- This marks Vanguard's sixth fee reduction in the last seven years on its Canadian ETFs
- All three ETFs will have new management fees of 0.15%
- Vanguard's average management expense ratios (MER) on its ETFs are 57% lower than the industry average1
TORONTO, May 19, 2020 /CNW/ - Vanguard Investments Canada Inc. announced that it has lowered the management fee on three of its Canadian bond ETFs to 0.15%, the Vanguard Canadian Long-Term Bond Index ETF (VLB), the Vanguard Canadian Government Bond Index ETF (VGV) and the Vanguard Canadian Corporate Bond Index ETF (VCB).
"Vanguard has an unwavering commitment to help investors achieve better outcomes by lowering the cost of investing. For us, low costs are not a pricing strategy. We are built to pass on the benefits of our size and scale to investors in helping them achieve investment success," said Kathy Bock, Managing Director and Head of Vanguard Investments Canada Inc. "This is even more important in the current market climate, where low returns mean that costs erode an even larger share of returns than they would normally."
"The past few months have been incredibly challenging for investors and financial advisors with extreme market volatility and a sharp drop in the financial markets. In this environment, high quality bond ETFs can play a key role as a stabilizing force in a portfolio and we are pleased to support investors with these fee reductions to help them keep more of their returns," said Scott Johnston, Head of Product, Vanguard Investments Canada Inc.
Low Fees and the "Vanguard Effect" in Canada
"Lowering fees is business as usual at Vanguard. This is our sixth significant fee reduction in the last seven years and continues our trend of passing on cost-savings to investors, following fee reductions in 2013, 2014, 2015 , 2018 and 2019. These reductions have saved Canadians over $10 million to put back into their portfolios," added Bock.
The cost of Vanguard ETFs are 57% lower than the ETF industry average1, based on the asset-weighted management expense ratios (MERs). Additionally, industry investment fees have come down significantly over the past several years, helping Canadians keep more of their investment dollars, a phenomenon that has taken place in the United States, the United Kingdom and Australia following Vanguard's entry into each market and has been called the "Vanguard Effect". Since 2013, Vanguard's fee reductions have saved Canadian investors over $10 million (CAD).2
For more information on Vanguard's broad pricing impact on the ETF market, please see this infographic.
Effective on May 15, 2020 the management fees for the following ETFs were reduced as follows:
Vanguard Canadian Long-Term Bond Index ETF (TSX:VLB) – Vanguard Canadian Long-Term Bond Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad Canadian bond index with a long-term dollar weighted average maturity. Currently, this Vanguard ETF seeks to track the Bloomberg Barclays Global Aggregate Canadian 10+ Year Float Adjusted Bond Index (or any successor thereto). It invests primarily in public, investment-grade fixed income securities issued in Canada.
Vanguard Canadian Government Bond Index ETF (TSX:VGV) – Vanguard Canadian Government Bond Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad Canadian government bond index. Currently, this Vanguard ETF seeks to track the Bloomberg Barclays Global Aggregate Canadian Government Float Adjusted Bond Index (or any successor thereto). It invests primarily in public, investment-grade government fixed income securities issued in Canada.
Vanguard Canadian Corporate Bond Index ETF (TSX:VCB) – Vanguard Canadian Corporate Bond Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad Canadian credit bond index. Currently, this Vanguard ETF seeks to track the Bloomberg Barclays Global Aggregate Canadian Credit Float Adjusted Bond Index (or any successor thereto). It invests primarily in public, investment-grade non-government fixed income securities issued in Canada.
1Sources: Vanguard, Strategic Insight and Morningstar Direct. Calculated as the percentage change between the industry (37 bps) and Vanguard (16 bps).
2Since Vanguard entered the market in 2011, Canadian investors have realized nearly $10 million in cumulative savings through expense reductions on our ETFs. Sources: Vanguard, Strategic Insight and Morningstar Direct.
Canadians own CAD $40 billion in Vanguard assets, including Canadian and U.S.-domiciled ETFs, Canadian institutional products and Canadian mutual funds. Vanguard Investments Canada Inc. manages CAD $23 billion in assets (as of March 31, 2020) with 40 Canadian ETFs, four mutual funds, 12 target retirement funds and eight pooled funds currently available. 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 USD $5.3 trillion (CAD $7.5 trillion) in global assets, including over USD $1 trillion (CAD $1.4 trillion) in global ETF assets (as of March 31, 2020). Vanguard has offices in the United States, Canada, Mexico, Europe, Australia and Asia. The firm offers 425 funds, including ETFs, to its more than 30 million investors worldwide.
Vanguard operates under 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.
Commissions, management fees, and expenses all may be associated with investments in a Vanguard ETF®. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard ETFs® are managed by Vanguard Investments Canada Inc., an indirect wholly-owned subsidiary of The Vanguard Group, Inc., and are available across Canada through registered dealers.
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SOURCE Vanguard Investments Canada Inc.
For further information: Matt Gierasimczuk, Vanguard Canada Public Relations, Phone: 416-263-7087, [email protected]