Thanks for sharing this, it gives me alot to think about. For now I will keep my current high yield US funds in my TFSA but will not buy more. Id be interested to see a performance comparison after 1 year of QQQY and JEPY being out
it will come out near the end of the year. then we can compare with QQCL and USCL. im pretty sure you would be better off with the Horizons Ones. dont forget that the performance of QQQY and JEPY does NOT include the -15% tax , QQCL and USCL Performance will be NET of all fees and withholding taxes (included in the fund)
For me i think its a good thing to hold high yield etf like the YieldMax one in a TFSA because they pay a huge yield and even if we got the 15 % withholding tax it's still pay good
Yeah if the yield is really high even with tax and exchange fees its still a good income. Lower yielding etfs 30 or less I would agree with not putting it in non reg. I got my qqqy jepy in tfsa now. Had it in non reg.
No, you will ended up getting much less return if putting in non-rrsp. You will pay tax withdraw from rrsp but you gotta remember you also get tax credit when contributing, and why would you even touch rrsp before retiring, you lose that contribution room forever.
@@slabsetters The argument is keeping it in a RRSP vs a TFSA or cash account because in an RRSP there is zero withholding tax. TFSA still gets hit with the withholding tax. That being said, if you want the flexibility of withdrawing the money when you want without penalty and the withholding tax only takes about 1%, 2%, or 3% hit on the monthly yield on cost, it's not worth it to put in an RRSP. If you don't want to touch it until you retire then sure put it in an RRSP. 15% sounds like a lot, but it actually reduces your monthly yield by a couple % more or less when you calculate it.
Couple of thoughts… putting high yield funds in a rrsp allows the high yield to compound which is important over the years however I hold some high yield funds in all three of my accounts. I like being able to use the higher income now instead of waiting for retirement. After all if total return was all that mattered I would be a growth investor not an income investor. I think it’s what strategy helps me live the best quality of life now while balancing that with the future.
Just ran the numbers on Defiance QQQY, in your RRSP you will make 42% and in your TFSA or CASH account you will make 36% after paying the 15% withholding tax. I'm meeting with my accountant regarding getting reimbursed for the withholding tax, I will update after meeting with him.
Good examples. However, I'm sticking with JEPY and QQQY (within a cash account) to fund other CAD based CC ETF like HYLD, SMAX, QMAX, HDIF. I'll give it a 6 months and re-evaluate.
Were you thinking of Norberts Gambit when transfering over to US account? I have CONY in my taxable account. 540 shares received today $1,940.80 - 291.11(15% tax)=$1649.69 Still a nice return...for now. I used the returns to buy more Canadian ETFs such as HYLD, HDIF, HDIV, and USCL...
If you take CONY's close price today of $23.15 and calculate the dividend yield for the month that is 15%. If you subtract the withholding tax it's still about 13%. Your yield on cost may be different from this depending on what price you bought CONY at, but its still better than anything else. Keeping it out of a cash account or a TFSA to avoid a 2% hit when it allows you the flexibility to buy other ETFs and to withdraw without penalty if necessary isn't worth it to keep in an RRSP.
where is a there a canadian holding that can we get the returns as high as what comes from YM ???? .. even with skimming 15% off the top?? .. PLEASE LIST THEM .. I have in TFSA the following - CONY, JEPI, JEPQ, and SCHD .. what is an equivalent? .. I am US born and living in Canada, so I have to file US anyway..... no matter what, so it makes sense to me to hold the high yield in TFSA, so that saves me paying canada tax I have US stock in regular account and it will stay that way .. the irs doesn't see canadian investments the way canadians do
I ran the numbers with my accountant, US stocks that generate dividends in your cash account are taxed as foreign income and you also lose 15% off the top. Anything that pays less than 25% can be replaced by Canadian stocks like BANK or DGS which also have the benefit of being taxed at a lower rate, right now I hold CONY, NVDY and YMAX in my cash account, YMAX may get replaced soon depending on if they drop their dividend payment this month, they make more sense being on drip in an RRSP than in a cash account depending on your finacial needs
be careful, its U.S. LISTED stocks that generate F income. things like QQCL USCL etc. have only U.S. stocks but because the fund is Canadian listed, there is 0 to no foreign income. always look at the distribution breakdown on the funds website, not an "estimate from an accountant
I believe as a Canadian you would also get a foreign tax credit (of up to 15%) for those taxes withheld. Depending on your personal tax situation, this could potentially reduce / negate the US withholding tax downside from holding these high yield US listed securities.
