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Discussion Starter #1
I've been looking at the new Vanguard Portfolio ETFs (VEQT, VGRO, VBAL, VCNS, VCIP).

Why are they cheaper than their underlying parts?

For example, as of today (March 22, 2020), here's the allocation and price breakdown of VEQT:

TickerNameAllocationPrice
VUNVanguard US Total Market Index ETF39.90%$45.26
VCNVanguard FTSE Canada All Cap Index ETF30.40%$23.93
VIUVanguard FTSE Developed All Cap ex North America Index ETF22.00%$21.49
VEEVanguard FTSE Emerging Markets All Cap Index ETF7.70%$26.99

The weighted average of the Index ETF prices is:

.399*45.26 + .3040*23.93 + .22*21.49 + .077*26.99 = $32.14

However, VEQT is currently priced at $21.20

Am I missing something? Why is the portfolio ETF so much cheaper?
 

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You are comparing the price of a share. They could split the share and the price would also split. Meaningless unit

It's not cheaper either. Add up the MERs of each and the bundle costs slightly more in fees
 

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You are comparing the price of a share. They could split the share and the price would also split. Meaningless unit
Fair enough. How should I be comparing them? AUM?

It's not cheaper either. Add up the MERs of each and the bundle costs slightly more in fees
I assumed the MER of VEQT (.25%) would be inclusive of the sub-component MERs, since Vanguard is managing everything. No?
 

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I assumed the MER of VEQT (.25%) would be inclusive of the sub-component MERs, since Vanguard is managing everything. No?
They charge a small MER to do the balancing for you. With free ETF purchases at brokerages like Questrade I just buy the underlying ETF myself and balance myself but the Vanguard MERs are not bad at all

VCN .06
VUN .16
VIU .23
VEE .24
 
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