We have developed this FAQ to use as a guide to help answer certain questions you may have regarding Vanguard and/or our investment funds. If you have any additional questions, we recommend you consult a financial advisor and/or tax advisor for financial and/or tax information applicable to your specific situation.

How to buy/invest

How can I buy Vanguard Canada ETFs and mutual funds?

You can buy Vanguard ETFs with the help of a financial advisor, or through an online brokerage account.

You can buy Vanguard mutual funds with the help of a financial advisor, or through an account with the online brokerages indicated with an asterisk below.

Online brokerages

BMO InvestorLine National Bank Direct brokerage
Canadian ShareOwner (Wealthsimple) Qtrade Investor
CIBC Investor’s Edge Questrade
Desjardins Online Brokerage RBC Direct Investing
HSBC InvestDirect Scotia iTrade
Interactive Brokers TD Direct Investing
Laurentian Bank Discount Brokerage Virtual Brokers
What is the benefit of working with a financial advisor and how can I find one?

Many investors find working with a professional financial advisor helpful, especially as they build wealth and their financial situation becomes more complex. An experienced financial advisor provides customized portfolio management and discipline, which can better position investors to reach their short- and long-term needs. A good financial advisor will also look beyond investments to offer guidance on taxes, retirement, estate planning, insurance, education planning and more.

If you don't have a financial advisor, ask your network for referrals or choose one through the Investment Industry Regulatory Organization of Canada or the Mutual Fund Dealers Association of Canada. From each site's homepage, select the Investors tab.

Is there a minimum investment required when buying your ETFs?

Unlike our mutual funds, ETFs do not have any minimum investment requirements as the units of an ETF are traded like any other security. Investors can purchase a minimum of one unit of any ETF with the help of a professional financial advisor or through an online brokerage account. Please note that most online brokerages charge a flat or minimum commission, so investors should consider the impact of fees, especially on small purchases of ETF units.

Can you please stop sending me paper versions of the opt-in letter?

On an annual basis, securities regulators require investment fund managers, such as Vanguard, to notify/inform all investors in writing of the options to obtain a copy of an investment fund’s financial statements and/or management reports of fund performance (MRFPs) twice a year.

Distributions

How do I determine the distribution amount per share and payout frequency?

To find the most recent distribution amount and payout frequency of an ETF or mutual fund:

  • Visit our home page: www.vanguardcanada.ca
  • Click on ‘Investments’ and select “All products”
  • Click on the ETF or mutual fund of your choice
  • Under the ‘KEY FUND FACTS’ section on the left-hand side of the page (located under the MER), you will find the dividend schedule, as well as the most recent amount distributed under “Income distribution per unit”.
Where can I find the historical distribution history of an ETF or mutual fund?

To find the historical distributions of an ETF:

  • Visit our home page: www.vanguardcanada.ca
  • Click on ‘Investments’ and select ‘All products’
  • Click on the ETF or mutual fund of your choice
  • Click on the “Prices & distributions” tab
  • Scroll down and you will see the “distribution history” for the fund since inception
Where can I find the distribution schedule for an ETF or mutual fund?

To find distribution schedules:

  • Visit our home page: www.vanguardcanada.ca
  • Click on ‘Investments’ and ‘All products’
  • Click on the ETF or mutual fund of your choice
  • Under the “DOCUMENTS” section on the right-hand side of the page, you will see a link to a PDF copy of the distribution schedule for the fund

Product

Which of your investment products would you recommend?

Making an investment product choice is dependent on many factors including your risk tolerance and investment goals. At this time, we have not yet sought registration to allow us to provide financial advice, including recommendations on investment products, to individual investors. For investment product advice, we recommend you speak with a professional financial advisor.

How can I set up RRSP and TFSA accounts through Vanguard?

We don’t sell our products directly to investors or manage investment accounts in Canada at this time. However, you can buy our products with the help of a financial advisor or through an online brokerage account.

Can I invest in target-date funds?

Our target-date funds are only available through employer-sponsored group pension plans and not available to individual investors. For recommendations on alternatives, we recommend you speak with a professional financial advisor.

What’s the difference between a currency-hedged product and an unhedged product?

Foreign securities often trade and pay dividend or interest in the currency of their local markets. When Canadian investors hold unhedged ETFs with foreign securities, the investment return is impacted by currency movements. If the Canadian dollar strengthens against the foreign currency, that currency will buy fewer dollars and the return will be lower. If the foreign currency appreciates compared with the Canadian dollar, the return would be higher. This uncertainty is called currency risk.

Hedging exposure in investment products such as mutual funds or ETFs allows the product to reflect more closely the performance of international stocks or bonds in local currencies, without the daily ups and downs of exchange rates that would be associated with converting that performance into Canadian dollars. On the other hand, currency hedging transactions may incur extra expenses, may not perfectly offset foreign currency exposures, and may eliminate any benefit from favourable fluctuations in those currencies.

Are your products DRIP eligible?

A distribution reinvestment plan (DRIP) reinvests cash distributions without charging a commission. Our ETFs are DRIP eligible; our mutual funds are not.

Under the plan, ETF distributions are reinvested to buy more units of the same product. You pay no commissions, and fund distributions stay in the market (unlike cash).

To enroll, speak with your financial advisor or online brokerage firm.

Are your products PAC eligible?

A pre-authorized contribution (PAC) or pre-authorized cash contribution (PACC) plan allows investors to contribute to a fund at regular intervals, such as monthly. Vanguard mutual fund investors can establish these plans through their fund dealer. Vanguard ETFs are not PAC or PACC eligible.