Yes, it is shown in box 34 of the T3 slip which identifies the amount the fund paid in foreign tax. That amount usually reduces the amount of tax you owe but you do not always qualify for the full amount. In most cases you get 100% of it but it depends on some ratio between your taxable income and tax payable. Moreover, I am not sure if the amount in box 34 represents the entire 15% withholding tax.
Nice video Adrian explaining where to hold these high yield U.S. listed funds! I have been just thinking about this recently. I think as long as the yield remains high, some people will be holding these funds outside of RRSP. I also think these funds are bit too new and you should do a 1 year recap video and go through the same comparisons. That would be interesting to see. 😀
I wish you had referred to your amazing video with the withholding tax table. It’s an old one, but it represents so well what the tax implications are 😊. Thanks for comparing the US vs CAD fund’s total returns.
5:01 if you compare a same etf that holds us stocks, one traded at NYSE and the other traded at TSX, the MER on the canadian one will have higher MER because they are handling on the back the 15% withholding tax.
I think even with the withholding tax it’s still worth it to hold these high yield etfs in a TFSA. I myself have started investing in these in my TFSA starting with TSLY and planning on QQQY and YMAX. The reason being is I’m getting close to maxing out my TFSA contributions and once that happens I want to use the distributions from these etfs to continue to fund my investments
Well explained Adriano! I believe with so many people getting into these amazing funds it can be tempting or confusing as to what type of account is best for what CC find ❤
Good video, but maybe you could explain the full reason why yield is not equal to total return. For me, it means if QQQY yields 40% and TR is « only » 15%, it means I have to re-invest the rest of the distribution to balance the NAV depletion that may happen
This is how i see the returns on these types of funds.Total return in this case equally the dividend minus stock price depreciation. For example a 40% yield and a -25% share price after 1 year = 15% total return. A 40% dividend doesn't equal a 40% return?
So I currently hold 1000 shares of TSLY down over $5600, what's the Canadian equivalent for TSLY? Other than YSTL which I already have lots of Sure I would like to sell it and move it out of my cash account but I will create a capital loss. I see no point in selling it at this time. I will just wait it out and see where it goes the next 2-3 years
I disagree . Jepi and jepq, in my opinion, are high-quality etfs, so I don't mind paying 15 percent withholding tax, we all gotta pay tax anyway you look at it. Again, that's just my opinion, but I love your channel. Keep up the amazing work .
It would be great to see a more in depth video on this with more comparisons. I think it would be really helpful when trying to pick an ETF to invest in.
QUESTION: These payouts are distributions (not dividends). How is this taxed in a regular cash/margin account in Canada. 1. Is this considered income and fully taxed at your marginal rate the same as interest is. Or 2. Is it considered a capital gain and taxed at 50% in your marginal rate.
The dividends that the U.S. companies pay out in U.S. ETFs will be viewed as foreign income and taxed as interest at your marginal tax rate in Canada. The covered call premiums that the ETFs collect will be taxed as capital gains at 50% of your marginal tax rate. But sometimes the fund manager will designate the capital gains as ROC so that you do not have to pay tax on them this year. This means that ROC will lower your ACB which will increase your capital gain when you finally sell the fund. Hence, ROC is effectively deferred capital gains.
If you buy US stock or fund directly there is a 15% witholding US tax. on dividend. If a Canadian fund (manager) buy US stock the fund also pay the 15% US tax. Canadian funds who invest in US stock do not get a free pass they also get the dividend 15% tax witheld The difference is you do not see it.
