What's the gain for your salesman, er.. advisor if you buy these funds? Did you ask about low fee index funds?
I would also question if they even have the ability to manage mutual funds.What's the gain for your salesman, er.. advisor if you buy these funds? Did you ask about low fee index funds?
Our financial advisor is suggesting that we start investing some of our non-registered funds in corporate class funds instead of tradional mutual funds (one company he suggested that has them available was Fidelity). This is supposed to give us some tax advantages over traditional mutual funds. What are your thoughts regarding these funds?
Thanks,
Arlene
sorry for bumping an old topic but i would also like to have information regarding thisOne benefit of the Corporate Class Funds is for incorporated professionals. If they invest excess corporate funds in these, they accrue capital gains, and can be removed from the corporation through the Capital Dividend Account in a very tax efficient way. (minimal or no taxable income until redeeemed, and then taxed as capital gains).
Can this be done via ETFs? i.e. which types of ETFs will appreciate with minimal taxable income and are pure capital gains upon redemption?
i politely told him to **** off, he came back with magical stories and wrong info but got me puzzled about the tax advantages of using corporate class funds.Personally, I would recommend that you spend less time listening to your friendly, neighbourhood advisor and more time studying the model portfolios at www.canadiancouchpotato.com
And, keep your fees as 'little' as possible.
Buy, hold, and prosper!!
Note: Many advisors will not recommend low fee ETF's because they are not licenced to sell them.
Either you can keep the money in your portfolio or you can pay a lot of it out in fees that really add up year after year after year, ad nauseum.
And remembver that many advisors are primarily mutual fund salespersons.
If you use an advisor at all, make sure that he or she is a 'fee only' advisor who charges you for their time but does not receive ongoing renumeration from the products that they promote to you.
Well, there are tax advantages.got me puzzled about the tax advantages of using corporate class funds.
I have not thoroughly researched this type of ETF but I recall one name that's popped up in other CMF threads as being Horizon BetaPro's HXS. Zero distributions since 2010 likely means capital gains are triggered on the sale of units only... Can this be done via ETFs? i.e. which types of ETFs will appreciate with minimal taxable income and are pure capital gains upon redemption?
http://www.horizonsetfs.com/pub/en/etfs/?etf=HXS&tab=overviewThe Horizons S&P 500® Index ETF (“HXS”) seeks investment results, before fees and
expenses, that correspond to the performance of the S&P 500® Index (Total Return) to the extent possible.
HXS is a tax-efficient way for Canadian ETF investors to get exposure to the S&P 500® Index (Total Return).
You are correct. The corporate class funds will have more of the income in the form of capital gains, with most of it deferred and very little distributed, so yes, it works very well in a corporation. It does not work all that bad personally, either, if you find yourself with a lot of non-registered money and in a high tax bracket.Any more thoughts on corporate class funds inside a corporation. Clearly they are of no value outside a corporation (unless you buy and sell like crazy) due to their high MERs. The question is whether there is a benefit inside a corporation where all income - whether interest or dividends - is taxed at a high rate on a yearly basis.