TORONTO, Dec. 14, 2016 /CNW/ - Vanguard Investments Canada Inc. today marked the 5th anniversary of the launch of its business in Canada.
"We are excited to mark our first five years in Canada and encouraged by the positive response we have received from Canadian investors and advisors," said Vanguard CEO Bill McNabb. "The Canadian market is a significant focus area for our global business and since our launch, Vanguard has become one of the country's leading ETF providers in just a short time. Further, we have helped change the way Canada invests, bringing low-cost, broadly diversified products to the market and advocating for a long-term, disciplined approach to investing."
The ETF industry in Canada surpassed $110 billion in assets under management earlier this year, a nearly three-fold increase since 2010, with the number of providers more than quadrupling over the same time period.1
Vanguard Investments Canada offers 29 total ETFs, including 13 launched in the past two years, with more than $9 billion in assets under management. This includes the recent launch of Vanguard's first actively managed ETFs in Canada. Vanguard also recently introduced a series of ten Target Retirement Funds for qualified institutional investors, including plan sponsors, in Canada.
Vanguard has 45 employees in Canada, with one-third hired in the past year and ranks as the third largest ETF provider in the country.
Leading the way on low fees
"Vanguard has a long track record as a global low-cost leader and Canadians are realizing that costs can have a major impact on investment returns," said Atul Tiwari, managing director, Vanguard Investments Canada Inc. "We look forward to continuing to bring down the costs of investing while adding high-quality and enduring products for investors and advisors over the coming years."
Since 2012, the asset-weighted management expense ratios (MERs) for Vanguard ETFs has declined by almost half, from 0.27%2 to 0.15%3, compared to the mutual fund asset weighted industry average of 1.91% and the overall ETF asset-weighted industry average of 0.40%.4
Pay less, earn more: Impact of low-cost investments over time
Investment fees add up over time. To illustrate this, the graph below calculates the potential cost savings on a typical Canadian portfolio over time. For instance, if you invested $100,000 in an ETF with Vanguard's average management expense ratio (MER) of 0.15%, in 30 years your investment could have earned $129,110 more than someone who invested in a higher-cost investment with an average MER of 1.00%.5
2 As of December 31, 2012
3 As of December 31, 2015
4As of December 31, 2015
All data sourced from ETF issuers management report of fund performance
5This is a hypothetical example and does not represent any particular investment. The cost savings reflect a comparison between Vanguard ETF fees and a higher cost investment. The comparison is based on a 6% annual return, an initial investment of $100,000, an average 1.00% MER for a higher-cost fund and an average 0.15% MER for the Vanguard ETFs. All MERs are as of December 31, 2015. Distributions are included, but transaction costs, bid-ask spreads, inflation, income taxes payable by any unitholder, and other potential costs are not included. Actual investment results will vary upward or downward, and the example does not factor risks associated with market volatility or short-term events. Vanguard ETF MERs were sourced from the Management Reports of Fund Performance. 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.
"As one chapter closes on our first five years in Canada, another one opens with the opportunity to continue serving the needs of Canadian investors and giving them the best chance for investment success," Tiwari added. "I would especially like to thank our employees, both in Canada and globally, along with Canadian investors and advisors for all of their support in reaching this milestone."
Vanguard Investments Canada Inc. is a wholly owned indirect subsidiary of The Vanguard Group, Inc. and manages more than $9 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 3.8 trillion in global assets. Vanguard has offices in the United States, Canada, Europe, Australia and Asia. The firm offers more than 350 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 monetary figures are expressed in Canadian dollars unless otherwise noted.
1Data from Morningstar, Bloomberg and Strategic Insight.
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.
In this material, references to "Vanguard" are provided for convenience only and may refer to, where applicable, only The Vanguard Group, Inc., and/or may include its affiliates, including Vanguard Investments Canada Inc.
Information, figures and charts are summarized for illustrative purposes only and are subject to change without notice.
All investments, including those that seek to track indexes, are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. Any given ETF may not be a diversified investment. Foreign investing involves additional risks, including currency fluctuations and political uncertainty. Stocks of companies in emerging markets are generally more risky than stocks of companies in developed countries.
SOURCE Vanguard Investments Canada Inc.
For further information: Matt Gierasimczuk, Vanguard Canada Public Relations, Phone: 416-263-7087, [email protected]