Author Topic: Canada: buying Vanguard ETFs  (Read 5852 times)

scrubbyfish

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Canada: buying Vanguard ETFs
« on: November 09, 2015, 09:57:15 PM »
Moving stuff from TD Waterhouse to RBC direct investing. Before I do, I just want to be certain that the costs are the same.

Is it true that:
  • Vanguard (not the brokerage) sets the MER for Vanguard ETFs, thus should be the same through any brokerage
  • each brokerage can set its own fee on top of that, but for Waterhouse and RBC directinvesting, that's simply $10 per trade
  • having Vanguard ETFs in Waterhouse or RBC direct investing should cost exactly the same
Am I missing anything?

Le Poisson

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Re: Canada: buying Vanguard ETFs
« Reply #1 on: November 10, 2015, 05:22:17 AM »
Moving stuff from TD Waterhouse to RBC direct investing. Before I do, I just want to be certain that the costs are the same.

Is it true that:
  • Vanguard (not the brokerage) sets the MER for Vanguard ETFs, thus should be the same through any brokerage
  • each brokerage can set its own fee on top of that, but for Waterhouse and RBC directinvesting, that's simply $10 per trade
  • having Vanguard ETFs in Waterhouse or RBC direct investing should cost exactly the same
Am I missing anything?

I'm holding Vanguard at Questrade.

No fees at all, so its easy to put in $50 here and $100 there. Although all our other banking is at RBC, I went with QT for the TFSA since ETFs trade for free. MERs are attached to the fund itself so there is no way to dodge the fees.

My portfolio is pretty simple - its the couchpotato setup with VAB, VXC and VCN. Were I to do it again, I would track the three funds for a month or two while saving, then buy the funds individually when they were down.  I dumped everything in at once thinking "the sooner the better". Things have slumped since, and I haven't been able to catch up to my losses, especially on VCN and VAB.

I also allowed myself a $100 side bet in individual stocks just for fun. Right now its in ZZZ.TO and doing remarkably well just in the past couple weeks. This investment is so small though that it really has little to no effect on the whole portfolio.

Retire-Canada

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Re: Canada: buying Vanguard ETFs
« Reply #2 on: November 10, 2015, 06:40:53 AM »

Am I missing anything?

I'm holding Vanguard at Questrade.

No fees at all, so its easy to put in $50 here and $100 there.

Yes. That's nice for sure. I am with QT for the same reason. I hate fees.

lostamonkey

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Re: Canada: buying Vanguard ETFs
« Reply #3 on: November 10, 2015, 07:16:54 AM »
Moving stuff from TD Waterhouse to RBC direct investing. Before I do, I just want to be certain that the costs are the same.

Is it true that:
  • Vanguard (not the brokerage) sets the MER for Vanguard ETFs, thus should be the same through any brokerage
  • each brokerage can set its own fee on top of that, but for Waterhouse and RBC directinvesting, that's simply $10 per trade
  • having Vanguard ETFs in Waterhouse or RBC direct investing should cost exactly the same
Am I missing anything?

Yes, Vanguard not your brokerage sets the MER.

Yes, $10 per trade is fairly common at the big banks.

Yes, they should cost the same at both brokerages.

Mmm_Donuts

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Re: Canada: buying Vanguard ETFs
« Reply #4 on: November 10, 2015, 07:19:28 AM »
Yes, the fact that you can buy Vanguard ETFs for free at Vanguard.

EDIT: I'm sure that there may be other brokerages that let you do this - Schwab comes to mind in particular - but Vanguard is the one I know for certain off the top of my head.

I don't think you can invest directly with Vanguard in Canada.

FerrumB5

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Re: Canada: buying Vanguard ETFs
« Reply #5 on: November 10, 2015, 07:29:02 AM »
E-Trade charges $19.99 for EACH trade of Vanguard ETFs. So if one plans to add $100 each month - don't do it in E-Trade. I'm switching to direct Vanguard. In USA

johnny847

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Re: Canada: buying Vanguard ETFs
« Reply #6 on: November 10, 2015, 08:15:22 AM »
Yes, the fact that you can buy Vanguard ETFs for free at Vanguard.

EDIT: I'm sure that there may be other brokerages that let you do this - Schwab comes to mind in particular - but Vanguard is the one I know for certain off the top of my head.

I don't think you can invest directly with Vanguard in Canada.

/face palm. My bad

scrubbyfish

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Re: Canada: buying Vanguard ETFs
« Reply #7 on: November 10, 2015, 08:49:22 AM »
Yes, Vanguard not your brokerage sets the MER.

