Vanguard is preparing to offer a suite of exchange-traded funds in Canada, and the move is likely to set off a price war in a nation where fees have historically been high, according to reports.
“We’ve been exploring our options in the Canadian market and will soon have some news to share,” commented Vanguard spokeswoman Rebecca Katz.
Should Vanguard begin competing in Canada, its strong brand and commitment to low-cost funds will make it a formidable rival right off the bat, Dan Hallett, a fund analyst with HighView Financial Group, told The Globe & Mail.
Morningstar ETF Strategist John Gabriel agreed: “Vanguard is more than just another ETF provider. It is really going to put pressure on the entire industry—both mutual funds and ETFs—to lower fees.” Vanguard charges 60% less for its ETFs than BlackRock’s iShares, Gabriel noted.
However, BlackRock has $41 billion in exchange-traded fund assets in Canada, giving it a commanding 71% market share. Other ETF leaders in Canada include Claymore Investments, BetaPro Management and Bank of Montreal.
Beginning in 2009 with its entry into the Australian market, Vanguard in recent years has been setting its sights on a global presence; it is slated to begin offering funds in Europe later this year.
