Vanguard trims fees on $1.3bn Canadian bond ETF

Feb 15th, 2018 | By | Category: Fixed Income

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Vanguard Investments Canada has lowered the management fee for one of its largest fixed income ETFs listed in Canada, reinforcing its reputation as a leading low-cost ETF provider.

Vanguard Canadian Aggregate Bond Index ETF (VAB CN) management fee has been reduced from 0.12% to 0.08%

Atul Tiwari, managing director for Vanguard Investments Canada.

The cost of the Vanguard Canadian Aggregate Bond Index ETF (VAB CN) has been reduced from 0.12% to 0.08%.

The ETF has accumulated $1.3 billion (as of 31 January 2018) in assets under management (AUM) since it first started trading on the Toronto Stock Exchange back in November 2011.

Atul Tiwari, managing director for Vanguard Investments Canada, commented, “Vanguard’s mission is to give investors the best chance for investment success, and part of that commitment is to lower the cost of investing for all Canadians. As we have recently seen, fixed-income ETFs can play a key role as a stabilizing force in a portfolio, particularly during times of stock market volatility. We are pleased investors will receive a fee reduction in one of our largest ETFs.

“Canadians are realizing that investing fees matter more than ever, particularly in the bond markets, where yields are below their historical averages and costs erode a larger share of returns than they have in the past.”

The fund tracks the Bloomberg Barclays Global Aggregate Canadian Float Adjusted Bond Index, comprising investment grade Canadian-issued securities with maturities greater than one year across the government, government-related and corporate bonds segments.

Vanguard currently has 36 ETFs in Canada, collectively holding around $14bn in AUM. The low-cost ETF provider has been expanding its presence in the region after recently launching three new multi-asset ETFs-of-ETFs at the start of this month. The following ETFs all come with 0.22% management fees and are among the lowest cost in their categories:

  • The Vanguard Conservative ETF Portfolio (VCNS CN) provides a combination of income and moderate long-term capital growth by investing with a strategic allocation of 40% equities and 60% fixed income.
  • The Vanguard Balanced ETF Portfolio (VBAL CN) provides long-term capital growth with a moderate level of income by investing with a strategic allocation of 60% equities and 40% fixed income.
  • The Vanguard Growth ETF Portfolio (VGRO CN) provides long-term capital growth by investing with a strategic allocation of 80% equities and 20% fixed income.
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