Yes, $10 per trade is fairly common at the big banks.

Yes, they should cost the same at both brokerages.

Thanks very much, lostamonkey! And to everyone else, too, for sharing your additional thoughts.

FrugalFan

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Re: Canada: buying Vanguard ETFs
« Reply #8 on: November 10, 2015, 12:53:35 PM »
Currently in the process of switching to Questrade. I highly recommend this. Buys are free, so you can put in smaller amounts over time (dollar cost averaging). Transfer from my TD account takes 1-2 business days.

frugal_c

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Re: Canada: buying Vanguard ETFs
« Reply #9 on: November 13, 2015, 06:30:49 PM »
Sorry to hijack the thread, but this seems relevant.

I have been looking at various US & international vanguard/ishares ETFs and have noticed that they consistently pay lower dividends than their american counterparts.  Has anyone else noticed this?  For instance the US listed S&P500 etf SPY has paid out around 2% at current prices over the past year, the ishares and vanguard equivalent or more like 1.6-1.7%.    Is this a result of higher fees on the Canadian side?   It is not just the S&P500 either, I have seen this quite consistently on international ETFs.

I am just trying to understand if there is some other explanation.  I know the canadian dollar has fluctuated in value but that shouldn't affect the dividend % payout.  Is there some other factor?

okits

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Re: Canada: buying Vanguard ETFs
« Reply #10 on: November 13, 2015, 07:19:03 PM »
Sorry to hijack the thread, but this seems relevant.

I have been looking at various US & international vanguard/ishares ETFs and have noticed that they consistently pay lower dividends than their american counterparts.  Has anyone else noticed this?  For instance the US listed S&P500 etf SPY has paid out around 2% at current prices over the past year, the ishares and vanguard equivalent or more like 1.6-1.7%.    Is this a result of higher fees on the Canadian side?   It is not just the S&P500 either, I have seen this quite consistently on international ETFs.

I am just trying to understand if there is some other explanation.  I know the canadian dollar has fluctuated in value but that shouldn't affect the dividend % payout.  Is there some other factor?

Would foreign tax withholding be a factor?

frugal_c

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Re: Canada: buying Vanguard ETFs
« Reply #11 on: November 13, 2015, 07:34:20 PM »
Thanks okits.  I read into it after your post and you might be right.  Apparently you are supposed to hold international ETF's via US listed ETFs when held in an RRSP.   Kind of a hassle converting but so be it.

okits

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Re: Canada: buying Vanguard ETFs
« Reply #12 on: November 13, 2015, 07:52:18 PM »
Thanks okits.  I read into it after your post and you might be right.  Apparently you are supposed to hold international ETF's via US listed ETFs when held in an RRSP.   Kind of a hassle converting but so be it.

I think it only matters with the U.S. equities.  I didn't want to be bent over by Questrade's exchange rate premium, nor mess around trying Norbert's Gambit, so I'm in CAD-wrapped versions and losing the foreign tax withholding.  Remains to be seen if that was smart or dumb...

frugal_c

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Re: Canada: buying Vanguard ETFs
« Reply #13 on: November 13, 2015, 08:23:22 PM »
I have done norberts gambit in the past, not to big of a deal but u have to call in.

Heckler

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Re: Canada: buying Vanguard ETFs
« Reply #14 on: November 13, 2015, 08:48:39 PM »

Goldielocks

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Re: Canada: buying Vanguard ETFs
« Reply #15 on: November 13, 2015, 11:29:09 PM »
Just a could of points. 1. Don't hold non cdn dividend funds in your tfsa because they are not tax advantaged like you would think and there is lots of paperwork. RRSP is ok.

2. If you buy a U.S. Fund, whether in cdn or US dollars, you pay an exchange fee spread to convert currencies, to the bank which can be 2.5 to 3 percent for smaller amounts.   This is because RRSPs need to have the contributions in cdn funds, as they are initially made.

curlyfry

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Re: Canada: buying Vanguard ETFs
« Reply #16 on: November 13, 2015, 11:41:06 PM »
I'm also Canadian & using Couch Potato Strategy with Questrade Vanguard ETFs

If you want to get to get a bonus of $25 with opening a Questrade account you can use my QPass referral code 805922536388138   

Wish I had used a code when I opened an account

I also bought a few single stocks for fun but now regret it as it's a lot more work when I'm updating my net worth accounts - didnt' think of that at the time.