Q: Hello Peter and 5i Team! it is an RESP account.

A new granddaughter born this year has a tiny new RESP in her name. It started with 3 shared of IUSG, and then, realizing that commissions were a large percentage of such small purchases, we added 2 shares of ZUQ, which has no commission.

For future small contributions, I am looking at these 4 ETFs, based on 3-year average annual return. I am specifically wondering about MER vs Tax efficiency:

ZUQ: +13.44%/yr, MER=0.33%, yield=0.60%, holds US stocks directly
VFV: +13.36%/yr, MER=0.09%, yield=0.99%, holds US stocks indirectly through VOO
XUS: +13.36%/yr, MER=0.09%, yield=1.03%, holds US stocks indirectly through IVV
ZSP: +13.30%/yr, MER=0.09%, yield=0.94%, holds US stocks directly
(as far as I know, none of these are hedged)

Generally I gravitate to low MERs, so perhaps ZUQ is not the best choice.

I recall a comment on 5i that the indirect holding of US stocks means that the withholding tax is withheld when the underlying US ETF pays dividends to the Canadian holding ETF (e.g. VFV get the dividend from VOO, less 15%). So holding in a TFSA won't avoid it, whereas it would be avoided with, say, ZSP in a TFSA.

So, my question is: do the 3-yr performance numbers take all of this into account? I am guessing not... withholding tax efficiency depends on the holders nationality, sheltered status, etc.

Bottom line - which of these ETFs would you recommend for a grandchild with a time horizon of many decades, for optimal performance?

Thanks for your excellent insights and wisdom!

Q: could you pls suggest a couple of US denominated etfs that track the sp500 - preferably equally weighted. Thanks

Q: Warren Buffett says " buy index funds" preferably Vanguard.

What would you buy in Canada & the USA?

Thank you.