Tax Efficient Investing – Horizons ETFs

Tax Efficient Investing – Horizons ETFs

It’s hard to understate the game-changing force that Exchange Traded Funds (ETFs) have induced in the financial investing landscape in recent years – especially here in Canada – let alone some of the tax efficient ETFs now on the market. 

According to National Bank’s recent figures, an incredible $37 billion flowed into ETFs (and that was just the year to date!)

Yet as I have referenced many times on my site, not all ETFs are created equal. Far from it!

Horizons ETFs

With more than 1,000 ETFs now listed in Canada, it might seem hard to choose what the top funds are.

Frankly, not so. I believe there are only a few dozen funds you and I should really consider for lazy but powerful long-term investing.

Horizons ETFs has some of those products in my opinion (no affiliation), and I highlighted at least one of them in my recent all-equity, all-in-one post here where it comes to HGRO.

VEQT vs. XEQT vs. HGRO Equity ETFs

All-in-one funds with some tax efficiency too!

With just one simple ETF selection, Canadian ETF investors (whether that be HGRO or other funds I have on my ETFs page below) can get a full asset allocation geared towards their self-determined risk/return objectives.

Read on about the merits of low-cost investing via Exchange Traded Funds (ETFs) right here.

Pretty amazing how far we’ve come on this in just a few short years…

Some of these ETFs can now be considered what Horizons has tagged as the “great investment democratizer” — an ETF option that can suit almost every retail investor.

As one of Canada’s leading (not to mention fastest-growing ETF providers) I had the privilege of chatting with Mark Noble, Executive Vice President, ETF Strategy at Horizons ETFs about their ETF line-up including their all-one-funds and beyond. We touched on the tax-efficiency of their ETF funds, why Mark feels investors should consider larger equity weightings in their portfolios, the classic case of overcoming home bias, how Mark invests his own money, and more.

Mark, thanks so much for your time recently and contributions to this site. I’ll put my questions in bold font so we don’t confuse readers with the My Own Advisor Mark back-and-forth!

No problem Mark! I’m happy to contribute to your site and it’s a blog that I know of and follow for what you do to help Canadian investors – so keep up the great work.

Kind words and thanks.

Before any discussion about Horizons funds specifically, I want to know what you make of the inflows into ETFs in recent years. I mean, as an investor in some low-cost funds myself, it seems retail investors are catching on and winning. Quick thoughts on that?

Horizons products aside, I think this trend is outstanding for investors. Whether investors choose to own some of our low-cost and tax-efficient products, or others by several of Canada’s leading fund providers, the evidence is clear: one of the greatest predictors of future returns for the retail investor is keeping their money management fees low while maintaining a consistent investing strategy.

We’re happy to contribute to this trend including education for investors.

There was some significant eyeballs on my site after I published this post comparing your HGRO fund to Vanguard’s VEQT and iShares product XEQT.

Clearly, readers are intrigued. Some readers sent me emails wondering/seeking more details about the corporate class structure of your funds. Two questions:

  1. What are corporate class funds; do these relate to ETFs as well as mutual funds?
  2. Can we explain corporate class funds in layman’s terms?

Horizons ETFs

Sure thing Mark.

To answer part of the first question, yes, ETFs and mutual funds are regulated the same way when it comes to the corporate class structure. The regulators in Canada do not view them as different securities, which is quite different than other regulatory jurisdictions I might add.

To back up a bit, your readers are likely aware that mutual funds pool money collected from many investors and use the money to invest in securities, such as stocks and bonds. Mutual funds provide investors with access to professionally managed money – for a fee of course.

Consider an ETF as a more efficient mutual fund in many cases that can be bought and sold on a stock exchange, during the trading day. I won’t go into too many more details because your readers are likely well-versed on the ETF concept and some of the benefits they can provide.

Corporate class funds, including the ETFs we manage at Horizons, operate within a structure that allows the ETF units to be held as a series of shares within a traditional corporation. As many of your readers might know, a corporation operates with profits and losses. So, for funds as part of a corporate class structure, the taxable events like capital gains can be traded off against any potential losses or distributions to the fund owner. The ability to offset the tax liability within the fund structure can be very appealing and tax efficient for many investors.

