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Vanguard introduces new ‘all-in-one’ retirement and monthly income asset allocation ETF

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Vanguard Investments Canada has launched a new all-in-one and low-cost retirement income ETF, made up of eight existing low-cost underlying Vanguard index ETFs, four Vanguard equity ETFs and four Vanguard fixed income ETFs – representing  the newest addition to its line-up of asset allocation ETFs. The Vanguard Retirement Income ETF Portfolio (ticker: VRIF) began trading on the TSX today.

“As they retire, Canadians face a new set of financial challenges including keeping up with inflation, meeting their monthly spending needs and the risk of potentially outliving their assets,” says Kathy Bock, Managing Director and Head, Vanguard Investments Canada Inc. “This ETF can help manage some of those risks by providing a predictable stream of income, within a simple yet sophisticated “all-in-one” retirement solution that provides broad diversification and regular rebalancing, at a low cost.”

A recent investor poll by Vanguard found that retirement is the number one investing objective for Canadians, with 78 per cent listing it among their top two choices, followed by longer-term growth at 67 per cent. In addition, a report last year by the World Economic Forum estimates that Canadians are expected to outlive their savings by an average of 10 years, reflecting similar findings in other developed nations, necessitating the need for prudent, low-cost and well-diversified portfolios that can provide dependable income.

“Following one of the sharpest market declines in recent memory earlier this year, Canadian investors and advisors are looking to effectively safeguard and manage their hard-earned assets to meet their retirement needs,” says Scott Johnston, head of product, Vanguard Canada. “For financial advisors, this provides a scalable and transparent solution for clients as a complement to their retirement strategy. For investors, this is a one-stop globally diversified and turnkey option that provides capital appreciation and monthly tax-efficient income.”

Vanguard Retirement Income ETF Portfolio – TSX:VRIF – The Vanguard Retirement Income ETF Portfolio seeks to provide a combination of consistent income with the possibility of some capital appreciation by investing in equity and fixed income securities, made up of eight underlying Vanguard index ETFs.

“Asset allocation ETFs are one of the fastest growing investment categories in Canada, having attracted USD4.5 billion (CAD) in under three years. They have been a game-changer for investors and we are pleased to offer that same ease of use, low cost, and disciplined portfolio construction to retirees and others seeking regular monthly income,” adds Bock. “Another advantage to investors using these ETFs, is that they can rely on Vanguard’s global investment experts to monitor and assess the proper asset allocation to meet the return target.”

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