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Global X S&P 500 Index Corporate Class ETF (HXS $94.68)
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Global X S&P/TSX 60 Index Corporate Class ETF (HXT $85.83)
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Simplify Hedged Equity ETF (HEQT $31.89)
Q: Dear Peter et al:
This is a follow up to Lyle's question on Feb 17th. If one has a professional corporation and it's related investment account, (Non-Regd) won't holding ZEQT or VEQT cause tax drag? (Dividend withholding) Do you think holding HEQT is a better option? This goes back to my own earlier question about where should one park their investments? Which ETF goes into what bucket?! My apologies for my poor grammatical format :) Many Thanks in advance.
This is a follow up to Lyle's question on Feb 17th. If one has a professional corporation and it's related investment account, (Non-Regd) won't holding ZEQT or VEQT cause tax drag? (Dividend withholding) Do you think holding HEQT is a better option? This goes back to my own earlier question about where should one park their investments? Which ETF goes into what bucket?! My apologies for my poor grammatical format :) Many Thanks in advance.
5i Research Answer:
There would be some tax drag but not at levels we would view as above average or particularly concerning. Overall yields are fairly low on these funds (around the 1.5% range) so taxes from dividends shouldn't be overly onerous. HEQT will have similar tax implications to the others and would view it as a fine alternative. We don't see an all-in ETF that is corporate class offered by Global X.
If particularly sensitive to taxes in a corp, swap based ETFs (corporate class) are likely the best option (HXS and HXT). One could try to replicate the all-in one equity ETFs with the individual corporate class ETFs.