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This is my first post. I apologize in advance if this has been addressed several times already. I'm looking at holding an emerging market etf in my self-directed rrsp (with td) and I am wondering if it is better to hold the vanguard vwo instead of the ishares or bmo version which have much higher mer's. I realize this will involve washing my trades through a u.s. money market account. My thoughts are that upon retirement, you would simply pull from us stocks when the u.s. dollar is higher and pull from the canadian stocks when the C$ is higher.

I wondered the same thing about the S&P 500 vanguard vs the ishares canada version.

Thank you.

Will
 

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I think the lower fees are better for the long term

If you save 2% per year compounded for 30 years.. unless the USD is worth 40 cents CAD you came out ahead?
 

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There's an existing thread on the US ETF question. One of the co-hosts here, Canadian Capitalist, has a particular interest in the topic, and has pretty much convinced me... :). I created a little calculator page where you can enter the various factors to your own taste and get a sense of where the break-even point is and how much appreciation of the Canadian dollar you can handle. It does seem that if you can get a good rate on the US dollar for your purchase and will be holding for a decade or more it is a reasonable choice, especially inside an RRSP.

For something international like VWO I don't know, since the currency risk is a bunch of foreign countries, not the $US. I'm likely to go with the unhedged version for my emerging market segment, just incorporating that in the general diversification risk since it will be a relatively small piece.
 

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A great topic which is also appropriate for immigrant investors like us, who are moving in our funds into the loonie soon. Most of us would have our assets in our origin countries, I wonder how will this affect us later when we are to utilize the returns from these assets in Canada ? And do we need to start thinking abut hedging our investments against the CAD ?
 

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hedge for new canadians ? of course not.

no hedging allowed for the first 10 years of landed immigrant residency. The rule is: You comes here, You takes our country for better or for worse. Including the birdie currency.

surely they explained all this to you at the canadian embassy when they delivered your immigration visa to you.

you do have one of those, right, rox. They're known as landing permits. Or is a landing permit just another one of those frivolous & irritating bureaucratic details, like SINS & canada-based addresses, that you can attend to any time you feel like it ...
 

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hedge for new canadians ? of course not.

no hedging allowed for the first 10 years of landed immigrant residency. The rule is: You comes here, You takes our country for better or for worse. Including the birdie currency.

surely they explained all this to you at the canadian embassy when they delivered your immigration visa to you.

you do have one of those, right, rox. They're known as landing permits. Or is a landing permit just another one of those frivolous & irritating bureaucratic details, like SINS & canada-based addresses, that you can attend to any time you feel like it ...
The very fact that I have not sold off my current investments and all the other currencies that I am still holding means I am already hedging. I don't understand by what you mean as : no hedging allowed,... I rest my case,...:cool:
 

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A great topic which is also appropriate for immigrant investors like us, who are moving in our funds into the loonie soon. Most of us would have our assets in our origin countries, I wonder how will this affect us later when we are to utilize the returns from these assets in Canada ? And do we need to start thinking abut hedging our investments against the CAD ?
The Canadian dollar is pretty high right now... not a great time to be buying in ....
 

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rox how about walk your case over to the immigration division at the nearest canadian embassy & rest it upon them.
 

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A little off topic, but it's too bad that there wasn't a Canadian based version of VTI or VT. This would be a perfect opportunity for a company like BMO who are trying to get a foot into the ETF door. Are you listening BMO? (Or Ishares or Claymore, for that matter.)
 

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rox how about walk your case over to the immigration division at the nearest canadian embassy & rest it upon them.
Humble_pie, yeah, I am aware that it's good to go back to the horses' mouth, per se,... thank you.

In fact, have been calling CRA too a few times, and am now able to undetsand the tax structures and impositions quite well,.... certainly there are more to learn though,...
 

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rox you've posted here that you are seeking a non-resident account with a canadian discount brokerage. Canadian non-resident withholding taxes will be imposed upon every type of investment income in such an account according to the tax treaty between canada and the country in which you reside. Which btw does not seem to be the US of A.

tax credits, returns of capital & other tax fine-tunings apply to resident canadian taxpayers only, not to non-residents. To a non-resident, they don't matter a tinker's tit.

rox you've also posted that the applicable canadian non-resident withholding tax rate for residents of your country is 30%. And you have posted that you cannot tolerate this.
 

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Yes, I am very much aware of your infos as in Paras 1 and 2, no matter whether I am residing in the US of A or not, it does not make any difference. I don't see how the US of A comes into this discussion. It's more like I am a Tax Resident of Canada or Not a Tax Resident of Canada, right ?

And if I am a Tax Resident of Canada, then those calculations about Tax Benefits, etc, will come into play, right ?

3rd Para, Withholding Taxes : It's not 30%, it's only 25% everywhere onto dividends from Canadian Companies. And 30% onto dividends from US Companies. Just to let you know.

If I am going for capital gains, then that 25% or 30% would not matter at all, but no, I am going for the income in order to retire, so, I must find a proper and legal way to go around that 25%.

I appreciated your inputs,.....
 

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this keeping you up at night, rox ?

of course it matters that you have recently posted here, very clearly, that you are presently residing in the US.

the non-resident withholding tax between canada & the US is fixed at 15% by the tax convention between the 2 countries. There are some interest-paying instruments that are exempt from NR tax.

canadian non-resident withholding tax rates depend absolutely upon the particular tax treaty in force & effect between canada and whatever other country an offshore person may reside in. The basis is country-by-country. So the country in which you really do reside is of paramount importance.

the canadian NR rate for yourself, according to your previous posts, varies up to 30%.

there is no proper & legal way around this. You will forfeit the NR withholding tax until the day you immigrate to this country & obtain a social insurance number and a residence in this country. While you're at it, please immigrate lawfully. By. starting. at. the. nearest. canadian. embassy.
 

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I don't understand why anyone will want to move their money and investments into a country where they are yet to obtain legal residence.
It sounds like a classic case of putting the cart before the horse.
It's not like this is once in a lifetime opportunity going begging here in the frozen north; if anything, the market is probably over-priced right now.
 

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twig up, harold.

we all know that the mighty vanquisher of derek foster in sleepy ontario libraries can be sufficiently insightful here.
 

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Harold, don't worry about me, I can be in many places at any one time, and the days and night does not hold any difference for me. Like now,it's noon for me, but, of course for I just reached here, but thanks for your concern though.

Yes, that's what I am doing - lawfully and immigrating officially, hence the reading I have been doing. But, I shall not comment too much about Immigration Laws here. Perhaps I might venture near to certain laws concerning tax residency status because it affects me (and of course, everybody) when it comes to investments, and living off our nestegg.

I carry the confidence that I am nearing some great boundaries that provides a win-win situation for both the taxpayer and the Gov't too.

Harold - I wouldn't call it begging, we are bringing in money to be invested in the country. Overpriced, yes, but there are always gems to be discovered everywhere, we just need to find out where and to know where to look. Cold - yes, but some people love the cold, and it's not your fault,.. or mine, lol,...

Gentlemen, thank you,... you have provided all the negativities (or challenges ?) that we will be facing in this endeavour to invest in Canada, but I must say we have certainly brainstormed ALL these points at this at our end, and are aware of them.

It's good that you, Humble, pointed out all these, looks to me you are an immigrant too. I have seen your posts somewhere in another forum too, haha,... you must be investing at that place too. huh ?
 
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