If we are living off the income why should we care about the total return? Why not take the higher yield net of conversions and withholding fees as income investors? The goal is replacing our work income no?
I agree, as a true income investor your focus should be on yield so that you can continue to pay for your living expenses. That said, I would still like the fund to maintain its value so that I don't have a loss if I sell it. But with a 15% yield, that may not be possible in most time periods. However, this time period is different because the markets are not at peak. The 15% yield is not high because the payments are high but rather because the market prices of the funds are low. When the markets recover beyond where they were 2 years ago, I expect the income funds to go up with them while maintaining their current payment schedules.
If total yield doesnt equal total return why do ppl favor total yield? From my understanding , you get more cash, but if you spend it all you just burn through your nest egg faster. Why dont ppl take less yield funds and have the ETF effectively reinvest that extra yield they don't need?
@PassiveIncomeInvesting Don't I know it! My only point was there is a way to buy, sell and receive dividends without getting hit with currency conversions. Love your channel and appreciate all you put into it (also a subscriber). Thanks!
Excellent video. Would love to see a follow up video regarding the performance of QQQY and JEPY. Since these 2 ETFs are core positions for you, how long will you hold on to them with each month passing resulting in a lowered distribution. It has been a great ride so far...
well, I have decided to open a RRSP and use some TFSA dividends to fund it...not sure what is going in the RRSP yet...maybe I'll take a look at your RRSP and get some ideas there.
Yes, but the fund company gets stuck with the 15% withholding tax. You will see the amount in Box 34 of your T3 slip which will entitle you to a partial or full tax rebate of the amount, known as the Foreign Tax Credit.
I have CLM in my TFSA, the 15% withholding and Wealthsimple exchange fee eat up my income. Just waiting for CLM to go up then will swap to CC or CC + lev ETF. How do I calculate my CLM real yield if my average cost is 8.50?
having more US cash dividends is much better than Canadian . its a stronger currency . so i disagree regarding currency fees .. i convert inside Questrade . its a decent rate too
I’m holding a portion of high yield funds in my cash and TFSA accounts. The math still works. Yields are much higher than the majority of our Canadian funds.
Found you board earlier today, just what I was looking for. Watched several videos already. Retired income investor, what are your thoughts on ETFs like PFF, HYGH, FPEI ? Got a bunch of JEPI, QYLD, RYLD and the such
You bought them without understanding what you bought 😂😂. They are Canadian Listed both you mentioned. No Taxes, inside your tfsa ! Adriano is talking about US listed ETFs. HYLD and USCL is Canadian listed etf. Hope you get it now funny boy 😂😂
Yes it’s funny how his tune has changed. I have no issue with him changing his mind but don’t profess to know everything about investing if you’re making it up as you go along. He was very adamant about returns not mattering when I first started watching. I do appreciate his research and information on covered call etfs though and will continue to watch. No offence intended here just my 2 cents less the 15% wht 😊
I am not clear if the 15% withholding tax is applied to the Canadian listed ETF at the management level. I think the Canadian ETF gets hit with it too. That being the case, if the total return between the U.S. listed ETF and the equivalent Canadian listed ETF is similar, it cannot be because of the withholding tax. More likely, the exchange rate or the investment strategies of the ETFs. Correct?
If the underlying security is USD, income from that underlying will get taxed (regardless of if the etf is CAD listed). Look out for T3s coming up and check under ‘Foreign Income’ section
@@JH-py9wf Yes, I agree and you confirmed my point: the return of the Canadian ETF is not keeping up to its U.S. counterpart as a result of saving on the withholding tax; it's stuck with that. It is keeping up because it is doing a better job while having a 15% disadvantage.
