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Vanguard U.S. Dividend Appreciation Index ETF (CAD-hedged) (VGH)
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Vanguard Dividend Appreciation FTF (VIG)
Q: Happy new year 5I! (this question is not urgent),
Given how far the Canadian dollar has fallen, in an RRSP is there any merit to switching a VIG to VGH if one thinks the CAD will bottom soon and then slowly work its way up by 9-10% in value over the coming years?
Thank you for all your insight in 2024!
Given how far the Canadian dollar has fallen, in an RRSP is there any merit to switching a VIG to VGH if one thinks the CAD will bottom soon and then slowly work its way up by 9-10% in value over the coming years?
Thank you for all your insight in 2024!
5i Research Answer:
Under the thesis of the CAD strengthening from here, we think a switch like this can make sense. Of course, predicting currency moves can be difficult. Our call for 2025 would still be for the US dollar to be stronger, but C$ sentiment is very weak, and any positive news could see a bounce in our dollar. If the switch had tax consequences (i.e. not in an RRSP or TFSA), we might be less inclined to make this type of trade.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VIG.