ETFs

Welcome to my ETFs page.  On this page I will share some articles about ETFs, how I use them, what some considerations might be for you – as we march on our path to owning a $1 million investment portfolio.

Read about ETFs in my 101 post here.

What makes a great ETF?

How many ETFs are enough?

Here are some ETF considerations for your portfolio.

Here are some great ETFs (for exposure to thousands of stocks at a low-cost) for your TFSA.

Why do I like Exchange Traded Funds (ETFs)?

  • So we can obtain near-market performance less minuscule money management fees.
  • To obtain great diversification (from companies and countries from around the world).
  • To “set and forget” part of our portfolio.

What are my favourite low-cost diversified ETFs?

  • Canadian equity – XIU or XIC or VCN or ZCN (inside TFSA or RRSP).
  • U.S. equity – VTI (inside U.S. $$ RRSP) or VUN (inside RRSP).
  • International equity – VXUS (inside U.S. $$ RRSP) or VXC or VDU (inside RRSP).

What are my favourite low-cost dividend ETFs?

My ETF strategy

After buying and holding about 30 Canadian dividend paying stocks and some U.S. dividend paying stocks for income and growth – we focus on owning U.S.-listed ETFs in our RRSPs for extra diversification.

For example we own U.S. ETFs such as VYM and HDV.  Why?

  1. We get solid yield (income) of about 3%.  This income will be used to pay for our expenses without selling units of the fund.
  2. We get capital gains over time.  These ETFs offer growth in addition to income.
  3. The management fee is low costing next to nothing.  These ETFs charge some of the lowest fees available across the financial industry.
  4. We avoid withholding taxes.  U.S.-listed ETFs held inside an RRSP avoid withholding taxes of 15%.  It’s worth reminding you foreign dividends are taxed at your marginal rate otherwise. Be aware Canada has tax treaties with the U.S. and many other countries.  Those tax treaties waive withholding taxes on U.S. stocks or U.S. ETFs in registered accounts like RRSPs, RRIFs and Locked-In Retirement Accounts (LIRAs).  TFSAs don’t apply to these tax treaties.  In a TFSA you must pay 15% withholding taxes on distributions earned using a U.S. ETF or 15% withholding tax on a U.S. stock like Coca-Cola.

To learn more about ETFs consider visiting these sites from leading ETF providers:

Bank of Montreal ETFs – including my great deals with them.  I can save you hundreds of dollars via my promo code MYOCASH for My Own Advisor’s special offer when opening your BMO InvestorLine account!

iShares Canada

Vanguard Canada

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