- Six ETFs to receive new names
- Access to China A-shares proposed for Vanguard FTSE Emerging
Markets Index ETF and Vanguard FTSE All-World ex Canada Index
ETF
- Management fee reductions announced for Europe and Asia Pacific ETFs
- Two existing developed markets ETFs to provide exposure to
Canada and exclude only the
U.S.
- Preliminary prospectus filed for two new developed markets ETFs
that would exclude both Canada and
the U.S.
TORONTO, June 2, 2015 /PRNewswire/ -- Vanguard
Investments Canada Inc. today announced a series of changes to its
Canadian ETF line-up. The firm is proposing to broaden the
diversification of six Vanguard TSX-listed international equity
index ETFs and move them to all-capitalization benchmarks. The
proposed changes, which would occur over several months, will also
give Vanguard FTSE Emerging Markets Index ETF and Vanguard FTSE
All-World ex Canada Index ETF exposure to China A-shares.
Currently, no similar broad-based TSX-listed index ETFs offer
access to these shares.
These proposed changes are subject to receipt of all required
unitholder approvals*, and follow closely index changes to the
U.S.-listed Vanguard ETFs in which the six Vanguard TSX-listed ETFs
invest. The ETFs will move from FTSE benchmarks containing large-
and mid-capitalization stocks to broader FTSE benchmarks that
include small-capitalization stocks. If the proposed changes are
approved, Vanguard will rename the affected TSX-listed ETFs. The
ETF ticker symbols will remain unchanged. The following table
summarizes the proposed benchmark and name changes.
Vanguard
ETFTM
|
TSX
ticker
|
Current FTSE
benchmark
|
Proposed FTSE
benchmark
|
Proposed new
name
|
Vanguard FTSE
Emerging Markets
Index ETF
|
VEE
|
FTSE Emerging
Index
|
FTSE Emerging
Markets All Cap
China A Inclusion Index**
|
Vanguard FTSE
Emerging Markets All
Cap Index ETF
|
Vanguard FTSE
All-
World ex Canada
Index ETF
|
VXC
|
FTSE All-World ex
Canada Index
|
FTSE Global All
Cap
ex Canada China A Inclusion Index
|
Vanguard FTSE
Global All Cap ex
Canada Index ETF
|
Vanguard FTSE
Developed Europe
Index ETF
|
VE
|
FTSE Developed Europe
Index
|
FTSE Developed
Europe All Cap Index
|
Vanguard FTSE
Developed Europe All
Cap Index ETF
|
Vanguard FTSE
Developed Asia Pacific Index ETF
|
VA
|
FTSE Developed Asia
Pacific Index
|
FTSE Developed
Asia Pacific All Cap Index
|
Vanguard FTSE
Developed Asia
Pacific All Cap Index
ETF
|
Vanguard FTSE
Developed ex North America Index ETF
|
VDU
|
FTSE Developed
ex North America Index
|
FTSE Developed
All
Cap ex US Index
|
Vanguard FTSE
Developed All Cap ex
US Index ETF
|
Vanguard FTSE
Developed ex North America Index ETF
(CAD-hedged)
|
VEF
|
FTSE Developed
ex North America Hedged
CAD Index
|
FTSE Developed
All
Cap ex US Hedged
CAD Index
|
Vanguard FTSE
Developed All Cap ex US Index ETF (CAD-hedged)
|
All-cap exposure
Exposure to small-caps will move
investors in the TSX-listed ETFs closer to complete global
market-cap weightings and provide broader diversification.
Small-cap stocks will account for approximately 10% of each
benchmark.
"We believe this will benefit investors because an all-cap
approach produces more complete exposure to the respective markets
and increases diversification," said Atul
Tiwari, managing director of Vanguard Investments Canada
Inc.
The ETFs will join Vanguard FTSE Canada All Cap Index ETF (TSX
ticker: VCN), Vanguard U.S. Total Market Index ETF (TSX ticker:
VUN), Vanguard U.S. Total Market Index ETF (CAD-hedged) (TSX
ticker: VUS), Vanguard FTSE Canadian High Dividend Yield Index ETF
(TSX ticker: VDY) and Vanguard FTSE Canadian Capped REIT Index ETF
(TSX ticker: VRE), in offering investors all-cap exposure.
China A-shares
Through the addition of China A-shares
to the U.S.-listed Vanguard FTSE Emerging Markets ETF (NYSE: VWO),
investors in the TSX-listed Vanguard FTSE Emerging Markets Index
ETF and Vanguard FTSE All-World ex Canada Index ETF will gain
exposure to a key emerging economy and the second-largest share
market in the world by market cap.
The new benchmark for the TSX-listed Vanguard FTSE Emerging
Markets Index ETF includes China A-shares at around a 6% weighting,
and the new benchmark for the Vanguard FTSE All-World ex Canada
Index ETF includes the shares at an approximately 0.55%
weighting. Vanguard recently received a quota for China A-shares,
which provide exposure to China's
largest issuers and a level of diversification that isn't otherwise
accessible in the market. ***
"As the first broad-market Canadian ETFs to announce exposure to
China A-shares, the funds will benefit investors with more
diversification, deeper emerging markets exposure and greater
access to the growth potential of Chinese equities," Mr. Tiwari
said.
Existing developed markets ETFs
Management fee
reductions to 0.20% from 0.23% for the Vanguard FTSE Developed
Europe Index ETF and Vanguard FTSE Developed Asia Pacific Index ETF
became effective June 1, 2015.