Norbert’s Gambit ;) you were thinking of where you exchange Canadian dollars into USD for free. Good video, thanks for sharing, this subject needs to be brought up every now and then to remind investors and make aware to newer investors.
dont funds that hold US already have the 15% taken off by the fund manager like HYLD, so im not understanding what the difference would be with holding US listed in cash or tfsa in regards to how the 15% witholding tax works, and if there is a foreign tax credit for cash account holdings depending on how much you would get back wouldnt that offset the 15% by a large amount thanks
yes they do, this is why comparing the performance is important. is JEPQ has a 25% return and QQCC has a 25% return. QQCC is automatically superior because the performance already includes the fees and taxes, whereas the JEPQ one does NOT.
Hi Adrian got a question: thanks for the great videos you make. I understand what your saying but if you look at the dividend per month on QQQY - JEPY etc..thats very high dividend even when you pay the withholding tax of 15%. If i look at the Canadian ones thats gives no more than say $00.20 till around $00.25 cent. (QQCL or USCL etc) if dividend is most important are you still say no US in TFSA.....or see i things over....
is it still a good idea to hold what i have and invest the dividend right now in the Canadian one... or better to sell right away since I'm not yet in a big loss and with the dividend i already got......@@PassiveIncomeInvesting
WRONG. THE CANADIAN Fund is still paying that 15% withholding tax...you just don't see it. But in the background the US government is still stripping off 15% of that generated income.
As I believe others have mentioned, it would have been nice if this video also showed the math either proving or disproving holding High Yield US Listed funds in a TFSA.
hard to do... but the performance of the Canadian ETFs includes the 15% tax (as they are managed internal to the fund) and the U.S. ones do not include it. So the way i look at it, its probably approx. 15% less performance
I've got a lot of US dollars in a non-registered account. I'm considering investing in canadian listed covered call ETF's that invest in us dollar stocks (not us listed ETF's) to generate US dollars income and to spend using a US dollar credit card. I believe the only tax implications is only the withholding taxes paid by the canadian listed etf of which I will receive a T3 or T5. Withholding taxes paid by the canadian etf would be on any dividends received and the income generated by the covered calls. Question: Is the income from covered calls still treated as a capital gains by canada gov. or regular income by US gov. for the owner of the canadian listed etf??
For JEPY and QQQY where the distributions are almost 100% return of capital, you’d have to be an absolute idiot to hold it in a non-retirement account. You’d be making cash donations to the IRS every month😂
I have USA$s that I cant put into my USA$ RRSP account I don't want it sitting around paying me nothing I don't want to convert it to CDN$s so I put it into HYLD.U in a non-reg account to make USA$s . What else can I put my USA$s into that has a good return for my non-reg account to make USA$s !
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Thanks for sharing this, it gives me alot to think about. For now I will keep my current high yield US funds in my TFSA but will not buy more. Id be interested to see a performance comparison after 1 year of QQQY and JEPY being out
it will come out near the end of the year. then we can compare with QQCL and USCL. im pretty sure you would be better off with the Horizons Ones. dont forget that the performance of QQQY and JEPY does NOT include the -15% tax , QQCL and USCL Performance will be NET of all fees and withholding taxes (included in the fund)
For me i think its a good thing to hold high yield etf like the YieldMax one in a TFSA because they pay a huge yield and even if we got the 15 % withholding tax it's still pay good
I agree, either you pay 15% up front or 30% or more when you withdraw from the RRSP.
Yeah if the yield is really high even with tax and exchange fees its still a good income. Lower yielding etfs 30 or less I would agree with not putting it in non reg. I got my qqqy jepy in tfsa now. Had it in non reg.
No, you will ended up getting much less return if putting in non-rrsp. You will pay tax withdraw from rrsp but you gotta remember you also get tax credit when contributing, and why would you even touch rrsp before retiring, you lose that contribution room forever.
@@slabsetters The argument is keeping it in a RRSP vs a TFSA or cash account because in an RRSP there is zero withholding tax. TFSA still gets hit with the withholding tax. That being said, if you want the flexibility of withdrawing the money when you want without penalty and the withholding tax only takes about 1%, 2%, or 3% hit on the monthly yield on cost, it's not worth it to put in an RRSP. If you don't want to touch it until you retire then sure put it in an RRSP. 15% sounds like a lot, but it actually reduces your monthly yield by a couple % more or less when you calculate it.
