These guys got it right. They realized Mutual fund is on its (very slow) death and started their etf family. They give you the option to convert their mutual fund to ETF. You wonder when canadian banks would do that.
To say the obvious, Vanguard has half the MER, but both funds are a little different. With Claymore, it appears that you are indirectly paying for their pre-authorize purchase plan. (bypass the broker commissions). Kind of like a TD E-series fund, but TD doesn't have emerging market exposure, in e-series.
And then there is the Claymore Broad Emerging Markets ETF (CWO) which holds the Vanguard Emerging Markets ETF as it's sole investment but which provides currency hedging---at a price!!
The underlying Vanguard fund charges a MER of just 0.27%, when purchased directly, while the currency hedged Claymore version charges 0.65% but then there is no concern about exchange rates.
And so, when all is said and done, which of these two options is better for Canadian investors?
I guess that it all comes down to whether you believe that the added fees for the currency hedging is worth it or not.
I have read a few discussions that say you could pay a premium for someone bet your currency hedge, over the long term. You could face a loss in the hedge and miss matching the index. There are ways you can save on currency exchange fees.
My overall conclusion is to hold some hedged ETF's and some non-hedged ETF's and then not to worry too much about hedging again.
I plan to hold each of these ETF's 'forever' except to adjust annually for rebalancing purposes.
Thus, I hold a few hedged ETF's from Canadian firms and the rest are non-hedged, mainly lowest fee, non-hedged Vanguard ETF's.
In the final analysis, hedging is just not that great a deal and everything will come out in the wash, give or take, over the long term.
I will revisit the entire matter when I turn 100.
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