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Move from efund to ETF, superficial losses?

3974 Views 2 Replies 3 Participants Last post by  DrStan

I am about to do my annual rebalancing. I will also take the opportunity to sell my TD e-funds and purchase the equivalent ETFs. Does anybody know whether the superficial losses rule would apply in this case?
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It is hard to say. I would think that a mutual fund and ETF that track the same index are identical securities. But are they really? The ETF likely has a lower MER and hence a lower theoretical tracking error.

I haven't seen this question definitively answered anywhere, so to be safe, I would switch from a mutual fund to a slightly different index. For instance, if you are selling the TD Canadian Index Fund (e-Series), you might consider putting the proceeds in XIU, instead of XIC.
Or you can sell, wait 30 days, and purchase the equivalent ETF. This depends if you're willing to risk that the market will have a good run during the month you are out of it...
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