Are your products Systematic Withdrawal Program (SWP) eligible?

A systematic withdrawal plan (SWP) allows investors to withdraw from a fund on a regular basis. Vanguard mutual fund investors can establish a SWP through their fund dealer. Vanguard ETFs are not SWP eligible.

Does Vanguard have an investment product focused on ESG (environmental, social and governance) considerations?

No. As a steward of lifetime savings for more than 30 million people around the world, Vanguard takes a long-term view in the companies that we invest in to ensure their environmental, social and governance processes are strong. That’s why we regularly engage with companies on these topics, as well as with organizations and initiatives such as the Sustainability Accounting Standards Board, Task Force on Climate-related Financial Disclosures, and UN PRI–among others.

Fees

What fees do I need to pay Vanguard for your ETFs and Mutual Funds?
  • Each ETF pays a management fee plus the harmonized sales tax (HST) to Vanguard Investments Canada Inc. The management fee is calculated and accrued daily and is paid monthly. This management fee covers, at least in part, Vanguard’s costs associated with acting as the trustee and manager of the ETF, the fee payable to the sub-advisor for its portfolio management services and the other fees and expenses of the fund (e.g. fees payable to the custodian, registrar and transfer agent, as well as fees payable to other service providers). At this time, no other fees and expenses are charged to the ETFs.  
  • Each mutual fund pays a management fee plus the harmonized sales tax (HST). The maximum rate of the management fee payable by Vanguard Mutual Funds is 0.50% of NAV (net asset value) for Series F.

At Vanguard we are committed to low costs, which has not just benefited our investors, but also helped drive down costs across the Canadian ETF industry. Since Vanguard entered the Canadian market 2011, Canadian investors have realized nearly $10 million in cumulative savings through expense reductions on our ETFs.

What is the Management Expense Ratio (MER)?

A Management Expense Ratio (MER) represents the combined total of the management fee, operating expenses and taxes charged to a fund during a given year expressed as a percentage of a fund’s average net assets for that year.

Do I need to pay an additional fee for your asset allocation ETFs (i.e. is there double charging with the underlying funds)?

No. There is no duplication of management fees chargeable in connection with the asset allocation ETFs. Investors only pay the stated management fee of the asset allocation ETF. Investors do not pay the management fees of the underlying funds.

For your Canadian ETFs that wrap Canadian and/or U.S. listed ETFs, do you charge the management fees of the underlying Canadian and/or U.S. listed ETFs, in addition to the management fee for the top Canadian ETF?

No. There is no duplication of management fees chargeable in connection with a Canadian ETF that wraps Canadian and/or U.S. listed ETFs. Investors only pay the stated management fee of the top Canadian ETF. Investors do not pay the management fees of the underlying funds.

Tax

If I buy a U.S. market ETF on the TSX for my RRSP or TFSA, is it subject to the U.S. withholding tax on the distributions? If so, does it apply only to the capital gains portion of the distribution?

When Canadian ETFs receive distributions from U.S. securities, tax will be withheld. A portion of foreign withholding taxes paid by a fund can be designated as foreign tax credits when foreign income is distributed. Investors may claim foreign tax credits when they file their tax returns.

Any foreign non-business income distributed by a Canadian Vanguard ETF will be reflected in the T3 tax form that your broker provides.

There is no withholding tax on capital gains in the U.S. Capital gains distributions are generally not subject to withholding tax.

Note that tax reporting is not required for investments in RRSPs or TFSAs.

You can find more information here.

Is there a tax or investment advantage to purchasing the Canadian rather than the U.S. version of your ETFs?

Depending on your tax status and financial situation, certain investments may be more preferred than the others. Please consult a financial advisor and/or tax advisor for financial and/or tax information applicable to your specific situation.

Should I invest a U.S. ETF in my Canadian or U.S. RRSP account for tax advantage purposes?

Depending on your tax status and financial situation, certain investments may be more preferred than the others. Please consult a financial advisor and/or tax advisor for financial and/or tax information applicable to your specific situation.

If I buy a Canadian bond ETF, do I have to pay tax?

Depending on your tax status, certain investments and distributions may be subject to tax. Please consult a financial advisor and/or tax advisor for financial and/or tax information applicable to your specific situation.

How do I get the tax properties for your ETFs so I can do my income taxes?

Tax information of fund distribution is reflected in T3 tax forms. To obtain your T3 tax forms, ask your financial advisor or log-in to your online brokerage account.

I'm trying to determine whether one of your ETFs pays Foreign Non-Business Income, and if so, then to which country does one make any claim to recover any income tax withheld?

Any foreign non-business income distributed by an ETF will be reflected in the T3 tax form that your broker provides. Investors holding a U.S. ETF will receive a Form 1042-S which indicates types of income distributed.

International investing

I have a Vanguard account in the U.S. Can I transfer those funds to Vanguard Canada?

We suggest consulting with a financial advisor, tax specialist and/or accountant with expertise in Canadian and U.S. tax law. Please note that Vanguard does not offer investment management accounts directly to retail investors in Canada at this time.

How can I buy one of your U.S.-listed ETF (direct) products?

You can buy U.S.-listed ETFs with the help of a financial advisor or through an online brokerage account.

I am a Canadian citizen, living abroad. Can I still invest in Vanguard’s Canadian products?

Vanguard Canada’s products are designed for use by Canadian residents. It is usually not possible to invest in them if living outside Canada, though it can depend on your unique circumstances. We suggest consulting with a financial advisor, tax specialist and/or accountant with expertise in tax law in both Canada and your country of residence.