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iShares Core Canadian Universe Bond Index ETF (XBB)
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SPDR S&P 500 ETF Trust (SPY)
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Vanguard Balanced ETF Portfolio (VBAL)
Q: Greetings 5i
I have a couple of follow up questions to yesterday’s question regarding a US replacement for vbal. You suggested a combination of spy and a bond fund. What would be an appropriate bond etf for this strategy? I imagine you would be indifferent between spy and voo for stocks? Is there any way to calculate the tax hit in a non registered account. Currently I have non dividend paying stocks in this account to avoid withholding tax. But, i guess if you follow this strategy you have to take the tax bite as part of the package.
With appreciation
I have a couple of follow up questions to yesterday’s question regarding a US replacement for vbal. You suggested a combination of spy and a bond fund. What would be an appropriate bond etf for this strategy? I imagine you would be indifferent between spy and voo for stocks? Is there any way to calculate the tax hit in a non registered account. Currently I have non dividend paying stocks in this account to avoid withholding tax. But, i guess if you follow this strategy you have to take the tax bite as part of the package.
With appreciation
5i Research Answer:
We think XBB is a solid, generalized bond fund for Canadian exposure. VGIT we think works well for the US as a 'medium' term duration bond fund. VOO could be interchanged easily for SPY. VOO's indicated yield is 1.32%, so a withholding tax hit, not counting any foreign tax credit recovery, would be about 0.20%. In a non-reg account there is no real way around this. But one could look at HXS in Canada, which is a total return fund with no distributions (higher fees, however).
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in SPY.