Investment Q&A

Q: Hello Peter and 5i Team! it is an RESP account.

A new granddaughter born this year has a tiny new RESP in her name. It started with 3 shared of IUSG, and then, realizing that commissions were a large percentage of such small purchases, we added 2 shares of ZUQ, which has no commission.

For future small contributions, I am looking at these 4 ETFs, based on 3-year average annual return. I am specifically wondering about MER vs Tax efficiency:

ZUQ: +13.44%/yr, MER=0.33%, yield=0.60%, holds US stocks directly
VFV: +13.36%/yr, MER=0.09%, yield=0.99%, holds US stocks indirectly through VOO
XUS: +13.36%/yr, MER=0.09%, yield=1.03%, holds US stocks indirectly through IVV
ZSP: +13.30%/yr, MER=0.09%, yield=0.94%, holds US stocks directly
(as far as I know, none of these are hedged)

Generally I gravitate to low MERs, so perhaps ZUQ is not the best choice.

I recall a comment on 5i that the indirect holding of US stocks means that the withholding tax is withheld when the underlying US ETF pays dividends to the Canadian holding ETF (e.g. VFV get the dividend from VOO, less 15%). So holding in a TFSA won't avoid it, whereas it would be avoided with, say, ZSP in a TFSA.

So, my question is: do the 3-yr performance numbers take all of this into account? I am guessing not... withholding tax efficiency depends on the holders nationality, sheltered status, etc.

Bottom line - which of these ETFs would you recommend for a grandchild with a time horizon of many decades, for optimal performance?

Thanks for your excellent insights and wisdom!

Q: I have been moving some of my stocks to ZSP or VDY believing this is more conservative as I should be as an older senior. Am I right or have I just made this up?

Q: I am looking for a Canadian ETF with American exposure with a low mer. What do you suggest.
Thank you
Richard

Q: It is rare that I ask this question coming from an 84 year old senior, but all the above equal weighted ETF's are presently in my TFSA and can't decide how to invest for the 2025 contribution. Which ETF I should I be adding to the above list or should I be adding a new one that is not in the portfolio?
Also are any of those listed that do not belong in a TFSA?
Thanks for your usual great service.

Q: Looking for investing suggestions for someone in there mid twenties that has a very good job and are just starting out investing, I was thinking buying a few ETFs that auto buy every paycheck through a big bank brokerage arm kind of set it and forget till they figure out if they want to learn more about investing. Also what would be a good basic investing book that teaches how RRSPs and TFSAs work? Is Gordon Pape still around, lol.

Q: Hello Peter,
I tried to balance growth and income as well as dividends (no with holding tax in RRSP for US stocks but there is in TFSA), and hence, can you let me know if these make sense for a mid 20s person starting off to have a more growth in TFSA and more income in RRSP.
TFSA: veqt, vgg, and xfn and maybe xic ( veqt has cdn exposure so thought i would exclude xic )
RRSP: vbal, zuq, xic, and xuu all of these trade on tsx. Much appreciated.

Q: Could you suggest some ETFs in a non registered account ($100k) and in TFSA ($60k) for a retired person who would not need those funds for the next 10 years?

Q: Can you please recommend an equivalent ETF to VOO or MGK that is denominated in Cdn dollars. Thank you.

Q: Is there a "Best" S&P500 Index ETF, or are all the same? Which has performed the best last year?

Thanks!

Q: I have a seven year old grandson with a disability that qualifies him for an RDSP. So I am looking for a long term investment strategy. Would you recommend ETFs? If so could you please suggest 3 ETFs. If not, ETFs what would you recommend?

Q: I would like to purchase a NASDAQ ETF and S&P 500 ETF for a long-term hold 15 years plus in a TFSA account
1. Should I buy in USD (QQQ, VOO)or CAD(ZNQ.TO,XUS.TO) I am wondering how the returns are affected if the cad appreciates in future ?
2. If I buy on tsx am I correct in thinking no tax will be withheld as it’s in Tfsa account ?
My ideas : NDAQ QQQ XQQ.TO ZNQ.TO
VOO. XUS.TO ZSP.TO HXS
Appreciate your opinion as to best ones to own
If you can rank best first
Thank you again

Q: My wife has some money should would like to invest in eft. Which ones would you recommend.

Q: I have some cash and would like to buy a US TFA that is listed on the TSX what ones would you suggest?
Thanks for your help
Dorothy

Q: Recently you answered my question regarding US dividend WHT on Canadian domiciled ETF issues (Vanguard Canada, RBC Ishares etc) and noted that withholding taxes are owing on distributions since the Canadian ETF is simply holding the US ETF and the taxes would be levied when distributions are paid by the US ETF to the Canadian ETF.

Some follow up questions:
- I am assuming that the WHT would apply even if the Canadian ETF is held within a registered account?
- Does the WHT explain part of the difference in yield when comparing the US ETF and the Canadian ETF? For example - VIG yields 1.69% while VGG yields 1.17%. Assuming also that the higher MER on VGG also explains part of the yield difference??
- Given these factors - the WHT and higher MER - why would anyone choose the Canadian version of the same ETF. Further to this - In another question posed by Jacques - you point out that the Canadian ETF ZSP would be preferable to VFV since it holds the stocks directly and not thru the US ETF VOO....thereby avoiding WHT's for registered accounts. However - when you look at VOO - the yield is about 26 bp's higher than either VFV and ZSP....again why would you not just buy VOO.

Many thanks

Q: Which stocks or ETFs would you recommend for long term to a 25 year old with contribution room of $60K in the TFSA and $8k in First Home Savings account?

Q: In a recent question you stated "Alternatively to VFV, we also like ZSP, which focuses on the S&P 500, and it has some tax benefits given that it holds the US stocks directly." Could you elaborate on the tax benefits? Thanks for your help.

Q: good morning:
if you were going to start buying a etf today that had low costs [mer] in canadian dollars and invested outside of canada and paid a decent dividend which 5 would you look at? can be small cap, european, etc

Q: Most of my TFSA is in Canadian stocks (plus some US CDRs GOOGL, MSFT, AMZN). Now I'm thinking of adding 2 ETFs to my unregistered account. So far, my first choice is VFV, because I know you like it. But you mentioned another one that broadens out from the S&P 500. Not sure about that one: thoughts? But I want one more, particularly with dividend and some growth. If there is a USA one that, like VFV, trades in Canada TSX but pays dividends in US dollars, that might work nicely. Alternatively, maybe a Canadian one that is not too focused on Financials and Energy, one with which I could get dividend tax credit, may work. Between dividend and growth, I would lean toward growth and sacrifice some dividend. Between Canada and USA, I'd like USA, but only if I can buy on TSX. I'd like to stick to just two, but maybe three would work best? What say you? Thank you, yet again, for such a fabulous service.

Q: Hi 5i,

For a US ETF in a non-registered account, would it be more tax efficient to hold HXS because it doesn't pay a distribution, versus ZSP which does? Would you recommend ZSP over HXS for any particular reason?

Thanks

Q: How do you fell about HXQ in a 15+ year RESP?
I have held RBF619 (Science and Technology for 15 years and it has done wonders but it has the fees. Any other ETF's ? ZSP? XIC? OR would you be comfortable with just BN?