Staff
Vanguard Investments Canada Inc. has launched a series of 10 low-cost target retirement funds for qualified institutional investors, including plan sponsors in Canada.
These funds are index-based funds that gradually and automatically shift to a more conservative asset allocation as the target date draws near.
Six new low-cost index pooled funds will make up the underlying investments for the funds.
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Here’s a breakdown.
Vanguard Index Pooled Funds
- Vanguard Canadian All-Cap Equity Index Pooled Fund seeks to track the S&P/TSX Capped Composite Index (or any successor thereto), and invests primarily in large-, mid- and small-capitalization Canadian stocks. Individual constituents are capped at 10% weight.
- Vanguard U.S. All-Cap Equity Index Pooled Fund seeks to track the CRSP US Total Market Index (or any successor thereto), and invests directly or indirectly primarily in stocks of U.S. companies.
- Vanguard Developed All-Cap ex North America Equity Index Pooled Fund seeks to track the FTSE Developed All Cap ex North America Index (or any successor thereto). It invests directly or indirectly primarily in in large-, mid-and small capitalization stocks of companies located in developed markets, excluding the U.S. and Canada.
- Vanguard Emerging Markets All-Cap Equity Index Pooled Fund seeks to track the FTSE Emerging Markets All Cap China A Inclusion Index (or any successor thereto). It invests directly or indirectly primarily in stocks of companies located in emerging markets.
- Vanguard Canada Universe Bond Index Pooled Fund seeks to track the FTSE TMX Canada Universe Bond Index (or any successor thereto). It invests primarily in public, investment-grade, fixed income securities issued in Canada.
- Vanguard Global ex Canada Fixed Income Index Pooled Fund (CAD-hedged) seeks to track the Barclays Global Aggregate ex-CAD Float Adjusted Index (CAD Hedged) (or any successor thereto). It invests directly or indirectly primarily in global investment-grade, fixed rate, fixed income markets outside Canada and uses derivative instruments to seek to hedge the foreign currency exposure of the securities included in the Barclays Global Aggregate ex-CAD Float Adjusted Index to the Canadian dollar.
Vanguard Target Retirement Fund initial asset allocations
| 2055 Pooled Fund | 2050 Pooled Fund | 2045 Pooled Fund | 2040 Pooled Fund | 2035 Pooled Fund | 2030 Pooled Fund | 2025 Pooled Fund | 2020 Pooled Fund | 2015 Pooled Fund | Income Pooled Fund | |
| Stock | 90% | 90% | 90% | 89% | 81% | 74% | 66% | 58% | 48% | 30% |
| Bond | 10% | 10% | 10% | 11% | 19% | 26% | 34% | 42% | 52% | 70% |
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This article was originally published in Benefits Canada’s companion site, Advisor.ca