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As many of you already know, Vanguard Canada has announced a new suite of ETFs:

http://canadiancouchpotato.com/wp-content/uploads/2013/06/Vanguard-ETFs.pdf
http://canadiancouchpotato.com/2013/06/27/the-wait-is-over-new-etfs-from-vanguard/

I am very enthusiastic about the new Vanguard FTSE Canada All Cap and plan to switch my VCE holding (in a tax harvesting position if the market continue to drop). VTI + VXUS + Canada All Cap = Wow !!!

The new Canadian domiciled Vanguard U.S. Total Market is also very interesting but i personally plan to keep adding to US listed VTI.

Please discuss :)
 

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I didn't know. Thanks for the update!
arrgh.. TDWH is making a lot more in brokerage fees off me than anticipated for 2013.. ah well, 1st world problems.. :ambivalence:

I've already sold my VUS two weeks ago (lucky timing)
Now in all likelyhood I'll be trading my VCE in for the Vanguard FTSE Canada All Cap after it becomes available

If by then I think VDY's holdings are overvalued I might take the profit and trade in that one at the same time,
the MER of the Canada All Cap will no doubt be lower than VDY's, so I'd have greater diversification + small-cap + maybe an annual $50+/- MER savings by switching.
 

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I like that they're introducing new products. I would like to see some of the details on MER. The FTSE Canada All Cap is an interesting and appealing choice if the MER is in the right place. I also like that they're going to have an non-hedged version of VUS. But like My Own Advisor said, VTI is just such a better product. When it comes to US equities and international equities, VTI and VXUS are just such great deals.

I love the choices though. And I do feel bad that even since I'm just starting to jump into ETFs with my portfolio and I haven't touched Vanguard Canada.
 

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This news is sort of underwhelming to me, to be honest. In fact, it borders gimmicky if the MER is consistent with other ETF products (VFV/ZSP/XUS and ZCN).

For example, if you compare VTI and VOO, their performances are virtually the same. Yes, VTI holds close to 3500 stocks while VOO holds about 500 stocks. However, the other 3000 stocks that VTI holds (that VOO doesn't hold) probably gives a +/-0.5% in return. I would think it would be similar with the all-cap Canadian ETF, since the sector allocation (per MSCI index) is about the same as the S&P/TSX composite, which holds 250 stocks.

Unless Vanguard decides to drop the MERs to a more attractive level for both of these new products, I don't see the point of anyone switching over from their current index ETF holdings.
 

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Buy, hold, rebalance and prosper and don't keep switching every time that someone comes out with a new product!! Are you after lower fees or are you chasing after performance?

The particular ETF's that you hold in your 'Easy Chair Portfolio' are not nearly as important as getting your ASSET ALLOCATION right in the first place according to your circumstances and risk tolerance.
 

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I am very enthusiastic about the new Vanguard FTSE Canada All Cap and plan to switch my VCE holding (in a tax harvesting position if the market continue to drop). VTI + VXUS + Canada All Cap = Wow !!!


Please discuss :)[/QUOTE]

When a new product comes out to get the last investment dollar buyer beware.
 

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Not a huggge fan of VCE, since top-10 holdings, if you have a large enough portfolio, might as well own them outright:

Top 10 holdings
As of close 31-05-2013
Rank Holdings
1 Royal Bank of Canada
2 Toronto-Dominion Bank
3 Bank of Nova Scotia
4 Suncor Energy Inc.
5 Canadian National Railway Co.
6 Bank of Montreal
7 Potash Corp. of Saskatchewan Inc.
8 Canadian Natural Resources Ltd.
9 TransCanada Corp.
10 Enbridge Inc.

Top-10 holdings = 43% of portfolio. Own the top-10, that almost a proxy for the ETF.
 

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The TSX index itself is concentrated and not well diversified by sector. How much of your portfolio should be invested in an index like that if one of your main objectives is diversification?

The S&P500 is much superior!!!

Would anyone judge that VTI+VXUS+Vanguard Canada All Cap would represent too much diversification???

