Investment Q&A

Q: Hi there, often times the 4% rule is used as a foundation for retirement planning. I believe the original study used US equities and US bonds as the funds to develop the 4% withdrawal rule. Obviously no one has a crystal ball, but what would be your opinion on using as international equity ETF with the 4% rule rather than a US fund such as VFV? If you were make an educated guess, do you believe using funds such as XEQT/VEXT and VAB/XBB instead of US funds would yield similar results as the 4% study over the longterm going forward?

Q: Hello ,
I was thinking of buying TD technology leaders etf (TEC) instead of XQQ , the nasdaq 100 etf as it has performed the nasdaq and seems to be more diversified. Any comments please?

Also, I looked at the details of VUN and XUU etfs, They both seem to have similar holdings and over 5 year period both have similar performance. However , going over more than 5 years, why has VUN out performed XUU. I am not clear on this..

Regardless of the tariffs situation, the US market seems to do well over time, and hence i thought instead of total Europe exposure, go with VEQT etf. Any comments please..

Also, do you prefer unhedged products like VUN as opposed to VUS? Lastly, i use yahoo to to compare charts. Do you know a better site please? Thanks very much

Q: Hi,

I’m following up on recent questions about taxation of the ETF VEQT (and similar) in an RRSP.

I am a bit confused about what withholding taxes might apply to VEQT. I have three questions please.

1) Would you be so kind at to explain what withholding taxes apply to VEQT in an RRSP?

2) If there are non-recoverable withholding taxes on VEQT in an RRSP, can they be quantified?

3) Finally, if there are withholding taxes applicable to VEQT in an RRSP, is there an ETF setup with the same diversification objective as VEQT that is more tax efficient in an RRSP?

(I tried following this information but I’m still unclear: https://www.vanguard.ca/content/dam/intl/americas/canada/en/documents/WithholdingTax_Guide-final.pdf).

Thank you very much.

Michael

Q: I rely on you for accurate information when reading answers to questions. however my research shows that VEQT holds a basket of funds not individual stocks. I hate paying more taxes than I need to and always look for the lowest fees and taxes when investing. Please confirm holdings of this fund. Thank you.

Q: Do you you prefer one of these over the others? Would VEQT would be more efficient in an RSSP as it holds individual stocks rather than ETF's?

Q: Following up on Harrison's RESP question from February 10th, I'm seeking advice on ETF recommendations for my grandson's RESP. He turns two in March 2025, giving him approximately 16 years until he'll need the funds.
I appreciate your ETF recommendations, particularly the split between Canadian and US markets (VGG, ZSP, ZCN, XCG, VDY). I'm also considering ZUQ (BMO MSCI USA High Quality Index), but I'm wondering if it's too similar to ZSP? Your thoughts?
I do not like CDZs holdings as much.
You also mentioned two balanced ETFs in your response (XBAL and VBAL). The fixed income allocation is approximately 40% for these balanced ETFs. In contrast, XGRO and VGRO have a fixed income allocation of around 20%, and XEQT or VEQT have no fixed income. What I like about these allocation ETFs is they have some international exposure.
Considering the long-term horizon, I'm leaning towards XEQT/VEQT, which have no fixed income. My main question is whether the 20% fixed income component of XGRO/VGRO or even the XBAL/VBAL (40% fixed income) is necessary for a two-year-old’s RESP? Or are XEQT/VEQT too aggressive, considering the other ETFs mentioned?
Finally, wouldn't it be more appropriate to introduce a 100% fixed income ETF closer to the withdrawal age or perhaps three years before we start accessing the funds?
Deduct as many points as you think necessary.
As always thanks for the great advice.
Élaine

Q: Which one do you prefer and why?

Thanks

Q: From a tax perspective, which of the above ETFs are best suited for:

1. TFSA
2. RRSP

Q: Hello Peter,
I tried to balance growth and income as well as dividends (no with holding tax in RRSP for US stocks but there is in TFSA), and hence, can you let me know if these make sense for a mid 20s person starting off to have a more growth in TFSA and more income in RRSP.
TFSA: veqt, vgg, and xfn and maybe xic ( veqt has cdn exposure so thought i would exclude xic )
RRSP: vbal, zuq, xic, and xuu all of these trade on tsx. Much appreciated.

Q: Hi- I’m looking for a long term, somewhat diversified CG hold for my TFSA. What do you think of FEQT. Do you have others you prefer?
Thanks,
Guy

Q: Hi,
I believe VEQT pays an annual dividend at the end of December. What would be the pros and cons of borrowing some money, depositing it in an RRSP, buying VEQT and repaying the loan when the tax refund from this and other RRSP deposits earlier in the year comes in April 2025? I realize the loan interest will have to be paid as a cost, and the higher dividend amount on the added funds would be the benefit. Thank you. Michael

Q: What are some ETFs that I can use to diversify my portfolio and have as a buy and hold strategy. 20+ year hold in TFSA. I want a portion of my portfolio that I don't have to look at at all. I currently have VFV and VEQT.

Q: Hello Peter,
For a 30 year old that wants to invest for the long term and not have to worry about following the markets constantly, what is your opinion on investing on the 5 ETFs: 40 % to VBAL ( as it contains bond portfolio) and 60 percent to the rest of the 4 ETFS. I know there is some duplication but wanted your opinion.. thanks for the service.

Q: These are on my watchlist. Do you see any problems with these?

Q: Writing in again because I keep hesitating about how to start a high growth all equity portfolio..

For context, I am 39 years of age, with a comfortable income, and planning on working about 25 years. This would be for retirement money.

You previously answered you would be comfortable with an SP500 index fund as VFV of SPY as opposed to an all in one equity fund such as VEQT or XEQT, from what I understood.

Can you please suggest a porfolio of 5 to 7 all equity ETFs that you believe to be superior to the all in one variety. I don’t necessarily care about the truisms about absolutely needing to be geographically diverse. And I certainly prefer to avoid Canadian home bias.

Thank you.

Q: Apologies if this has been answered previously. This is a follow up to Ross’ question about these one stop shop ETFs. You mention, in this particular answer, that you consider them to be ‘more than acceptable’.

Assuming one doesn’t mind complicating their lives a little, what would be your optimal all-equity ETF portfolio for an aggressive investor ?

Thank you

Q: I am looking for a US ETF that has a similar distribution weight has VEQT, I looked at VEQTF which is the US counterpart but it trades on the Grey exchange. Thanks, Jean

Q: I am looking for a US fund like VEQT , I tried VEQTF and it is listed on the grey market, what would be good in a balanced fund with majority US, Then smaller CDN and International stocks?

Q: For the average person with a long time horizon and want to invest in stocks in the form of ETFs, what do you think is the optimal distribution of US, Canada Europe China etc? S&P 500 seem to have done better historically than other markets. But does that mean I should only invest in vfv?
And what do you think of the weighting of VEQT?

Q: Hi, l have some cash to deploy in my cash account. I have a full position in ZCN. Thinking of buying full position in BRK and also VEQT full position.
My question is for a conservative investor 65%safer, 35% conservative growth.Would this be too much overlap of similar positions and sectors? Do you have an alternative? Thanks