TORONTO, Sept. 22, 2015 /CNW/ -- Vanguard Investments Canada Inc. today launched an educational campaign to emphasize the importance that costs play in long-term investing. At the centre of the campaign, Vanguard is selling coffee at our new Low-Cost Cafe for just 22 cents a cup at Toronto's Union Station, or one-ninth the average price of a cup of coffee.* The cafe 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.
"Low costs are a critical factor in determining retirement readiness, and Vanguard believes that educating investors about cost will give them a better chance of investment success," said Atul Tiwari, managing director of Vanguard Investments Canada Inc. "The cafe puts investment costs in real terms by equating investment costs to an everyday purchase."
The cafe's low-cost coffee will be available in three locations throughout the prominent, well-travelled Union Station on Front Street in Toronto from September 22 through 24. The full details appear on the low-cost cafe landing page.
In addition to the cafe, Vanguard continues to educate investors about the importance of investment cost through research, online tools, and online content. Vanguard's recent 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 low-cost fund verses 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: The low-cost leader
Vanguard ETF® management expense ratios (MERs)—which includes management fees—are lower than those of competitors, on average. As of December 31, 2014, Vanguard's simple-average management expense ratio (MER) across its 21 ETFs was 0.22%, the ETF industry's was 0.79%, and the mutual fund industry's was 2.12%.**
Management fee reductions to 0.20% from 0.23% for the Vanguard FTSE Developed Europe Index ETF (TSX ticker: VE) and Vanguard FTSE Developed Asia Pacific Index ETF (TSX ticker: VA) were announced in June this year. In 2014, Vanguard reported management fee reductions on more than half of its current lineup of 21 ETFs.
Vanguard Investments Canada Inc. is a wholly owned indirect subsidiary of The Vanguard Group, Inc. and manages about $5.5 billion (CAD) 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 $3.2 trillion (USD) in global assets, including nearly $500 billion (USD) in global ETF assets. Vanguard has offices in the United States, Canada, Europe, Australia and Asia. The firm offers 300 funds, including ETFs, to its more than 20 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.
All asset figures are as of August 31, 2015, unless otherwise noted.
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.
* 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.
SOURCE Vanguard Investments Canada Inc.
For further information: For more information, contact the Vanguard PR Hotline at 610-669-5002 or [email protected], http://www.vanguard.com