There are a couple of key benefits of this fund structure then, and why they continue to grow in popularity:

  1. There is the advantage of tax deferral. This is a consideration for personal and corporate investment accounts since reducing overall taxes is important for many investors.
  2. Related to point 1, if investors are investing this way, then there’s no reason to realize capital gains until you want to or have to – when they sell the ETF shares So, not only is there a tax deferral but potentially lower taxes paid overall when gains are realized.

Corporate class funds, including ETFs Mark, whether they are from our family of ETFs or other companies in Canada that offer them, might be very beneficial to investors who wish to own these funds in their taxable accounts, but these funds can also work well inside TFSAs, RRSPs, and other registered accounts.

Great stuff.

OK, I’ve got more questions from readers. One of them wanted me to ask you if you see any changes coming to corporate class funds in the near future. I mean, didn’t the federal government cite these funds as having an unfair tax advantages?

Great question and yes, I suppose our regulations and laws could always change. There could be changes to the capital gains inclusion rate, or the implementation of a lifetime cap to Tax Free Savings Account (TFSA) contributions, and lots of other potential changes. With regards to the proposed changes in 2019, that impacted the TRI ETFs, these regulations have only been proposed (in 2019) but not yet enacted.  Regulatory change is usually slow and complex as policy makers have to assess unintended consequences for their proposals in consultation with the industry.  At this point the 2019 proposals are a moot point since we’ve converted to the TRI ETFs to a corporate structure that allows us to be on side with the proposed legislation.

In terms of further regulatory changes, if any were to be proposed they would likely have to fundamentally change the use of the broader corporate class fund structure. This corporate class fund structure has been around for decades so we would not anticipating any sweeping changes to occur without industry consultation Hypothetically, though if the government for example eliminated the ability of funds to use the corporate structure, their historical operating procedure is to provide transition time for fund providers to make changes.  They typically don’t want to retroactively punish unit holders and firms that have been in compliance with existing laws.  The only exception to this was the how the government managed the income trust structure changes many years ago – it was not well received!

Any methodology or changes proposed by the government to date, in that 2019 budget announcement, will not alter our approach since we’ll be able to comply with any of the legislation they’ve shared to date.

So, should investors be concerned with our corporate class structure? The worst case scenario is potentially the government forces all corporate class funds or ETFs (including all providers) to deliver the returns of the underlying indexes to investors as taxable income versus have it be deferred under the current rules of the corporate class structure. However, as long as we can operate in this tax-efficient structure to support investors, we will.

That makes sense to me Mark and I suspect it would be a seismic shift if it were to even occur. So, it seems a corporate class fund structure is very appealing for taxable accounts. Silly question maybe, but are your funds better suited for taxable accounts over registered accounts (e.g., TFSAs, RRSPs)? Can you speak to that?

Happy to!

Yes, certainly we believe our ETFs are very appealing for taxable accounts, such as HXT (our S&P/TSX 60 Index ETF) or HXS; HXS.U (our S&P 500 Index ETF) but your readers might be very interested to know that many of our funds including the HGRO fund (Horizons Growth TRI ETF Portfolio) – the all-equity fund you linked to above Mark – has outperformed many benchmark peers. We can discuss why that is in more detail.

Here is a primary link for more details.

Perfect, so that leads me to this question on HGRO in particular. Do you feel there is a competitive advantage of owning HGRO vs. VEQT vs. XEQT?

Yes, and it has to do with our portfolio design in that fund.

Through our back-testing, when we looked at the NASDAQ, we saw an opportunity to design HGRO with a larger weighting in that index over our peers – and design the fund so it will deliver lower overall volatility and better returns. I mean, if you look at the S&P 500 right now, there’s an issue (with potential returns) when you strip out big tech.

At Horizons, we believe in a slight tilt in favour of the NASDAQ behind our larger allocation to U.S. large cap stocks. That allocation is expected to deliver very favourable long-term returns when compared to our peer group.

In HGRO, we’re talking about an all-equity fund, that invests in your corporate class ETFs. This HGRO fund is something I’m personally considering for my taxable corporate account or personal, taxable account in 2021. Many investors are wary of equities, too much volatility but I think many investors should learn to live with more stocks in their portfolio. What’s your take on that?

