How much do you know about financial independence?

L[HTML_REMOVED]G Tracker Trust ISA

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Sorry for the unsolicited lesson in the result of fees, but do you see the ~ 100 GBP difference over the past four years in the value of the fund to the FTSE index? (Red line vs green line at Dec 2016) That's the cost of 1.15% in fees every year.

In contrast, you have the Vanguard UK alternative which charges 0.08% ongoing with a 0.2% entrance fee. Same index as your fund, but you wont lose 25 GBP per 1000 per year of growth.

Food for all of our money trees.

https://www.vanguard.co.uk/uk/portal/detail/mf/overview?portId=9156[HTML_REMOVED]assetCode=EQUITY##overview

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000LWVH

My morningstar link is the Institutional class fund because the investor class fund I linked in Vanguard UK wasn't showing up on Mstar. I suspect the difference is even less fees if you have more than 10k.

Over 5 years, $100 becomes $144.7 or $151.4 with the same index but different fees.

Put another way $100,000 becomes $144,700 or $151,400 - that's $6,700 I'd rather have in my pocket.

On a $40k account over 30 years these two funds will be ~$3k different in value with the same risk level. (Very rough numbers based on $100/1000 over 4 years)

Then go to the advanced graph to see the long term effect.

The Vanguard fund is only 7 years old, so you can't do a 10 year comparison - only 5 years. But you can see how the Vanguard fund tracks the index, whereas higher fee funds diverge greater over time.

This is the analysis that got me out of high fee mutual funds that don't meet their benchmark index

Granted, if it results in Canadian capital gains taxes, the switch likely isnt worth it. But what will you buy in your TFSA?

Thanks for the feedback Heckler, really appreciated. My focus at the moment is to get a definitive answer on whether this fund has actually generated any annual reportable income for me.

(An ISA is very similar to a TFSA (but with a much larger annual contribution room) and I have no idea whether that Vanguard fund would qualify or whether I would even be able to switch. The ISA may be frozen but I'd have to check, and anyway, it would make more sense within a TFSA anyway)

6061, I havent read it (stopped at "get professional help"), but this might lead to better info.

http://canadianmoneyforum.com/showthread.php/65170-Canadian-Moving-to-UK/page3#/topics/65170?page=1[HTML_REMOVED]_k=r1df62

Thanks for the feedback Heckler, really appreciated. My focus at the moment is to get a definitive answer on whether this fund has actually generated any annual reportable income for me.

(An ISA is very similar to a TFSA (but with a much larger annual contribution room) and I have no idea whether that Vanguard fund would qualify or whether I would even be able to switch. The ISA may be frozen but I'd have to check, and anyway, it would make more sense within a TFSA anyway)

Well, to answer my own question, I spoke to the ISA fund managers who said the fund operates on "accumulation units" basis and that no individual receives dividends or interest or extra shares but dividends and interest are re-invested in the fund to increase the overall wealth. As I don't get any more shares, it's the rise in unit price per share which increases.

Also, I spoke to the CRA and I told them the above and they said I don't need to declare anything until I actually sell - then I'll need to declare Capital Gains. At which point, I'll definitely need specialist advice….

(Oh, Heckler, I did read that link - again, thanks!)

Im sure this has been asked at least a dozen times… but…

What ETF's do you guys use to invest in the indexes?

Particularly interested in owning the S[HTML_REMOVED]P500 but preferably traded on TSX.

Basically - who is your go to supplier of ETFs listed in Canada?

Appreciate all input.

Heckler supplies the ETF, you supply the bankroll.

Im sure this has been asked at least a dozen times… but…

What ETF's do you guys use to invest in the indexes?

Particularly interested in owning the S[HTML_REMOVED]P500 but preferably traded on TSX.

Basically - who is your go to supplier of ETFs listed in Canada?

Appreciate all input.

When it comes to a US S[HTML_REMOVED]P 500 index fund I went with TSE:VFV because it closely tracks the index, has low management fee, isn't CAD-hedged so you get some US currency exposure despite the fund being traded in CAD on the TSX. The usual suspect for tracking american stocks/indexes is SPDR but they are in USD and listed on NYSEARCA or whatever it is called.

For tracking the TSX I went with TSE:VDY which is a Vanguard High Dividend Fund. I compared it against all it's rivals like TSE:XEI, TSE:XTR, TSE:FIE and a bunch of others and when you chart it out and factor in dividend growth and low management fees and how closely they follow the underlying index TSE:VDY comes out way ahead. Costs about $12k worth to get one unit per month on a DRIP.

Typically if you just want to be a passive index fund investor go for a low fee fund from Vanguard.

If you prefer not to go for an index fund and want to be a bit more speculative iShares is the go-to ETF company for Canada, they have an ETF for just about everything under the sun. All the other ones like Horizon, and BMO etc are fairly crappy versus iShares and Vanguard Canada IMO.

I use VCN all cap for Canada. What about your global diversification? Don't get pigeon holed into Canada's bank and oil industry which makes up most of the TSX.

For US allcap, it's TSX:VUN for ~3600 US companies. VUN simply holds NYSE:VTI.

You're better off owning VTI to reduce US taxes on dividends by 15%, but only if you use Norberts gambit to exchange to USD cheaply.

Heckler supplies the ETF, you supply the bankroll.

My personal recommendations come via the Caymans, but we have a 6 million minimum buyin.