The new canadian reference for ETFs !
[updated links] Canadian Capitalist has a series of excellent posts on ETFs (the best is that it's not over yet!). He's already convinced me to switch to Vanguard Total Market (VTI) for the US. One of his reader also suggested Vanguard All World except US (VEU). VTI and VEU would give you an incredible diversity for a very low MER. I'm all for that. I'm still slightly worried about the fact that the Vanguard ETFs are in US currency (non-hedged) but CC has a good point that over the long term, currency fluctuations might even out. And a bonus is that the Canadian dollar is currently historically high.
Here are the posts so far from CC on ETFs:
4 comments:
Thanks for the plug! I took a look at VEU yesterday and found that it has a 5% exposure to Canada. I still think EFA + VWO would be a better choice.
I still disagree that you should expect that currency rates will be indifferent over the long term. Take a 10-25 year moving difference in the exchange rate and I doubt you'll find that the average change is anywhere near 0.
An expensive, but realistic way to hedge the amounts yourself is to purchase $x in US denominated ETFs and then a long position in FXC.
It would be great if Canada gets currency ETFs so you could short a US/Cdn currency ETF and then use the proceeds to buy US denominated assets, thus making you currency neutral (less MER expenses).
CC: I think you're doing a great job and it's helping a lot of people
Investoid: it's true that there can be differences ..is it worth paying the extra MER to insure against it though?
It depends on whether you want to speculate or have currency risk, or if you're want to ensure currency neutrality. That's a risk tolerance and investment expertise question that is best answered on a per-individual basis.
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