Vanguard funds for Canadian investors

Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. It manages over $1 trillion U.S. in 150 mutual funds.

Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S. because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces.

Canadians can, however, buy Vanguard exchange-traded funds (ETFs) that are listed on U.S. stock exchanges. We don’t recommend all of the Vanguard index funds, but here are two that we do see as low-fee buys:

VANGUARD EMERGING MARKETS ETF $38.53 (New York symbol VWO; buy or sell through brokers) aims to track the MSCI Emerging Markets Index, which is made up of common stocks of companies located in emerging markets around the world. The fund has an MER of 0.27%.

The funds’s top holdings are China Mobile (China: wireless), Gazprom (Russia: gas utility), Samsung Electronics (South Korea: electronics), Teva Pharmaceutical Industries, America Movil SA de CV (Latin America: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), China Construction Bank, China Life Insurance Co. and Industrial and Commercial Bank of China.

The $22.1-billion Vanguard Emerging Markets ETF’s largest holdings by country are: China (18.4%), Brazil (14.8%), South Korea (13.5%), Taiwan (11.2%), South Africa (7.6%), India (7.5%), Russia (6.1%), Mexico (4.6%), Israel (3.0%), Malaysia (2.9%), Indonesia (1.9%), Turkey (1.7%), Chile (1.4%), Thailand (1.4%), Poland (1.3%), Czech Republic (0.6%), Hungary (0.6%), Philippines (0.5%), Peru (0.4%), Egypt (0.3%), Cayman Islands (0.1%) and Colombia (0.1%).

Vanguard Emerging Markets ETF is a buy for aggressive investors.

VANGUARD GROWTH ETF $49.28 (New York symbol VUG; buy or sell through brokers) aims to track the MSCI U.S. Prime Market Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund has an MER of just 0.15%.

The $14.0-billion fund’s top holdings are Microsoft, IBM, Apple Inc., Cisco Systems, Wal-Mart Stores, Google Inc., Hewlett-Packard, Procter & Gamble, Philip Morris International and PepsiCo.

Vanguard Growth ETF is broken down by economic segment as follows: Information Technologies (34.2%), Health Care (15.5%), Consumer Staples (14.7%), Consumer Discretionary (11.9%), Industrials (7.9%), Energy (6.3%), Financials (4.7%), Materials (3.8%), Telecommunication Services (0.6%) and Utilities (0.4%).

Vanguard Growth ETF is a buy.