I couldn’t agree more with you!

I mean, there are the demographic reasons to own more equities with people living longer. So, returns are required for longer periods of time. I believe that needs to be reflected in any investor’s long-term strategic allocation.

Yet there are major investing risks with owning a good portion of your portfolio in bonds. For one, we know the inverse relationship between bond prices and interest rates. But I think more importantly investors are going to have to consider their risk relationship with bonds. Higher returns come from higher-risk assets such as owning stocks. This is just market dynamics at work. So, if investors are living longer, and needing more assets to draw down over time from their portfolio, it makes sense to own more equities from a tactical advantage.

I often find investors, especially do-it-yourself (DIY) investors struggle with risk concepts the most. Either they don’t take on enough risk (or are therefore far too conservative when it comes to owning too many bonds/fixed income assets for what they need) or they take on way too much risk (and tinker with their portfolio too often). Neither extreme is beneficial to good returns.

Let’s talk about your own portfolio. I mean, you’re the ETF strategist so are you an all-ETFs-guy or do you actually favour some “core and explore”? As a follow-up, do Canadians have far too much home bias in their portfolios – particularly when it comes to dividend paying stocks?

I’ll be honest Mark, I do follow a core and some explore strategy myself and I do so because it aligns with my investing tolerance for risk that I alluded to above.

I have no problem with investors owning a mix of core and explore, either our products or some of our competitor products for that matter, as long as they have a disciplined investment plan or policy in place. As we have discussed, that can be a major challenge for some DIY investors to stick to a plan.

When it comes to home bias, I think it’s another challenge to overcome. I recall one of the latest reports I read mentioned the average investor in the U.S. probably has close to 60% of their portfolio in U.S. equities. That’s not so bad given the role the U.S. market has on the world stage. Canada hovers between 2-4% of the global world market cap, so for Canadians to have 50-60% of their portfolios (or more) in just in the Canadian market I feel that’s far too high/too much home bias.

Relative to market cap size, I suspect many Canadian investors have far too much bias in financial, energy and material sectors. Now, if you have dividend paying equities in just your taxable account as part of your explore, then that makes strategic sense since I know you’re aware of the tax efficiency that Canadian dividend paying stocks provide in non-registered accounts. So, I do defend investors keeping those Canadian dividend payers like you do in your taxable for that reason.

(My Own Advisor: here are some links about that aforementioned tax treatment:

Get the 101 on our Canadian Dividend Tax Credit

Should you invest in a taxable account? If so, here are some considerations.)

But, I think if you’re going to leverage your registered accounts wisely, it’s best to diversify beyond Canada’s borders. I like Canadian banks for their dividends as much as other investors but by only focusing on that, you’re missing out on other sectors let alone the upside of other markets if you only look at Canada for investing success.

Of note, your readers may be interested to know I own some Horizons ETFs in my personal portfolio, I actually have one that is my largest single holding (that is a one-ticket solution – I will leave you to guess which one….) but I do hold some individual stocks as part of my explore.

Great insights and well-framed. I like your take on core and explore. Thanks for your time Mark!

Anytime!  I hope this information has helped your readership.

As a team, we aim to also help educate Canadians as well, I want your subscribers to know we’re happy to answer any questions about our Horizons ETF lineup, or our approach, anytime.

You can reach us by email at or by phone at 1.866.641.5739. You can also follow Horizons ETFs on LinkedIn, Twitter and Facebook and send us your questions or ideas by direct message there!

Tax Efficient Investing – Horizons ETFs Summary

Clearly, Mark Noble and his team at Horizons have the customer in mind and I was appreciative of our 30-40 minute discussion recently on these key subjects. His insights about core and explore, references to focus on total returns, how as investors we need to overcome our home biases, and encouragement to think strategically towards owning more equities was, for me, very reassuring when it comes to my DIY investing plan.

This is my Financial Independence Plan.

Should you have any questions about any Horizons ETFs or their all-in-one TRI portfolios such as HGRO, HBAL, or HCON, do drop them a line and I know they’ll be happy to answer anything.

Thanks for diving into this post and I look forward to your comments on these ETFs or other!


Added after posting!

Some readers had some specific follow-up questions – so here they are (thanks to the team at Horizons ETFs for the direct answers!)

