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Vanguard launches low-cost ETFs and distribution reinvestment programme


Five new Vanguard exchange-traded funds have begun trading on the Toronto Stock Exchange, broadening to 11 the firm’s family of low-cost, disciplined, diversified and long-term oriented ETFs.

The news funds are: Vanguard FTSE Canadian High Dividend Yield Index ETF; Vanguard FTSE Canadian Capped REIT Index ETF; Vanguard S&P 500 Index ETF (CAD-hedged); Vanguard S&P 500 Index ETF; and Vanguard Canadian Short-Term Corporate Bond Index ETF.

Vanguard Investments Canada’s initial line-up of six ETFs was listed on TSX on 6 December 2011, and has attracted more than CAD344m in total assets. With the addition of the five new ETFs, Vanguard’s 11 ETFs will feature a low average management fee of 0.23 per cent.

“This expansion of our quality, low-cost ETF family provides investors with greater choices and brings lower cost ETFs to the market,” says Atul Tiwari, managing director of Vanguard Investments Canada. “Investors are smart. They are gravitating toward products that offer the best combination of low costs and broad diversification. They realise that costs eat away at returns and keeping costs low is important to building wealth.”

Vanguard is also introducing a Distribution Reinvestment Program (DRIP) that is designed to help investors build wealth over time.

“Reinvesting distributions—whether dividends from stocks, or interest from bonds—puts time and compounding to work for the investor,” says Jason McIntyre, head of distribution for Vanguard Investments Canada. “Through our new, commission-free reinvestment programme, investors can now automatically reinvest distributions from ETFs into more ETF units.”

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