Q: Hi 5i Team - If a company is listed on both the U.S. and Canadian exchanges, do you have an opinion on which would be the better choice, I realize that this may be a bit of a complex question with a number of variables to consider so if you could address just a couple of those variables that would be great.
As a corollary do U.S. dividends need to claimed in RRSP's and TFSA's.
Thanks.
As a corollary do U.S. dividends need to claimed in RRSP's and TFSA's.
Thanks.
5i Research Answer:
We think the main issues should be trading liquidity and the currency of the dividend (if any). If a company pays a US$ dividend, we think it is best to own the stock on the US side, to minimize f/x conversion fees. If liquidity is higher in the US (and it is for some Canadian companies) then we would buy in the US. Nothing needs to be 'claimed' in a registered account. US company dividends are subject to a 15% withholding tax in a TFSA but if it is a Canadian company this does not apply.