Over the past twelve months, VTI is up 21.42% while VOO is up 20.56%. Do you think that this is indicative of anything longer term?

Over the past 12 months, my international ETF investment, VEA, is up 18.61% compared to VXUS's return of 13.40%. Is the latter too diversified?
 

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@ Belguy: Your question, "how much of your portfolio should be invested in an index like [TSX] if one of your main objectives is diversification?" piqued my interest, as I had given this thought when I began index investing. I would agree the S&P 500 index is more balanced in terms of the underlying sector diversification. But in the past 10-15 year timeframe, S&P TSX composite has outperformed the S&P 500 by a significant margin. One can argue that I am looking retrospectively. However, who is to say that the TSX won't outperform the S&P 500 again?

Overdiversification is, in my opinion, a trivial issue. If you compare the performance of VTI and VOO, they are virtually the same, even though VTI has about 3500 stocks and VOO has about 500 stocks. For new investors, it's probably better to invest in the broader product (VTI). For investors already holding products, such as VOO (or VFV/ZSP/XUS), which have little to no small or mid caps, I don't think it's worth selling those products to buy the new product, unless the MER is substantially lower with the new products.

On a note of technicality, it's probably not fair to compare VEA and VXUS straight up. VEA contains only EAFE and has no emerging markets. If anything, you should take 80% of VEA's performance and add in 20% of VWO's performance. You will get a closer comparison to VXUS. :)
 

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Only on the dividends though, right? Is there a US ETF that doesn't have any dividends that would be more suitable?
Only less vanilla ETFs, like those that use futures/swaps. For instance, Horizons has an S&P 500 ETF that is not subject to withholding tax: HXS. The MER is higher than for funds like VTI.
 

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yields lower than expected on new Vanguard ETF's

I've really been attracted by Vanguard's low MER and bought some for that reason. But has anyone else noticed the yields so far have been too low so far on the funds that are less than a year old?

For example VRE is paying only about half of what it should be (based on past 6 distributions). The index it follows is yielding 4.75% VDY has been distributing at a rate of about 2.5%, but it's index shows 4.47%.

Anyone else noticing this? Will the yields start to match by the end of the year? They've got some catching up to do!
 

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And so, considering all of the above comments, does the following Couch Potato portfolio represent the ULTIMATE in low fee, broad based index investing?

Vanguard FTSE Canada All Cap (coming soon!)+VTI+VXUS

All critiques welcome!!
 

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And so, considering all of the above comments, does the following Couch Potato portfolio represent the ULTIMATE in low fee, broad based index investing?

Vanguard FTSE Canada All Cap (coming soon!)+VTI+VXUS

All critiques welcome!!
Depends on what the MER is on the new FTSE Canada All Cap. Couple other things to consider:

1) VXUS has more stock holdings, but a small % is made up of Canadian stocks. If you were trying to allocate a 20% Cdn, 20% US, 20% International, and 40% bond portfolio, your portfolio really would actually be roughly 23% Cdn, 20% US, 17% International, and 40% bond.

2) I would also argue that it is actually cheaper buying VEA and VWO separately (assuming yearly balancing) rather than VXUS.

VEA = 0.10% MER
VWO = 0.18% MER
VXUS = 0.16% MER

VXUS is roughly about 80% EAFE and 20% emerging markets. If you were investing $25,000 in international ETF and you were to split VEA and VWO into 80% and 20% proportions, this is how I calculate it out (again, assuming yearly balancing):

VEA: 80%x25,000x0.10%+9.99 (trading commission) = $29.99
VWO: 20%x25,000x0.18%+9.99 = $18.99
Total: $41.98

VXUS: 25,000x0.16%+9.99 = $49.99

Much cheaper for the VEA/VWO split if you were investing with Questrade, where ETF purchases are commission free.
 

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And so, considering all of the above comments, does the following Couch Potato portfolio represent the ULTIMATE in low fee, broad based index investing?

Vanguard FTSE Canada All Cap (coming soon!)+VTI+VXUS

All critiques welcome!!
Honestly, it makes no difference. Why do you keep on asking about alternatives?
 
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