ETF choices

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Turkey1
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ETF choices

Post by Turkey1 »

Hi Ya All,
After much research and scribbling in my grade school notebook I have been able to narrow down my ETF selection.
VFV for US market 50%
VGK for European market 25%
VCN for Canadian market 25%

I had looked at XAW, which has 45% of VFV stock through its IVV etf
XWD has 59% of VFV holdings through its IVV etf
VXC has 54% of VV which again is the top holdings on VFV
so I eliminated these as they would just overlap VFV

When buying these should I bother waiting till they drop in value? Or just pull the trigger and buy now?
I plan on putting VFV in the US side of my RRSP, and holding the others in my Can. RRSP

I have realized I am not a stock picker.

How am I doing?
DenisD
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Re: ETF choices

Post by DenisD »

No Asia, Australia or emerging markets? Seems to me you're still stockpicking. :wink:

Assuming you have an existing portfolio of stocks, I would do the conversion all at once when you make a final decision. If your existing portfolio is mostly Canadian, Canada has been one of the best performing markets in the world this year. So might be a good time to diversify.

I think you want to keep VGK on the US side of your RSP, not VFV.
Thanh
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Re: ETF choices

Post by Thanh »

A few questions/comments:
- Why using only Vanguard funds ? All other things being equal, I would personally favor BMO's ETF since they employ tens of thousands of Canadians.
- Why slicing & dicing regions when it's easier to buy XAW or VXC which gives you instant exposure to World minus Canada ?
- VFV has nothing to do with the "US side" of your RSP since it's a Canadian-listed fund. The "US side" of a RSP refers to the use of US-listed ETF (ex. VTI, VOO, etc.) to avoid one level of withholding tax on dividends
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IdOp
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Re: ETF choices

Post by IdOp »

Thanh wrote: - Why using only Vanguard funds ? All other things being equal, I would personally favor BMO's ETF since they employ tens of thousands of Canadians.
As a BMO shareholder, I sure hope their ETF division doesn't employ tens of thousands of Canadians.
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Re: ETF choices

Post by serious7 »

IdOp wrote:
Thanh wrote: - Why using only Vanguard funds ? All other things being equal, I would personally favor BMO's ETF since they employ tens of thousands of Canadians.
As a BMO shareholder, I sure hope their ETF division doesn't employ tens of thousands of Canadians.
Supporting local companies helps support the local economy which eventually benefits all Canadians. As a BMO shareholder, I sure hope that they do employ tens of thousands of Canadians across their entire organization.
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Re: ETF choices

Post by Hammerer »

Turkey1 wrote:I plan on putting VFV in the US side of my RRSP
Don't, you'll irreparably lose 15% of all dividends for eternity. Do a Norbert's Gambit and buy VTI instead. MER is a fraction lower (and gets lowered), and liquidity is incredible.
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ghariton
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Re: ETF choices

Post by ghariton »

serious7 wrote:Supporting local companies helps support the local economy which eventually benefits all Canadians. As a BMO shareholder, I sure hope that they do employ tens of thousands of Canadians across their entire organization.
Don't you want to share with people in low-income countries such as India?

George
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Insomniac
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Re: ETF choices

Post by Insomniac »

Hammerer wrote:
Turkey1 wrote:I plan on putting VFV in the US side of my RRSP
Don't, you'll irreparably lose 15% of all dividends for eternity. Do a Norbert's Gambit and buy VTI instead. MER is a fraction lower (and gets lowered), and liquidity is incredible.
I believe the "tax drag" is only 0.3%. I hold VFV in my RRSP. The cost of 0.3% means I do not have to do Norbert's Gambit and I don't have to worry about US estate taxes.

Recently, the guys at PWL updated their report on foreign withholding taxes. This is good reading:
https://www.pwlcapital.com/pwl/media/pw ... f?ext=.pdf
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Re: ETF choices

Post by Hammerer »

Insomniac wrote:
Hammerer wrote:
Turkey1 wrote:I plan on putting VFV in the US side of my RRSP
Don't, you'll irreparably lose 15% of all dividends for eternity. Do a Norbert's Gambit and buy VTI instead. MER is a fraction lower (and gets lowered), and liquidity is incredible.
I believe the "tax drag" is only 0.3%. I hold VFV in my RRSP. The cost of 0.3% means I do not have to do Norbert's Gambit and I don't have to worry about US estate taxes.

Recently, the guys at PWL updated their report on foreign withholding taxes. This is good reading:
https://www.pwlcapital.com/pwl/media/pw ... f?ext=.pdf
A touch under .3% these days, but that's $300/yr on a $100k portfolio. After 20 years, that extra .3% drag/yr means one loses 5.8% of their portfolio (if they never contributed again). 9.8% after 30 years. This is exactly my situation. I have an RRSP, but now have a job with DB plan, so those contributions I have made won't be touched for a loooong time.
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Insomniac
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Re: ETF choices

Post by Insomniac »

Yes, there is a cost for convenience. Turkey1 needs to read the PWL report and decide what works best for him.
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InvestorNewb
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Re: ETF choices

Post by InvestorNewb »

Thanh wrote:All other things being equal, I would personally favor BMO's ETF since they employ tens of thousands of Canadians.
I see your point but don't forget who started the low fee investment revolution. Would Canadian banks be offering low MER ETFs if it wasn't for Vanguard? I think not...
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
longinvest
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Re: ETF choices

Post by longinvest »

InvestorNewb wrote:Would Canadian banks be offering low MER ETFs if it wasn't for Vanguard? I think not...
+1 :thumbsup:
Variable Percentage Withdrawal (finiki.org/wiki/VPW) | One-Fund Portfolio (VBAL in all accounts)
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6miths
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Re: ETF choices

Post by 6miths »

longinvest wrote:
InvestorNewb wrote:Would Canadian banks be offering low MER ETFs if it wasn't for Vanguard? I think not...
+1 :thumbsup:
+2 But those darn Canadians are so polite.
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