Q: I currently hold XMC in my unregistered account as I want exposure to the S&P Midcap 400 index. However, as you pointed out in your response to a recent question, the MER at 0.61% is quite high. Do you recommend an equivalent ETF that trades in the US that I could buy instead? Are there any disadvantages to replacing a Canadian listed ETF with a US listed ETF in an unregistered account (other than realizing tax on the capital gain upon the disposition of XMC)? Thanks as always.
5i Research Answer:
We would suggest IJH, with fees of only 0.05%. There will be currency risk, of course, but this exists anywat with XMC, even though it is priced in C$. Keep in mind though that if taxes are high it may take several years to recover these even with a lower MER. If an investor is in a high tax bracket, it may not make sense to switch but new money could be directed to the lower fee ETF.