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iShares S&P/TSX Composite High Dividend Index ETF (XEI)
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iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ)
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Vanguard U.S. Total Market Index ETF (CAD-hedged) (VUS)
Q: When deciding what to hold in a non-registered account, is it more important to maintain adequate exposure to the US with something like VUS, or to keep the dividend tax credit with a CDN option like CDZ or XEI?
5i Research Answer:
We think diversification and higher growth potential is more important. For an ETF such as VUS, the indicated yield is only 1.11%, so the withholding tax only 'costs' an investor 0.16%. Since fees are only 0.16%, vs 0.66% for, say, CDZ, VUS even with the tax can still look better.