Investment Q&A

Q: I'm new here and am looking to increase my international exposure. Can you recommend a few international ETFs that don't have US exposure and some that include it as part of their holdings? Should I look to these ETFs to include exposure to both established and emerging markets or strictly more developed countries? I'm looking at investing between 30% of my portfolio as I already own QQQ which represents approximately 12% of my holdings now). Thank you in advance, Elaine.

Q: Hi there, there are many "all in one" etfs to pick from these days. If a person wanted to have a super simple portfolio, what would be your favourite (or the best) ETF to hold to gain 100% equity exposure that would require the least amount of maintenance? I know there is XEQT, VEQT, XAW, VXC, XWD, HGRO and many more. What would be your favourite? (Does not have to appear on the ones I have listed)

Thanks!

Q: Peter,

What etfs would you recommend for consideration that would cover equities outside of North America, in Canadian dollars. I am looking more towards the more established economies rather than emerging markets.

Thanks

Paul

Q: Hi team!
I am considering a hybrid portfolio of either (A) 80% ETFs and 20% individual stocks or (B) 80% in an All-in-one ETF (VEQT/VGRO) and 20% individual stocks. I understand there may be foreign withholding tax considerations on the Vanguard All-in-one ETFs depending on the account type in which it's held and I'm wondering how significant this actually is.

Questions:

- Which accounts out of RRSP/LIRA, TFSA, RESP, and Non-Registered would US listed ETFs be a better alternative due to this foreign withholding tax drag?

- At what account value would the tax drag from these withholding taxes be material enough to warrant buying individual ETFs (ex. VT, VTI, XUU, XEF) instead of using an all in one fund (VGRO or VEQT)?

Trying to avoid losing 15% or more of any US/foreign dividends due to unrecoverable foreign taxes if possible!

Thanks for your great work!

Q: Hi,
Are SPY and QQQ subsets of VT? If so, would it suffice to just invest in VT as a more diverse index fund for a long term hold? Thanks.

Q: Would like a current opinion on this mutual fund?
Is the fees worth the returns or would a global ETF perform better?
Greatly appreciate your opinion.

Q: What do you suggest using as a benchmark for sector allocations? I have been looking at global market sector exposures using the iShares MSCI World ETF (XWD). I also saw the Vanguard Total World Stock ETF (VT), which I believe has more small-cap exposure than MSCI World. If the global market is a good base to use, do you see any reason to deviate from these exposures at the moment?

I assume I shouldn't look at regional exposures the same way, the global market is heavily weighted toward US (60-70%). Would regional exposure for something like VGRO (equity only - US 43% / Canada 30% / International Developed 20% / Emerging 7%) be a good benchmark?

Q: Hi 5i team:
I am looking to add to my portfolio an International ETF ex Canada (in US dollars), I want to get more ex-Canada diversification.
Have been researching URTH (iShares MSCI World ETF), but is not in your database .. please add. Could you suggest another 2 or 3 ETF's with the above criteria to purchase in USD. What do you think of VT ? Thanks as always for your guidance.
Steve

Q: I am helping a grandson (age 22 in medical school) set up a TFSA with a small initial investment in one ETF. I am trying to choose between an international ETF (XAW or VXC) or a Canadian ETF (XIU). What would you suggest?
Many thanks.
Judith

Q: Hi,

I'm a medium risk investor with a 5 year time frame.

Can you recommend 3 US ETFS to cover the whole US Market?
And 3 to cover the whole CDN market?
and 1 ETF to cover the international market?

Q: I am looking to gain some exposure to world markets. My portfolio is currently overweight in Canadian equites. I have found URTH which seems to be the only ETF that tracks the MSCI World Index. Would you consider this to be a good choice or are there other ETF's that I should consider?

Q: July 10 2019 you gave the following opinion on EDG100
"We are generally not huge fans of mutual funds for their higher fees, but EDG100 is an exception that has consistently justified the higher fees through its performance. We would be fine keeping it."
1) Just wondering what your thoughts are on this mutual fund today and are the high fee still justified by it performance?
2) What alternative that operate in the same space would you suggest looking into?

Q: Hi 5i,
I am not 100% clear on stock and ETF's allocations for investment plans. Take as many points as needed to answer the questions below. I apologize in advance for the length of the question.

As a Canadian investing through a Canadian site (RBC in this case), split into CDN and US sections (moved CDN funds to USD and paid the exchange), which stocks and ETF's should be allocated to RRSP (CDN or US sections), TFSA, & Non-Registered accounts?

