I wonder how these funds grow - is it driven purely by interest of investors and Vanguard issues more units the more people buy into it, or the price simply goes higher and then a split happens, or is there some other specific process that results in increase of units?Smith1776 wrote: ↑Tue May 29, 2018 2:10 amI sometimes worry about the fragility of small funds as well. I've read a bit about the subject, and my general impression is that anything below $25 million is in danger of being closed, and anything below $10 million is likely in serious trouble. Be that as it may, with VCNS I rest pretty easy because the fund is practically brand new. The small size is thus understandable. I'm sure it will grow over time. The size of Vanguard itself gives me some additional comfort in that regard.
I too thought that this fund coming out of Vanguard has a bit of backing based on the issuer. However I'm not sure whether fund liquidation would affect Vanguard or they simply "close" it if the interest is low / not worth it. Not sure how that works, will need to research that.
Well, looking at some posts here 200K is nowhere near being a "high net worth" - people are talking about millions, haha. But in all seriousness - if a fund is relatively small, then premium/discount over NAV and low trading volume may affect you even if you don't need to fully liquidate your position.Smith1776 wrote: ↑Tue May 29, 2018 2:10 amAs for liquidity and NAV, I recall a conversation between members at a different forum that were debating this very topic between HXT and XIU (both ETFs that track the TSX 60 index and XIU is MUCH bigger than HXT). If you're a very high net worth individual, I could see this being a concern if you ever saw yourself needing to liquidate your position very quickly. I'm not fortunate enough to be in that position, but it seems like an awfully nice problem to have!
Well, that will become harder to manage and rebalance - you'll have to figure out your exposure and play with rebalancing a bit more, I think. Also in Canada we don't have the same breadth of funds as in the US, so we are more limited to what we can chose from - so your picks are pretty good ones.Smith1776 wrote: ↑Tue May 29, 2018 2:10 amOf course, buying VCNS doesn't preclude you from buying into the other funds either. Perhaps a prudent setup might involve, say VCNS + CEF like I've got, in addition to some of the other funds that I mentioned in the post that you linked to. In Fail-Safe Investing, Harry Browne did recommend having money spread between multiple funds, so you have his "blessings" on that one.