Q: Hi 5i team,
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).
