In the long run, which one is a better investment choice for a Canadian, considering foreign exchange rates, MER, fund performance and dividend withholding taxes?
Based on my research a LIRA is exempt from the US withholding tax, similar to a RRSP.
Also, aside from the factors above that I’m considering, from your perspective are there any other pertinent factors that I’m missing?
This is a good resource on WHT and different accounts: https://www.mackenzieinvestments.com/content/dam/mackenzie/en/etfs/mi-etf-witholding-tax-en.pdf
You are correct that a LIRA and RRSP are viewed similarly.
We think VOO is the more efficient option here. It is slightly cheaper than VFV and avoids WHT within a LIRA. The mian consideration is foreign exchange. With a long-term holding period, we think this is less of an issue but if you are going to be constantly converting FX to buy/sell units, it might be less efficient.
There are not really any other considerations other than this and fees. One of course needs to be happy with the US market outlook, and there will be volatility.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.