Question 1: So, in holding HBAL or HGRO or the other “TRI” all-in-one fund in a taxable account, are there any capital gains to be incurred if/when those TRI funds rebalance x2 per year? I recall they are rebalanced at that frequency.

The ETFs have historically incurred capital gains (and losses) when they rebalance, however the determination of how much these capital gains are is determined at year end, and there can be instances where some or all of these gains can be offset at the fund level so they are not paid out. 

Question 2: Also, as a follow-up then, would there be any instance beyond selling HBAL or HGRO units in a taxable account by the unitholder whereby capital gains or a taxable event may have to be reported by the investor?

Yes, as mentioned the ETFs do generate some income, primarily returns from currency forwards they use to hedge out foreign currency exposure and in some circumstances potential capital gains from selling ETFs at a gain during the biannual re-balance periods.

Question 3: At tax time, each year, I assume I will get a T5 slip from Horizons summarizing my capital gains vs. dividends, etc. for tax filing needs with HGRO?

Yes, it’s very likely and I’ll explain why.

HBAL, HCON and HGRO are actually Trust-structure ETFs, the underlying TRI ETFs they hold are corporate class ETFs.  The corporate class ETFs in the underlying holdings don’t make distributions, however, HBAL, HCON & HGRO as the top-level funds, can have capital gains distributions from rebalancing portfolio and some income gains from managing the currency forwards.  In total though the level of distributions and their tax liability of the ETFs is substantially lower than competitor strategies which also make income and dividend distributions from the underlying ETFs.

Given that these ETFs rebalance semi-annually (ideally at a gain!) and use currency hedging, I would anticipate some distribution of capital gains and potential income gains from the hedging on an annual basis. Again, these distributions pale in comparison to the income received by competitor products that pay out investment income and dividend distributions from the underlying ETFs.

Question 4: Great details. So, this begs an example with a question. Is there an idea/estimate on the amount of capital gains, if any, an investor might have to claim when it comes to $20K invested in HGRO in any given year? 

Let’s take a look at the distributions for HGRO for 2020. 

HGRO paid out $0.17 in distributions last year, of which almost all of it was cap (capital) gains. That was about 1.40%, during a fairly sizable up-year in equity returns. On $20,0000, that’s about $280 in tax, of which roughly half or so would be capital gains, so in the vicinity of $140. It’s really hard to estimate what cap gains would be on a go-forward because it is dependent on market performance. 

Question 5: What might the expected, total MER be for clients owning HGRO in particular?

As per Horizons ETFs team at the time of this update (although all fees are subject to change…):

“HGRO’s MER is currently 0.16% and will not exceed 0.17%”.

A reminder for readers that MER is different than TER (Trading Expense Ratio). The TER represents the amount of trading commissions incurred when the portfolio management team buys and sells the assets for the fund. TERs commonly apply to equity funds. (Most fixed income funds do not have a TER because commissions for fixed income funds are already embedded in the price of a bond.) In many cases, the larger the fund’s inflows/outflows due to significant unit purchases or redemptions, the higher the TER.

As per Horizons ETFs team at the time of this update (although all fees are subject to change…):

“Worth noting that the Trading Expense Ratio (TER) is 0.18% but may be subject to change.”

Further reading:

Read on about MERs and TERs here.

Question 6: Fully appreciate that… Lastly, are there any foreign income / foreign withholding tax reporting using T1135 with HGRO? (I believe the answer is “no” but just want to double-check).

Mark, there is no T-1135 with HGRO as it holds Canadian-listed ETFs. In terms of withholding tax, we would expect it to impact the total return of HULC and HXQ, which physically hold the underlying, but that would be dealt with that the fund level and likely not recoverable from the end investor, since no distributions are paid out. There would be no FWT impact on any of the synthetic ETFs.

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33 Responses to "Tax Efficient Investing – Horizons ETFs"

  1. Hi Mark,
    I have a question about the wrap structure of the Horizon etf’s and counterparty risk. I believe that the Canadian Couch Potato website, years ago, stated that Horizon funds could not exceed 10% –a risk considered acceptable I presume. But I notice that, for example HSX is currently at a 40% counter party risk held by National Bank and CIBC I believe. Is this something we should be concerned about? I have a chunk of change in my cash account invested in HSX , HBAL and HBB . Is there anything to worry about? Can you offer an enlightenment on this issue?

