Q: For S&P500 and Nasdaq100 Index ETFs:
Which Canadian ETFs would be more beneficial if one believes the Canadian dollar is currently close to the low point and will get stronger against USD on the long run ?
Also comment on withholding tax consequences of holding these index ETFs in TFSA.
Thank you
Which Canadian ETFs would be more beneficial if one believes the Canadian dollar is currently close to the low point and will get stronger against USD on the long run ?
Also comment on withholding tax consequences of holding these index ETFs in TFSA.
Thank you
5i Research Answer:
If the C$ is going to strengthen, then investors would be better off with a hedged product, so XSP for the S&P and ZQQ for Nasdaq. Withholding taxes do apply in a TFSA, but not in an RRSP. There is a slightly higher level of withholding taxes on XSP as it holds its securities through another ETF, and not directly as ZQQ does.