As an example, an RBC RRSP account is split into CAD and USD segments. If I purchase VWO in USD on the US segment instead of VEE on the CDN segment do I retain the 15% withholding tax? If I purchase VWO in CDN funds on the CDN side of the RRSP, what happens to the 15% withholding tax?

Is there a tax difference when filing a CRA 1135 form. e.g if VWO or VEE are 100+k CDN value: VWO on the USD segment or VEE on the CDN segment or VWO on the CDN segment.

If a US stock has a dividend, should this ever be purchased on the CDN side of the RRSP or in a TFSA? .. e.g. CRM with a small dividend or AMGN with a larger dividend

Can you please assign the best allocations (RRSP, TFSA, Non-Registered) to examples a the bottom of the question.
e.g. Non-dividend Growth US stocks (Googl, AMZN): TFSA, RRSP
This tells me that AMZN is best in the TFSA for growth, and in an RRSP purchased in CDN or US funds is the same effect other than currency at the time of purchase.
If a stock or ETF should be in CDN or US sections can you note that as well? e.g. RRSP(CDN or US).
It is a lot to ask so limited examples below will hopefully reduce the effort.

5i recommendations
Non-dividend Growth US stocks (e.g. Googl, AMZN):
US small Dividend Growth (e.g. IWO):
US Foreign ETF (e.g. VWO):
CDN ETF with US stocks and other int'l stocks (e.g. VEE):
CDN High Dividend (e.g. CDN Utilities/Reits/ETF's):
US High Dividend (e.g. US Utilities/Reits/Medical/ETF's)
All World ETF (VT):
All World ETF (XAW):

I very much appreciate your service and time to answer questions.

Jerry

Q: Hi Team,

I am trying to help a family member with a simple solution for investing in stocks in their RRSP account. Im leaning towards VT due to no withholding taxes but I would like your opinion as well. Im thinking currency diversification is a good thing with VT too as there are other Canadian holdings (XDIV) in their TFSA.

Thanks

Q: Hi 5i team: I am looking to add to my portfolio an International ETF ex Canada (in US dollars), I want to get more ex-Canada diversification. Am leaning toward XAW:U (shares Core MSCI All Country World ex-Cda) as it seems to get high marks from the research I have done. Could you suggest another 2 or 3 as alternatives in US dollars. What do you think of VT ? Thanks as always for your guidance.
Steve

Q: Hello team- am considering buying VT for the global exposure for my tfsa as well as for my non registered account. Questions: 1)what are the tax implications for each account, as well as pros and cons. Of course, your suggestions
of other ETFs (pros and cons) to consider would be most welcome.
Thank you- jane

Q: Thank you for the wonderful service you are providing the DIY investors.
My question: I would like to simplify a mid- 6 figure RRSP portfolio primarily into VT etf + BNDW (70%-30%) for broad diversification, simplicity, ease of rebalancing, and favourable foreign withholding tax treatment in RRSP. Got 16 years before converting to RRIF. I'm comfortable with VT. However, I have read that Canadians should only buy foreign bonds if they are currency hedged to CAN $ otherwise, there'll be too much volatility. Do I need to worry about this? I ask because unless have to, I want to avoid buying a broad Canadian aggregate bond etf (e.g ZAG) instead of BNDW --- because I don't want to lose global bond diversification, and I don't want to have to convert to US $ for rebalancing purposes. Thank you.

Q: Just a quick comment. I read your answer at Manoj on edg100.
you seem a little biais on Vt. you mention the advantage on C$ 0n 10y performance.
At the end of mars 2009, the C$ was at 1,2576, now around 1,33 (5-6% difference total), that's not just explain more than 2% overperformance net of fee.

Thanks

Q: I noticed you recommended VT instead of EDG100. On morningstar I see VT has a 10 year annualized return of 11.93% and EDG100 has a 10 year annualized return of 15.09% net of fees. I understand VT has lower fees, but why make this substitution when EDG100 is outperforming so dramatically net net of fees? Am I missing something? Also, it seems like EDG100 does much better on the downside.

Q: Hello
I just sold my mutual fund edgepoint and I want to replace it with a another global fund or ETF or closed fund like cymbria. I find the management fees to high for an investor in td webbroker. They dont have a serie D. Can you suggest me a similar investment better return or similar with lower risk or similar but with lower management fees. Its could be in US dollar or canadian $
Thank you