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iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP)
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iShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ)
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Global X Nasdaq-100 Index Corporate Class ETF (HXQ)
Q: Which would be your preferred US index ETFs for a TFSA?
Thank you
Thank you
5i Research Answer:
This really depends on an investors preference. NASDAQ-100 ETFs will have the potential for higher growth and volatility vs. S&P 500 Funds. We like XSP for Canadian investors. For the other two funds, HXQ has a lower stated fee at 0.28% vs. XQQ at 0.39%. The caveat to HXQ's lower fee is that the total return has derivative costs embedded in its so the costs may actually end up higher than 0.28%. The reason for this is because the fund does not pay distributions, but instead uses swap contracts to enhance total return as a tax advantage over dividend payments. We do typically prefer unhedged funds, for which HXQ and XQQ offer.