    1. Great, detailed question that I cannot answer 🙂 I will share with Horizons team directly and see if they can reply to this thread.

      Thanks James.

  2. There may be some misunderstanding – regular rebalancing within these funds should not result in any taxable event or distributions to the unit holders – that’s kind of the point with these funds. They are very good options for a taxable account. The pre-emptive restructuring of the ETFs that took place in 2019 was a deemed disposition unless you filed an election w CRA. Horizons was very good at providing instructions on how to do that, my complaint was with my discount broker who didn’t provide any notice of the event. For those that have noted that their broker now shows the incorrect book value of these holdings, they will correct that (and return to your original book value) if you send them a copy of your election (section 85 election) with CRA. Hope that’s helpful!

    1. Thanks for the info John. Spent some time reading on Horizons website and looks like they have three all in one, rebalancing ETFs with no distributions. As you said, very good option for taxable accounts. Helpful point on the book value as well, appreciate it.

    2. Thanks John P. I’ll seek clarity from Horizons ETFs folks first and I know they are monitoring comments but they also have a lot on the go. I will pose this question to them directly and get back, but that was my assumption until I started thinking about it more. If you sell assets in a corporate structure, gains or losses can be offset. Since the HBAL, HGRO, etc. are holding the funds themselves and not corporate class funds then I think gains incurred may be a taxable event at rebalancing.

      Again, I will ask 🙂 Therefore, you believe we should be “good” going forward?

      Very helpful and I did read about various section 85 provisions on various sites.

      1. Hey Mark – looking at this thread closely, I can see some of us, including me, are talking about the corporate class (swap structure ETFs) – in particular HXT, HXS (your reader, BK, above, mentions there is a third) which have (intend to have) no distributions whatsoever; while others, including you, are more interested in the ETF portfolios like HBAL and HGRO which are different and appear to indeed have distributions (though not distributions of dividends). I only hold HXT and HXS so can only speak directly to those, I’ve just looked at the product sheet for HGRO. I agree it would be great to have Horizons provide a breakdown of which of their products achieve which tax efficiencies. Thanks for the coverage of this area!

        1. Most welcome John.

          I just emailed Horizons ETFs and I know they are great to get back to me. I like HXT and a few other funds but I prefer HGRO given it’s a simple all-in-one and considering that myself for a taxable account.

        2. Here are the answers from Horizons – re-posted in the article!

          So, in holding HBAL or HGRO or the other “TRI” all-in-one fund in a taxable account, are there any capital gains to be incurred if/when those TRI funds rebalance x2 per year? I recall they are rebalanced at that frequency.

          The ETFs have historically incurred capital gains (and losses) when they rebalance, however the determination of how much these capital gains are is determined at year end, and there can be instances where some or all of these gains can be offset at the fund level so they are not paid out.

          Also, as a follow-up then, would there be any instance beyond selling HBAL or HGRO units in a taxable account by the unitholder whereby capital gains or a taxable event may have to be reported by the investor??

          Yes, as mentioned the ETFs do generate some income, primarily returns from currency forwards they use to hedge out foreign currency exposure and in some circumstances potential capital gains from selling ETFs at a gain during the biannual re-balance periods.

  3. If you hold the “TRI” ETFs (like HXT, HXS) it’s important to keep your eyes open for structural changes. When they restructured these last year there was a deemed disposition (a taxable event) unless you filed an election with CRA. Horizons was very good at providing support and instructions on how to make the election, but I wouldn’t have known about the restructuring except through my own research (I hold these through RBC Direct who did not provide or forward notice to me).

    1. Good on the team to flag this John. I recall reading about those elections which might be a concern in a taxable account for sure.

      I’m tempted to own HGRO in a taxable account at some point. The only thing I need to keep in mind is any HGRO rebalancing may be subject to capital gains incurred. I wonder if the Horizons ETF team can speak to that? I assume I will incur a capital gain if HGRO rebalances at a gain during the year? Thoughts?