Additionally, Vanguard FTSE Developed ex North America Index ETF
and Vanguard FTSE Developed ex North America Index ETF (CAD-hedged)
will now offer all-cap exposure to developed markets excluding only
the U.S., and will be renamed accordingly. The new target benchmark
for the two ETFs will include Canada as an 8% weighting.
New developed markets ETFs
Vanguard Investments Canada
Inc. filed a preliminary prospectus with the Canadian securities
regulators for two new developed market ETFs: Vanguard FTSE
Developed All Cap ex North America Index ETF and Vanguard FTSE
Developed All Cap ex North America Index ETF (CAD-hedged). These
ETFs would follow the FTSE Developed All Cap ex North America
Index, and FTSE Developed All Cap ex North America Hedged to CAD
Index.
The proposed ETFs have an estimated management fee of 0.20%.
They would provide investors with exposure to developed markets
excluding both Canada and the
U.S., and would follow all-capitalization benchmarks. The new
offerings would bring to 23 the number of ETFs offered by Vanguard
Investments Canada Inc.
Additional transition details
The management fees paid
by investors in the affected TSX-listed ETFs will range from 0.20%
to 0.25%. New management expense ratios (MERs) will be recalculated
for interim Management Reports of Fund Performance (MRFPs) as at
the end of June 2015.
The benchmark changes will be staggered over several months in
order to ensure an orderly and cost effective transition.
Additionally, Vanguard FTSE Emerging Markets Index ETF, Vanguard
FTSE Developed ex North America Index ETF and Vanguard FTSE
Developed ex North America Index ETF (CAD-hedged) will each follow
a transition index for a short period. Vanguard will issue a press
release when each ETF begins to track its new index.
Vanguard Investments Canada Inc. does not expect the transitions
to result in capital gains distributions to the ETFs'
unitholders.
About Vanguard
Vanguard Investments Canada Inc. is a
wholly owned indirect subsidiary of The Vanguard Group, Inc. and
manages $5 billion (CAD) in assets.
The Vanguard Group, Inc. is one of the world's largest investment
management companies and a leading provider of company-sponsored
retirement plan services. Vanguard manages more than $3.3 trillion (USD) in global assets, including
more than $470 billion (USD) in
global ETF assets. Vanguard has offices in the United States, Canada, Europe, Australia and Asia. The firm offers more than 160 funds to
U.S. investors and more than 100 additional funds, including ETFs,
to clients in the other markets in which the firm operates.
Vanguard operates under a unique operating structure. Unlike
firms that are publicly held or owned by a small group of
individuals, The Vanguard Group, Inc. is owned by Vanguard's
U.S.-domiciled funds and ETFs. Those funds, in turn, are owned by
Vanguard clients. This unique mutual structure aligns Vanguard
interests with those of its investors and drives the culture,
philosophy, and policies throughout the Vanguard organization
worldwide. As a result, Canadian investors benefit from Vanguard's
stability and experience, low-cost investing, and client focus. For
more information, please visit vanguardcanada.ca.
* The Manager has the discretion not to proceed with any of the
proposed changes if it considers it to be in the best interest of
unitholders to not implement the change.
** FTSE Emerging Markets All Cap China A Inclusion Index
comprises large-, mid- and small-cap securities of the FTSE
Emerging All Cap Index and FTSE China A All Cap Index. The weight
of the FTSE China A All Cap Index in the FTSE Emerging Markets All
Cap China A Inclusion Index will be adjusted by the quota available
to international investors.
***China A-shares quota obtained by Vanguard Investments
Australia through a Renminbi Qualified Foreign Institutional
Investor (RQFII) license.
All asset figures are as of May 31,
2015, unless otherwise noted.
Commissions, management fees and expenses all may be
associated with the Vanguard ETFs™. The Canadian ETFs are only
offered by prospectus. The prospectus contains important detailed
information about the securities being offered. Copies are
available from Vanguard Investments Canada Inc. at
www.vanguardcanada.ca. Please read the prospectus before investing.
ETFs are not guaranteed, their values change frequently, and past
performance may not be repeated.
A preliminary prospectus relating to Vanguard FTSE Developed
All Cap ex North America Index ETF and Vanguard FTSE Developed All
Cap ex North America Index ETF (CAD-hedged) (the "Vanguard ETFs")
has been filed with certain Canadian securities commissions or
similar authorities. You cannot buy units of the Vanguard ETFs
until the relevant securities commissions or similar authorities
issue receipts for the prospectus of the Vanguard ETFs and until
the Vanguard ETFs have been listed for trading on TSX.
"FTSE®" is a trademark of London Stock Exchange Group companies
and is used by FTSE under licence. These trademarks have been
licenced for use by Vanguard. None of the Vanguard ETFs are
sponsored, endorsed, sold or promoted by any of the aforementioned
trademark owners and the related index providers and their
respective affiliates or their third party licensors and these
entities bear no liability and make no claim, prediction,
representation, warranty or condition regarding the advisability of
buying, selling or holding units in the Vanguard ETFs.
All investments, including those that seek to track indexes, are
subject to risk, including the possible loss of principal.
Diversification does not ensure a profit or protect against a loss
in a declining market. While ETFs are designed to be as diversified
as the original indexes they seek to track and can provide greater
diversification than an individual investor may achieve
independently, any given ETF may not be a diversified
investment.
SOURCE Vanguard Investments Canada Inc.