Yesterday, Vanguard Canada filed preliminary prospectus for six Exchange-Traded Funds (ETFs). You can view the preliminary long form prospectus here. The ETFs will cover Canadian bonds, Canadian equities and International equities asset classes. The management fees and the ticker symbols for the ETFs are not known at this point.
Canadian Bonds
Vanguard Canadian Aggregate Bond ETF and Vanguard Canadian Short-Term Bond ETF are the two ETFs under this category. The Vanguard Aggregate Bond ETF will be comparable to the iShares DEX Universe Bond ETF (TSX: XBB) and the Vanguard Short-Term Bond ETF will be comparable to the iShares DEX Short-Term Bond ETF (TSX: XSB).
Canadian Stocks
Vanguard MSCI Canada Index ETF will track the MSCI Canada Index, a free float-adjusted market capitalization weighted index comprised of 100 stocks. This ETF will be comparable to the iShares S&P/TSX 60 ETF (TSX: XIU) or the BMO Dow Jones Canada Titans 60 ETF (TSX: ZCN).
International Stocks
The three international stock ETFs will cover U.S., Europe-Australia-Far-East (EAFE) and Emerging Markets. Two of them – the Vanguard MSCI US Broad Market ETF (CAD-Hedged) and the Vanguard MSCI EAFE ETF (CAD-Hedged) – are currency hedged. The Vanguard MSCI Emerging Markets ETF will cover emerging markets.
Bottom Line
The Vanguard MSCI Emerging Markets ETF will be interesting if the fees are comparable to the US-listed VWO. The other International stock ETFs in the initial line-up are likely to be disappointing for investors wanting currency unhedged exposure to US and EAFE markets. Personally, I was hoping Vanguard would introduce cheaper alternatives to existing REIT and dividend ETFs. Hopefully, these ETFs will be launched in a second wave.
