As it stands the investments I hold trade in the Canadian dollar. This makes the most sense to me because my banking is done in Canadian funds; investing using my home currency keeps things pretty simple while I’m getting started on the investing front. 99.999% of my net worth is in Canadian money, so it’s not like I have a stack of Euro or Yen kicking around for investing purposes anyway.
Different markets operate using different currencies. This seems like a pretty “well duh” statement, but I did run into that snag when I first picked out my ETFs. When I tried to purchase the Vanguard FTSE Emerging Markets ETF for my portfolio, I received a pop up warning telling me that the investment was traded in the American dollar, and I did not have sufficient US funds to cover the purchase. I wasn’t sure what fees or exchange rates I’d be encountering if I told it to continue, and I didn’t want to be dealing in multiple currencies just yet, so I cancelled the purchase and went back to the drawing board. I still ended up with a Vanguard fund for my emerging markets, but it was one that traded in the Canadian dollar. Basically, I’ve limited my investments for the time being to ones that trade on the Toronto Stock Exchange.
I knew when I set up my initial set of investments that I was lacking in the developed markets, save for the US and Canada. I had no Europe, no Australia, no Japan, nothing. This left me feeling a bit unbalanced to be quite honest.
I wanted to get into the European market before the talking heads started going on about recovery, but given the “Buy Europe” I’ve been seeing all over the place it would appear that I missed that boat. Oh well.
I went onto the Morningstar website to start my search on their ETF screener, and I noticed something funny: none of my ETFs are on there. Actually, I can’t find any Canadian ETFs on there Maybe I’m using it wrong, but it appears that the Morningstar screener is for American investments only. Bummer.
Scratch that. I’m seeing now that there is actually a Canadian ETF Screener on the Morningstar website. Why on earth couldn’t I find you when I needed you???
I tried using the TMX ETF screener as well, but it wasn’t behaving on my computer, so I ended up looking at the list of ETF providers on the TSX. There are currently only nine ETF providers listed, so it narrowed down my search somewhat. I initially wandered over to the Vanguard website to see what they offered, since three of my four investments were through them already.
Nada. Not even one.
I went through the other providers and narrowed it down to two choices: The iShares MSCI EAFE Index Fund (CAD-Hedged) and the BMO MSCI EAFE Hedged to CAD Index ETF. iShares has about twice the assets under management as well as units outstanding, but both funds are on a comparable scale. I could have sworn that both carried an MER of 0.35%, but it appears that the iShares one sitting at 0.5% right now. *shakes head* I suppose it’s a good thing I chose the BMO fund, but it has me questioning whether or not I was looking in the right place initially.
I chose the BMO fund over the iShares fund, because the geographical allocation seemed a little more even across multiple countries, while the iShares seemed to invest a little more heavily in its top three. I’m seeing now that the allocations have already changed, so this was perhaps not something I should have taken into consideration heavily.
This is why you should invest while you’re young and only have a little bit of money. The decisions I make now may or may not affect my portfolio negatively, but I still learn from them. A 10% drop on a $1500 portfolio hurts me WAY less than a 10% drop on a $15,000 portfolio.
Either way, I’ve added Europe and Japan into the mix now, and I’m pretty happy with what I have now.
Has anyone else started trading or added anything new to their mix lately?
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