing on costs can go a long way in overall portfolio returns. Over a 30 year period, an investor could save $215,000 more if invested in a low-cost fund versus a high-cost fund. Vanguard's customizable cost compare tool simulates the impact of costs over any length of time with the flexibility to compare the costs of thousands of Canadian mutual funds and ETFs.
Cost is a key pillar in Vanguard's investment philosophy. Vanguard's Principles for Investing Success, outlines four key fundamental tenets: 1) Create clear and appropriate goals, 2) develop a suitable asset allocation using broadly diversified funds, 3) minimize cost, and 4) maintain perspective and long-term discipline. Cost is significant because every dollar paid in management fees or trading commissions is simply a dollar less that potentially could be earning return.
Vanguard: Innovative and low-cost
Vanguard Investments Canada Inc. recently launched Vanguard Target Retirement Funds for qualified institutional investors, including plan sponsors, in Canada. The new series of 10 low-cost, index-based pooled target-date funds gradually and automatically shift to a more conservative asset allocation as the target date draws near.
Six newly launched low-cost index pooled funds will make up the underlying investments for the Vanguard Target Retirement Funds. These six new pooled funds will also be available individually to qualified institutional investors. The Target Retirement Funds and index pooled funds are Vanguard Investments Canada Inc.'s first investment products specifically designed for Canadian plan sponsors and other institutional clients and continue to broaden out Vanguard's business in Canada. Vanguard Investments Canada Inc. was founded in December 2011, and also offers 23 low-cost exchange-traded funds (ETFs).
Vanguard Investments Canada Inc. is a wholly owned indirect subsidiary of The Vanguard Group, Inc., and manages nearly CAD $7 billion in assets. The Vanguard Group, Inc., is one of the world's largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages more than USD$3.2 trillion in global assets, including nearly USD$500 billion in global ETF assets. Vanguard has offices in the United States, Canada, Europe, Australia and Asia. The firm offers more than 315 funds, including ETFs, to its more than 20 million investors worldwide.
Vanguard employs a unique operating structure. Unlike firms that are publicly held or owned by a small group of individuals, The Vanguard Group, Inc., is owned by Vanguard's U.S.- domiciled funds and ETFs. Those funds, in turn, are owned by Vanguard clients. This unique mutual structure aligns Vanguard interests with those of its investors and drives the culture, philosophy, and policies throughout the Vanguard organization worldwide. As a result, Canadian investors benefit from Vanguard's stability and experience, low-cost investing, and client focus. For more information, please visit vanguardcanada.ca.
All asset figures are as of February 29, 2016, unless otherwise noted.
For informational purposes only. This press release is not being issued in the context of an offering of the Vanguard Target Retirement Funds or any securities described herein, nor is a recommendation to buy, hold or sell, any security, including securities of the Vanguard Target Retirement Funds. The offering of securities of the Vanguard Target Retirement Funds and index pooled funds described in this document, if conducted, will be conducted by means of a private placement of the securities only in those jurisdictions and to those persons where and to whom they may be lawfully sold and therein only by those entities permitted to sell such securities. Investments in the funds will only be permitted once offering documentation has been prepared and has been received and reviewed by prospective investors, and once such investors have had the opportunity to seek investment, legal or other advice. Please see offering memorandum for important information, including information about the investment objectives and strategies of the Vanguard Retirement Funds and index pooled funds and the key risks associated with an investment in the funds.
* This figure compares $0.22 to $2.01, the average cost of a medium cup of coffee, which was calculated by Vanguard Investments Canada Inc. and based on a July 2015 survey of the pre-tax price for a medium cup of coffee at three major coffee retailers located in Toronto.
** The MERs are average MERs using all available data as of December 31, 2014. The Vanguard ETF MERs were sourced from the ETFs' annual management reports of fund performance. The Vanguard ETF MERs include waivers and absorptions and are subject to change. Without waivers and absorptions, the Vanguard ETF MERs would have been higher. Vanguard Investments Canada Inc. expects to continue absorbing or waiving certain fees indefinitely but may, in its discretion, discontinue this practice at any time. For more detailed information visit vanguardcanada.ca. The average MERs for the ETF industry and mutual fund industry were calculated by Investor Economics. The mutual fund industry MER calculation includes load and no load series A, series T and Advisor series mutual funds only.
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SOURCE Vanguard Investments Canada Inc.
For further information: For more information, contact the Vanguard PR Hotline at 610-669-5002 or email@example.com, www.vanguard.com