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," said Vanguard spokeswoman Rebecca Katz.
Vanguard's strong brand and commitment to low-cost funds will make it a formidable rival right off the bat, said Dan Hallett, a fund analyst with HighView Financial Group.
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.
ICI Urges DOL to Make Electronic Delivery Default
The Investment Company Institute has asked the Department of Labor's Employee Benefits Security Administration to make electronic delivery the default method of communicating with 401(k) plan participants, unless a shareholder expressly asks to receive paper delivery.
Noting that technology has changed dramatically over the past decade, the ICI also says that electronic delivery is a more secure and less expensive method of communicating with shareholders.
Nine in 10 U.S. households have Internet access, and among households owning defined contribution plans, 96% have Internet access, the ICI said.
"The Department should establish general standards for electronic delivery, not prescriptive rules or safe harbors that soon will be outdated as technological innovations spread and access to the Internet becomes even more universal," the ICI said. "Electronic communication will become more pervasive in all areas of life."
58% of Investors Have Lost Faith in Stock Market
The financial crisis has, in fact, had a lasting impact on investors, a Prudential Financial survey of 1,274 Americans shows.
Fifty-eight percent said they have lost faith in the stock market and 44% said they are unlikely to ever again invest in stocks. In addition, many said they are investing more conservatively coming out of the financial crisis. Only 37% said they have aggressive portfolios, down from 46% prior to the recession. Forty percent said they have a conservative portfolio, up from 33% before the recession.
Nonetheless, a majority is worried about making up for losses incurred due to the financial crisis.
Quote of the Week
â€œMutual fund investors are beginning to behave much more like institutional investor and are just as focused on managing risks as they are on generating good returns.â€
- Judy Rice