Investment Q&A

Q: Thinking about taxation and witholding taxes.
Are there any of these holdings that should not belong in a CELI?

ISHARES CDN SELECT DIVIDEND INDEX ETF XDV
ISHARES CORE MSCI EMG MKTETF IEMG
ISHARES CORE S&P 500 INDXETF(CAD-HEDGED) XSP
ISHARES CORE S&P/TSX CAPPED COMPOSITE INDX ETF XIC
ISHARES MSCI EAFE IDX ETF(CAD-HEDGED) XIN
ISHARES SEL DIVIDEND ETF DVY
ISHARES SP/TSX CAPPD REITINDEX ETF
HYG
ISHARES TR-RUSSELL 2000 VALUE INDEX IWN
SCHWAB STRATEGIC TR US REIT ETF SCHH
VANGUARD FTSE DEVELOPED MARKETS ETF VEA
BMO US DIVIDEND ETF ZDY
ISHARES CORE S&P 500 INDXETF XUS
ISHARES CORE S&P/TSX CAPPED COMPOSITE INDX ETF

Q: Can you please recommend a couple of BRIC ETFs?
Preferably Canadian, but perhaps a good US also.
Looking at a 3-5 year timeline.

thanks,

Paul

Q: Hi Guys
For a long term hold, if your view is the U.S. dollar will decline steeply over time, would it not be best to purchase my Emerging Markets through IEMG, as the foreign currencies become worth more against the U.S. dollar?
thanks Gord

Q: Hello,
I have sold ZEM in my CDN RRSP account. I am going to transfer these funds to my USD RRSP. Which ETF would be an equal replacement for my USD RRSP keeping in mind tax efficiencies? I would like the US ETF to be as similar as possible to ZEM.

Thanks.

Q: Hi
Want to reduce the etf's I have, by doing the following, looking for growth outside of Canada.
IDV and PID into EFG
IVOL, QQQJ, XGI, SCHB & SCHD into IWO
VIU into IEMG
Your suggestions always welcome.
Thank you

Mike

Q: Hello 5i Team,
A good friend of mine has all his investments in 2 funds.  

RESP: CIBC Managed Aggressive Growth Portfolio

RRSP: BMO SelectTrust Equity Growth Portfolio - Series A

He has everything in those two funds. Are they worth holding? What do you suggest I advise him?  I've talked to him about ETF's and doing something different than mutual funds.
Thank you for helping out. Brent

Q: What is your view on a core portfolio of the following ETFs: IEMG (12%), IEFA (23%), ITOT/ VFV (40%). The US ETFs would be in RRSP to minimize fees and withholding taxes while VFV would be in a TFSA. Both accounts would be supplemented with individual stocks from the 5i balanced/growth portfolios and a select few US stocks (CRWD, U, SQ, PINS, PLTR, NVDA) for Canada/growth exposure. Do you prefer Vanguard’s comparative US ETFs over the ones mentioned or are you largely indifferent? Thanks!

Q: In a taxable account, for a US ETF(ex: IEMG) with no US stock in it ,(bought alone or even included in a canadian ETF like XAW ) : is it considered as a US equity, and submbitted to the US withholding tax on dividends ?

Q: This is a follow up to my question about EM ETFs.

The way I see it, XEC holds only IEMG, but in Canadian funds. With XEC, there are 2 layers of foreign withholding taxes, one from the EM countries, and one from the US, neither of which are recoverable. This amounts to up to 27.75% (15% + 15% of the remaining 85%) withholding taxes on dividends, none of which are not recoverable.

With IEMG, the US withholding taxes are recoverable, so the total withholding taxes are up to 15%. That is a significant difference.

The same holds for VEE (holds only VWO).

ZEM looks like it holds about 15% US based ETFs, and the rest are direct holdings. That means that the withholding taxes are mostly recoverable (4.16% are non recoverable (from 15% of the holding times 27.75% from the above calculation), but the rest may be, depending on the treaties Canada has with each EM country).

Is this correct reasoning?

If it is correct, are there any other EM ETFs that have mostly direct holdings in addition to ZEM? Also, why would you recommend XEC over IEMG and VEE over VWO, especially considering the lower MER for IEMG and VWO?

If my reasoning is not correct, why, and which ETFs would be best from a taxation perspective?

Thanks, and I hope my question is clear,

Fed

Q: I am wondering if any of the following do not hold all their international stocks directly (ie if they are an ETF of ETFs). I am pretty sure that XEF, IEFA, and IEMG do own all stocks directly, and I think VEE does not, but please correct me if I am wrong. I cannot seem to find information about the rest.

IEMG XEF VEE XEC IEFA VGK SPDW VWO

Thanks again,

Fed

Q: I am looking for a US dollar Emerging Market ETF that I can purchase for my portfolio

Q: I have recently been adding to my position in EEM. It is currently my biggest position. Should I sell EEM and replace it with IEMG due to the lower fees ? Thank you for this great service.

Q: Knowing Sapiens of 5i - 2 questions - do you think that over the next year some increase in exposure to emerging markets is appropriate and would you use VEE or XEC if so and IEMG for US dollar exposure or another US ETF - second might a reduction of exposure to Cdn banks seem reasonable over the next year (ie sell some TD and maybe some BNS) and buy some SLF or another financial Cdn equity for some greater torque - in other words do you suspect the banks may stagnate a bit over the next year and become income only to some extent - best guess please - appreciate your instincts - Ken of Yonge and Eg