@@Martmi29 unless you have no rsp headroom
RRSP not good for some of us .. high tax when retired ... so we have no choice but use non reg etc
Couple of thoughts… putting high yield funds in a rrsp allows the high yield to compound which is important over the years however I hold some high yield funds in all three of my accounts. I like being able to use the higher income now instead of waiting for retirement. After all if total return was all that mattered I would be a growth investor not an income investor. I think it’s what strategy helps me live the best quality of life now while balancing that with the future.
good points .. after all dividend income is what we want to have a better life NOW . why wait
yup!
Just ran the numbers on Defiance QQQY, in your RRSP you will make 42% and in your TFSA or CASH account you will make 36% after paying the 15% withholding tax. I'm meeting with my accountant regarding getting reimbursed for the withholding tax, I will update after meeting with him.
in the TFSA you cannot get it back. in the cash, you can get a small credit
Yes, pls update us - thank you!
May you give a update on this subject ?
Good examples. However, I'm sticking with JEPY and QQQY (within a cash account) to fund other CAD based CC ETF like HYLD, SMAX, QMAX, HDIF. I'll give it a 6 months and re-evaluate.
Another great video from the master. You were thinking of Norbert's Gambit by the way 🙂
Were you thinking of Norberts Gambit when transfering over to US account?
I have CONY in my taxable account. 540 shares received today $1,940.80 - 291.11(15% tax)=$1649.69 Still a nice return...for now.
I used the returns to buy more Canadian ETFs such as HYLD, HDIF, HDIV, and USCL...
If you take CONY's close price today of $23.15 and calculate the dividend yield for the month that is 15%. If you subtract the withholding tax it's still about 13%. Your yield on cost may be different from this depending on what price you bought CONY at, but its still better than anything else. Keeping it out of a cash account or a TFSA to avoid a 2% hit when it allows you the flexibility to buy other ETFs and to withdraw without penalty if necessary isn't worth it to keep in an RRSP.
Nice. I do the same thing with JEPY & QQQY --> Funding HYLD, SMAX, QMAX, HDIF.
yes!
Interactive Brokers charges 0.1% on conversions they also pay interest (4%) on any cash in your account
where is a there a canadian holding that can we get the returns as high as what comes from YM ???? .. even with skimming 15% off the top?? .. PLEASE LIST THEM .. I have in TFSA the following - CONY, JEPI, JEPQ, and SCHD .. what is an equivalent? .. I am US born and living in Canada, so I have to file US anyway..... no matter what, so it makes sense to me to hold the high yield in TFSA, so that saves me paying canada tax
I have US stock in regular account and it will stay that way .. the irs doesn't see canadian investments the way canadians do
I ran the numbers with my accountant, US stocks that generate dividends in your cash account are taxed as foreign income and you also lose 15% off the top. Anything that pays less than 25% can be replaced by Canadian stocks like BANK or DGS which also have the benefit of being taxed at a lower rate, right now I hold CONY, NVDY and YMAX in my cash account, YMAX may get replaced soon depending on if they drop their dividend payment this month, they make more sense being on drip in an RRSP than in a cash account depending on your finacial needs
be careful, its U.S. LISTED stocks that generate F income. things like QQCL USCL etc. have only U.S. stocks but because the fund is Canadian listed, there is 0 to no foreign income. always look at the distribution breakdown on the funds website, not an "estimate from an accountant
I believe as a Canadian you would also get a foreign tax credit (of up to 15%) for those taxes withheld. Depending on your personal tax situation, this could potentially reduce / negate the US withholding tax downside from holding these high yield US listed securities.
Yes, it is shown in box 34 of the T3 slip which identifies the amount the fund paid in foreign tax. That amount usually reduces the amount of tax you owe but you do not always qualify for the full amount. In most cases you get 100% of it but it depends on some ratio between your taxable income and tax payable. Moreover, I am not sure if the amount in box 34 represents the entire 15% withholding tax.
