Investment Q&A

Q: Good morning.

I have a sizeable amount of US dollars in my TFSA and RRIF accounts and intend to add international investments with that money. I can either just purchase the XEF.u with the US money or go thru the Norbert Gambit process to convert to canadian dollars and then buy the XEF ETF. My question is which would you recommend and also buying XEF.u in my TFSA which I believe is a Canadian listed ETF would there be a 15% US withholding tax on the dividends.

Many thanks.

Q: Hi,
Is there a Canadian economic equivalent for the US IEFA ETF in Canada? Would either XEF or XEF.U qualify?
Thank you, Michael

Q: I want to increase exposure to foreign equities within my RRSP. I currently have US$ in my RRSP account (in the US$ side of the account), as well as an existing position in XEF:CA (in the CA$ side of the same RRSP account), which I want to increase. I noticed that it is possible to buy XEF in US$ (the ticker is XEF.U:CA). Since I already have US$ within my RRSP, it would seem to make sense to buy XEF.U:CA, using my US$, and then after the trade settles, to "journal-entry" these newly acquired XEF.U shares to the Canadian side of the RRSP account (where presumably they would be re-designated as XEF:CA). My goal is to hold the XEF holding in CA$ for the long term, as I will ultimately dispose of these securities in CA$ when I begin to withdraw funds during retirement. Does this strategy for acquiring more shares of XEF make sense to you? Or is there some downside I am not considering? (The obvious upside is to be able to acquire the new position in XEF, using my existing US$ cash position, without a direct currency conversion expense.)

Ted