Q: In my spousal RRSP, I hold a handful of US dividend stocks as well as several ETF’s (VOO, VGG, XIT, FIE, ZRE). The split is about 50/50 between stocks and ETF’s. My question is regarding VGG. I think you have said in the past you prefer VOO, and VGG is not as efficient in an RRSP as the distributions are subject to withholding tax. For me, VOO and VGG have both averaged around 10% since I bought them. I keep debating if I should 1) swap VGG with the US$ equivalent 2) move VGG into VOO 3) move VGG into individual stocks or 4) do nothing and continue to hold VGG. Could I please get your take? Thanks.
5i Research Answer:
If there is no preference between dividend or S&P500 exposure, we would be okay with the move as the currency exposure will help the overall portfolio. That said, we would prefer holding a broad-based ETF as a core holding and building on top of it (answering for number 3). Much of this answer depends on liquidity needs, income vs growth-focused portfolio, and risk tolerance.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VGG.