MONTREAL, March 15, 2016 /CNW/ -- Vanguard Investments Canada Inc. today opened a new front in its educational campaign to emphasize the importance that costs play in long-term investing. At Bonaventure station off Rue de la Cathédrale Ouest in Montreal, Vanguard is selling coffee at our new Low-Cost 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 ETF line-up (0.22%), and the mutual fund industry's average MER (2.12%).**
The café 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.
"Costs are corrosive," said Atul Tiwari, managing director of Vanguard Investments Canada. "Every cent you pay for a cup of coffee disappears from your wallet, and 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 March 15 through 17. The full details appear on the low-cost café landing page. This marks the second outing for the café in Canada, which made its debut at Toronto's Union Station in September 2015.
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 a dollar subtracted from your potential return.
Vanguard: Innovative and low-cost
Vanguard Investments Canada launched two low-cost developed markets ETFs in December 2015, bringing to 23 the number of ETFs offered by the firm.
The Vanguard FTSE Developed All Cap ex North America Index ETF (TSX ticker: VIU) and Vanguard FTSE Developed All Cap ex North America Index ETF (CAD-hedged) (TSX ticker: VI) both have a management fee of 0.20%. They provide investors with exposure to developed markets (excluding both Canada and the U.S.), and follow all-capitalization benchmarks that include large-, mid-, and small-capitalization stocks.
The developed markets ETFs joined six international TSX-listed ETFs that had transitioned, or are in the process of transitioning, to all-cap indexes as part of changes first announced by Vanguard in June 2015. Once the transitions are complete, Vanguard will offer 13 ETFs with all-cap exposure.
Vanguard Investments Canada Inc. is a wholly owned indirect subsidiary of The Vanguard Group, Inc. and manages $6.7 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 more than 315 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 January 31, 2016, 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.
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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 protected], http://vanguardcanada.ca