Canadian Money Forum banner

Advice for my little brother

14K views 36 replies 16 participants last post by  OntFA 
LateStudent,
I think there is some overlap between the international index fund and the European and Japanese index funds. If you look at the top 10 holdings of the international index fund, it has listed:
Royal Dutch Shell Plc 1.9%
BP PLC 1.8%
BHP Billiton Ltd - Common 1.7%
Nestle SA 1.7%
HSBC Holdings Plc 1.6%
Toyota Motor Corp - Common 1.4%
Total SA - Common 1.4%
Vodafone Group PLC - Common 1.3%
Roche Holding AG - Common 1.2%
Novartis AG - Common 1.2%

Whereas the European index fund has:
Royal Dutch Shell Plc 2.9%
BP PLC 2.7%
HSBC Holdings Plc 2.5%
Nestle SA 2.5%
Total SA - Common 2.2%
Vodafone Group Plc 2.0%
Novartis AG - Common 1.8%
Roche Holding AG - Common 1.8%
Telefonica SA 1.7%
GlaxoSmithKline PLC - Common 1.7%

There is probably no need to hold both the international index fund and the other two in the same portfolio.

Also, it's my understanding that if you hold international stocks (even funds that hold international stocks), you can't recover the withholding tax on foreign dividends and interest payments on stocks/units held in the TSFA. Basically, this income is not fully tax free. If you hold international stocks in a non-registered account, you get to claim the withholding taxes paid and receive a tax credit for the foreign taxes paid. There is no such benefit for international securities held in the TSFA.

In relation to what Rickson9 said, I think there is benefit from having multiple funds tracking different indices. By diversifying across different markets, you can reduce the overall variance of your portfolio and, in theory, realise a better risk-adjusted return than holding a single index.
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top