There is no foreign tax credit generated from a TFSA
Nice video Adrian explaining where to hold these high yield U.S. listed funds! I have been just thinking about this recently. I think as long as the yield remains high, some people will be holding these funds outside of RRSP. I also think these funds are bit too new and you should do a 1 year recap video and go through the same comparisons. That would be interesting to see. 😀
I have all my qqqy cony iwmy in my TFSA. I can use the distribution anytime i want to.
Thanks this is excellent advice and saved me $$$
I wish you had referred to your amazing video with the withholding tax table. It’s an old one, but it represents so well what the tax implications are 😊. Thanks for comparing the US vs CAD fund’s total returns.
5:01 if you compare a same etf that holds us stocks, one traded at NYSE and the other traded at TSX, the MER on the canadian one will have higher MER because they are handling on the back the 15% withholding tax.
I think even with the withholding tax it’s still worth it to hold these high yield etfs in a TFSA. I myself have started investing in these in my TFSA starting with TSLY and planning on QQQY and YMAX. The reason being is I’m getting close to maxing out my TFSA contributions and once that happens I want to use the distributions from these etfs to continue to fund my investments
Well explained Adriano! I believe with so many people getting into these amazing funds it can be tempting or confusing as to what type of account is best for what CC find ❤
Great video paesan. You answered questions I didn't even know I had.
Good video, but maybe you could explain the full reason why yield is not equal to total return. For me, it means if QQQY yields 40% and TR is « only » 15%, it means I have to re-invest the rest of the distribution to balance the NAV depletion that may happen
yield is PART of the total return,
This is how i see the returns on these types of funds.Total return in this case equally the dividend minus stock price depreciation. For example a 40% yield and a -25% share price after 1 year = 15% total return. A 40% dividend doesn't equal a 40% return?
So I currently hold 1000 shares of TSLY down over $5600, what's the Canadian equivalent for TSLY? Other than YSTL which I already have lots of
Sure I would like to sell it and move it out of my cash account but I will create a capital loss. I see no point in selling it at this time. I will just wait it out and see where it goes the next 2-3 years
YTSL is the only equivalent and its outperforming TSLY i believe
Sell it and buy something going up not down
@@rickbold9337 like what do you suggest?
I disagree . Jepi and jepq, in my opinion, are high-quality etfs, so I don't mind paying 15 percent withholding tax, we all gotta pay tax anyway you look at it. Again, that's just my opinion, but I love your channel. Keep up the amazing work .
It would be great to see a more in depth video on this with more comparisons. I think it would be really helpful when trying to pick an ETF to invest in.
will be easier when they have all been out for a year
@@PassiveIncomeInvesting Looking forward to it!
QUESTION: These payouts are distributions (not dividends). How is this taxed in a regular cash/margin account in Canada. 1. Is this considered income and fully taxed at your marginal rate the same as interest is. Or 2. Is it considered a capital gain and taxed at 50% in your marginal rate.
U.S. listed funds typically give out Foreign Income
The dividends that the U.S. companies pay out in U.S. ETFs will be viewed as foreign income and taxed as interest at your marginal tax rate in Canada.
The covered call premiums that the ETFs collect will be taxed as capital gains at 50% of your marginal tax rate. But sometimes the fund manager will designate the capital gains as ROC so that you do not have to pay tax on them this year. This means that ROC will lower your ACB which will increase your capital gain when you finally sell the fund. Hence, ROC is effectively deferred capital gains.
Do you think any of the Canadian Finance companies will come out with similar high-yield funds like the defiance funds?
Hpyt harvest 15% yield . I bought even more.
Good fund!!! Just wondering if any of the Canadian companies will have 0 DTE options like the defiance funds that produce their very high yield
hope so!
Thanks for the video. Great content.
Hey Adrian! Thank you for another awesome video. Can you do video on the Canadian equivalent funds / ETFs as mentioned @4:25?
