The following question is from reader Joe:
How do we open a Vanguard Account? I went to their website and it seems it is only for US residents.
Unfortunately, it used to be extremely difficult for a Canadian resident to open an account with Vanguard to take advantage of their popular index mutual funds. With the tightening of regulations following the tragic events of 9/11, it is probably an impossible task now.
Canadian investors interested in index mutual funds are left with two good options: the TD e-Series funds (for smaller accounts) or the CIBC Index funds (for larger accounts due to their management fee discount). While their MERs are typically higher than Vanguard’s, they are still reasonable and on the bright side, you won’t take a currency-conversion hit when investing with Canadian dollars.
If you have a brokerage account, you have a much wider range of options. Many of Vanguard’s index funds have a corresponding exchange-traded fund (ETF), which are listed and traded on U.S. stock exchanges. The Vanguard Total Stock Market ETF, for instance, is listed on the AMEX exchange under ticker symbol VTI. If you have an online broker, investing in the ETF is as simple as entering the ticker symbol and clicking the buy button. Moreover, Vanguard isn’t the only provider of ETFs. Barclay’s offers many popular ETFs through iShares in both Canada (traded on the TSX) and the U.S.
