How to invest

Vanguard Investments Canada is an indirect subsidiary of one of the world's largest global investment management companies, The Vanguard Group, Inc. What sets Vanguard apart—and lets Vanguard put investors first around the world—is the ownership structure of The Vanguard Group, Inc., in the United States. Rather than being publicly traded or owned by a small group of individuals, The Vanguard Group is owned by Vanguard's U.S.-domiciled funds and ETFs. Those funds, in turn, are owned by their investors. The unique mutual structure aligns our interests with those of our 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 costs and client focus.

No. Vanguard ETFs are traded on Toronto Stock Exchange (TSX) and can be purchased with the help of a financial advisor or through a self-directed brokerage account.

Vanguard ETFs are traded on TSX and can be purchased with the help of a financial advisor or through a self-directed brokerage account.

We are not permitted to recommend investment products to individual investors. You may, however, use our Compare products and costs tools to compare the characteristics of investment products from Vanguard and other fund families and ETF providers, to simulate the effects of expenses on returns over time and to determine which product best suits your investment needs. Alternatively, you can contact your financial advisor, if you have one, or your financial institution.

Foreign companies trade and pay dividends in the currency of their local markets. When Canadian investors receive those dividends or sell the investment, the cash they receive must be converted into Canadian dollars. 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 is strong compared with the Canadian dollar, the return would be higher. This uncertainty is called currency risk.

In investing, a hedge is a form of protection from the effects of a transaction—whether gains or losses—by taking a position in one type of investment to offset the risk of another security, less the execution cost of employing the hedge. One common use of hedging is to mitigate currency risk.

Hedging exposure in investment products such as ETFs allows the ETFs 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 incur extra expenses, may not perfectly offset foreign currency exposures, and may eliminate any chance to benefit from favourable fluctuations in those currencies.

Canadian investors should consider several factors beyond total expense ratios when choosing between equivalent mandates on U.S. and Canadian exchanges, including spreads, commissions and other transaction costs, and whether the ETF is held in a taxable or tax-advantaged account.

In most cases, we believe that Canadian investors are more inclined to buy Canada-domiciled ETFs because of foreign exchange conversion charges and a desire to avoid U.S. estate taxes.

Each of our ETFs lists a management fee and a slightly higher management expense ratio (MER).

• The management fee is equal to the fee paid by the ETF to Vanguard Investments Canada Inc. The management fee covers fees payable to the ETF's custodian (which holds the ETF's assets in safekeeping), registrar and transfer agent (which maintains the list of unitholders and processes the ETF's purchases and redemptions), as well as fees payable to other service providers, including the index provider. Vanguard Investments Canada does not receive a fee for providing its services as trustee.
• The MER adds the harmonized sales tax (HST) and operating expenses to the management fee.

The total expenses of each Vanguard ETF are made up of the MER and the total commissions and portfolio transaction costs incurred to manage the investment portfolio of the Vanguard ETF. Since Vanguard ETFs are index based, each Vanguard ETF's total expenses are expected to be substantially similar to the MER.

Vanguard's distribution reinvestment plan (DRIP) reinvests Vanguard ETF cash distributions without charging a commission. Under the plan, distributions are reinvested to buy more units of the same ETF. You pay no commissions, and fund distributions stay in the market (unlike cash). To enroll, simply tell your financial advisor, broker, dealer or other financial institution before the ETF's distribution record date. Once you've enrolled, your distributions will automatically be reinvested into units purchased on the open market in the five business days following the distribution payment date. You'll receive your new units on or about the sixth business day after the applicable distribution date.

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 ETFs are not PAC eligible.