Q: I am thinking of buying the following ETF's: VCNS, XEF, XIU, WXM, ZSP, VEE, ZAG,VVL, XQQ and XUT. Which of the following accounts: TFSA, FHSA, Non-Registered, and RSP, would be best for Canadian tax reasons to put each one in?
5i Research Answer:
Some of this depends on personal preference and situations so we wil be ore general here.
As a general rule, we tend to suggest putting international and US dividend/income ETFs in the RRSP to maximize tax efficiency.
If room, we would also prioritize fixed income in the RRSP and FHSA and then the TFSA.
Growth and low/no income holdings then in the TFSA and non-reg accounts.
Some diversification within accounts also makes sense. For example, if an investor only held a single type of sector or factor in the TFSA and it is out of favour, it limits room for the account to grow. Having a bit of diversity helps smooth out performance within the account level as well.