      1. I began helping my Mom with her investments a few years ago and we shifted her entire non registered account into a basket of the Horizon tax efficient swap ETFs (HXT, HXS, HXDM, HBB). Thinking was geared towards simplicity as tax efficiency as she doesn’t currently require any income from her non registered account.

        We went through the same paperwork last year with the change in structure of these funds, but avoided any capital gains with the election to CRA. Although a little onerous I found communication from Horizon was good and hopefully a one time occurrence. We do have the same issue with her online brokerage (TD) showing the inflated book value; maybe a good reminder to ensure you keep track of ACB on your own as well.

        Enjoy the posts and discussions on this site, keep up the good work Mark!

        1. Yes, I read about that BK – thanks for sharing your example as well re: election to CRA.

          I’m more curious about holding such funds and then the go-forward capital gains hit now and then when these funds re-balance. More specifically, with HGRO in a taxable account because it holds the corporate class funds.
          My understanding could be wrong but if they (Horizons ETFs) rebalance HGRO in a taxable account, you’re on the hook for a potential gain at that time. Thoughts? I’ll see if Horizons can weigh in.

          1. Good question, would like to know as well. All in one ETFs like HGRO that automatically rebalance weren’t around when we set this up a couple years ago. Would certainly be a nice option for taxable accounts; we don’t rebalance as often as we should within this account to avoid the capital gains and changes in ACB.

            1. fyi…re-posted in the article!

              So, in holding HBAL or HGRO or the other “TRI” all-in-one fund in a taxable account, are there any capital gains to be incurred if/when those TRI funds rebalance x2 per year? I recall they are rebalanced at that frequency.

              The ETFs have historically incurred capital gains (and losses) when they rebalance, however the determination of how much these capital gains are is determined at year end, and there can be instances where some or all of these gains can be offset at the fund level so they are not paid out.

              Also, as a follow-up then, would there be any instance beyond selling HBAL or HGRO units in a taxable account by the unitholder whereby capital gains or a taxable event may have to be reported by the investor??

              Yes, as mentioned the ETFs do generate some income, primarily returns from currency forwards they use to hedge out foreign currency exposure and in some circumstances potential capital gains from selling ETFs at a gain during the biannual re-balance periods.

    2. I hold HXT and got hit with the deemed disposition. The paperwork was very complicated and my tax software (Studio Tax) did not have the fields to fill in the required data. I wound up submitting my taxes and immediately writing an appeal to CRA which was awarded some 3-4 months later. Now I have the new headache that my online brokerage lists my book value at the deemed disposition level, but it should properly be at the pre-disposition book value, which was much less. A record keeping and reporting headache for sure.

      Watch out for HXS – the trading expense ratio (TER) offsets any savings of foreign withholdings tax.

      1. So that’s the thing right Bart, with any rebalancing in a taxable it’s a deemed disposition then – potentially subject to capital gains? Sorry to hear about the CRA headache but could this have happened to any other fund? Or, would managing a stock (or fund rather) without deferral of distributions be more straightforward for most common investors? Curious on your take.

        1. Yes, that’s exactly the case – the whole point of HXT was to avoid dividends or capital gains until I melted it down in retirement. Having a major taxable event pre-retirement would negate the whole effort, but any who invested in HXT knew about the regulatory risk so we can’t exactly call foul.

          I built my portfolio as a CCP with individual ETFs, using HXT in a taxable account for the bulk of my Canadian exposure. I got carried away with trying optimize specific holdings in RRSPs vs. TFSAs vs. taxable accounts and I’ve since learned that I overlooked the after-tax allocation in my RRSP. If I were to start from scratch, I’d probably put VEQT in all accounts and call it a day – I’m not sure the incremental gains of splitting it up as I have is really worth the headache or will produce a life-changing difference in the end, and will make rebalancing in RRSP meltdown more difficult – I’d love to hear others’ thoughts on that.

          If we see a combination of a major market pullback and budget threats to increase the capital gains inclusion rate from 50% to 75% or more, I may liquidate HXT and roll over to an all VEQT portfolio. If we don’t, I’ll likely leave it as-is and direct new funds to VEQT till I retire.

          1. Interesting Bart.

            Maybe I should just stay the course?

