[dave4242]

Hi,

I'm trying to figure out whether leveraged-ETFs and/or inverse leveraged ETFs are qualified (allowable) investments in an RRSP.

I've been reviewing the CRA documentation on this, and it seems like they are allowed, since they are listed securities. However, since they are derivatives (or based on derivatives), it seems like they may be in a gray area.

(And yes, I realized that leverages ETFs can be risky and should not be held for long periods of time....)

Any thoughts?

Cheers.

 

[jerryhung]

Why wouldn't they, if they're listed?

At least for me, I have owned TQQQ/SOXL and sadly UVXY in my USD RRSP (and regular account) no problem

 

[Spudd]

I'm pretty sure people can hold options in their registered accounts too, which are derivatives, aren't they? I think it's fine.

 

[dave4242]

Why wouldn't they, if they're listed?

Because of this: 1.16 Except for certain derivatives, any security that is listed on a designated stock exchange (as described in ¶1.17) is a qualified investment.

 

[dave4242]

I'm pretty sure people can hold options in their registered accounts too, which are derivatives, aren't they?

The CRA website explicitly lists options as a qualified investment. The same is not true of leveraged ETFs or derivatives.

An Option is a contract between two parties, tied directly to the underlying value of a specific stock. A derivative is a different animal, and usually much more complicated.

 

[Spudd]

The CRA website explicitly lists options as a qualified investment. The same is not true of leveraged ETFs or derivatives.

An Option is a contract between two parties, tied directly to the underlying value of a specific stock. A derivative is a different animal, and usually much more complicated.

That'll teach me to chime in on things I don't have proper knowledge of.

 

[dave4242]

That'll teach me ...

No worries, all good! Cheers!