            Meaning – taxable = CDN stocks only.
            Put any ETFs, CDN stocks, U.S. stocks, etc. = registered. This way, no capital gains to worry about 🙂

            VEQT is interesting but would likely only put that into registered.

            As for RRSP meltdown, stay tuned, I have some news to share in my next Weekend Reading on a new venture!

            1. Yes, this is exactly as I have it with some VUN in a taxable account as well to balance out the roughly 1/3 Cdn, 1/3 US, 1/3 EAFE/EM allocation I’ve got.

              I’m looking forward to your RRSP meltdown ideas! This is a topic I have been reading lots on over the last couple of years.

              1. Same. I’m trying to find some case studies and means to draw down my RRSP responsibly while trying to manage other income streams in the coming years. More to come 🙂

  4. I think one thing I’d really like to see is a breakdown of all the risks associated with this approach, over and above regular ETFs that hold the assets directly.

    Like if some counterparty should default, what are the worst case outcomes? I know there are more, but I don’t think its ever been aggregated in one location.

  5. Over 1,000 Horizon ETFs, but you only need consider a few dozen? So who’s selling the rest to whom? I doubt they’d continue to offer them is there were not buyers.
    I’ll stick to suggesting that one select from 20 or 30 quality DG stocks (Cdn & US) which are just as tax efficient, with no fees, will provide sufficient diversification, and are likely to provide one with more net income than a bundle of ETFs.

    1. Thanks cannew. I’m still a fan of many dividend paying stocks, and own many, but as you know we have some different philosophies on how much diversification one needs 🙂 You’re in a great place with your dividends > expenses but most of us aren’t quite there yet!

      Just like many other investments, there are funds to avoid for sure. I think Horizons ETFs deserve some consideration based on their structure and approach.

      Happy New Year!

      1. Hi Mark,
        speaking of diversification what do you think of bitcoin as a new asset like Gold ? prices of bitcoin has been flying like crazy the volatility is insane and yet i hear of more people and now i read about bloggers and institutions who’s betting that prices will keep going up.
        I know that no one has a crystal ball but would consider putting any amount of money into Bitcoin ?

        1. I thought of buying QBTC or QBTC.U (US $$) in my TFSA in particular, early 2021 for the TFSA. I did not. I bought some XAW and figured the latter was a simple approach to diversification.

          I understand the premise of bitcoin and the technology that supports it but I see much of this is really about speculation at this time quickly driving up prices. Is this the real deal? Are these investors onto something more than the masses? Maybe. I don’t know.

          I do believe however if you’re OK to risk some money (risk = potential for reward, not a given) then I would only personally “risk” no more than 10% on any collection of risky investments in a portfolio.

          I feel this way because the same things that can make you wealthy can also make you poor when it comes to risky investments.


          1. Mark it’s really insane that at today’s prices less then 8 bitcoins is worth 1 million dollar…what ? 8 bitcoins 🙂
            but to me and I’m 100% sure to you and most people here if we have a choice of 1 million$ in stocks or 1 million in bitcoin I’m sure will chose the stocks portfolio because 1 million $ in stocks produce income and gives you ownership in companies all over the world , bitcoin with the volatility that comes with it will give me a heart attack.
            I’m thinking of throwing 1 or 2k into bitcoin or blockchain just for fun and let it ride either way 🙂

            1. I’ll take a $1 M diversified stock portfolio all day myself Gus but I don’t own any bitcoin yet. Just seems far too speculative for me. I’ve gotten this far by being boring. 🙂

        2. I don’t understand crypto currency. Is it an investment or is it currency? How is Bitcoin valued?

          No regulator. No insurer. Created by people solving math puzzles?? Digital wallet… Cloud or computer. Security…much hacking. Wild fluctuations. Anonymity. Supports much illicit activity.

  6. I hold HHL (Horizons Health Care Leaders) and it is a solid dividend payer. I think I may have it in the wrong account. I bought it, as a very new investor, inside my RRSP. I should have had it in my TFSA but it would cost me dearly, come tax time, to have a withdrawal from my RRSP.

    1. It seems to me Horizons ETFs are structured well for both taxable and tax-deferred (RRSP, RRIF) or tax-free investing (TFSA). You can always reach out to them for guidance but I can appreciate they don’t offer direct investing advice.


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