If you buy US stock or fund directly there is a 15% witholding US tax. on dividend.
If a Canadian fund (manager) buy US stock the fund also pay the 15% US tax.
Canadian funds who invest in US stock do not get a free pass they also get the dividend 15% tax witheld
The difference is you do not see it.
If we are living off the income why should we care about the total return? Why not take the higher yield net of conversions and withholding fees as income investors? The goal is replacing our work income no?
I agree, as a true income investor your focus should be on yield so that you can continue to pay for your living expenses. That said, I would still like the fund to maintain its value so that I don't have a loss if I sell it. But with a 15% yield, that may not be possible in most time periods. However, this time period is different because the markets are not at peak.
The 15% yield is not high because the payments are high but rather because the market prices of the funds are low. When the markets recover beyond where they were 2 years ago, I expect the income funds to go up with them while maintaining their current payment schedules.
yes for sure, but another point to remember is that the distributions can go down over time . video to follow
If total yield doesnt equal total return why do ppl favor total yield? From my understanding , you get more cash, but if you spend it all you just burn through your nest egg faster. Why dont ppl take less yield funds and have the ETF effectively reinvest that extra yield they don't need?
I hold all my Yieldmax and Defiance ETFs in my US Dollar TFSA so no currency conversion issues for me.
Tell me more about this option!
@davamckay Just call your broker and tell them you want a USD TFSA account. I'm with TD and it was that simple.
Cool! Thanks!!@@drewswerd
but the 15% tax on all dividends is there :(
@PassiveIncomeInvesting Don't I know it! My only point was there is a way to buy, sell and receive dividends without getting hit with currency conversions. Love your channel and appreciate all you put into it (also a subscriber). Thanks!
Thanks for the video
Excellent video. Would love to see a follow up video regarding the performance of QQQY and JEPY. Since these 2 ETFs are core positions for you, how long will you hold on to them with each month passing resulting in a lowered distribution. It has been a great ride so far...
they should be very very close over time
RRIF is as safe from IRS as RRSP, FWIW.
well, I have decided to open a RRSP and use some TFSA dividends to fund it...not sure what is going in the RRSP yet...maybe I'll take a look at your RRSP and get some ideas there.
What fund would be appropriate then to hold in a US Cash or US TFSA account? Adriano ( or anyone ) do you have any suggestions?
Does "US listed" mean "listed in USD"? Do ETFs listed in CAD with some US companies still dock you 15%? I don't get it.
listed on the American Stock Market
Yes, but the fund company gets stuck with the 15% withholding tax. You will see the amount in Box 34 of your T3 slip which will entitle you to a partial or full tax rebate of the amount, known as the Foreign Tax Credit.
What would you recommend that is american etf without yield?
I have CLM in my TFSA, the 15% withholding and Wealthsimple exchange fee eat up my income. Just waiting for CLM to go up then will swap to CC or CC + lev ETF. How do I calculate my CLM real yield if my average cost is 8.50?
Great info ! Even the pros don't know this. To busy pushing their own agenda, some for their gain not yours.
having more US cash dividends is much better than Canadian . its a stronger currency . so i disagree regarding currency fees .. i convert inside Questrade . its a decent rate too
What do you think of TSLY with a yield of 80%? Knowing that Tesla will go up in the next year/decade ?
yeah but we really don;t know that , do we?
I’m holding a portion of high yield funds in my cash and TFSA accounts. The math still works. Yields are much higher than the majority of our Canadian funds.
no issue in doing so!
Does anybody know a Canadian equivalent to schd, divo, dgrw ie., a dividend growth etf that preferably pays monthly?
Found you board earlier today, just what I was looking for. Watched several videos already. Retired income investor, what are your thoughts on ETFs like PFF, HYGH, FPEI ? Got a bunch of JEPI, QYLD, RYLD and the such
what about HXQ in the TFSA?
sure why not? Pure Growth Nasdaq100 index
I hold both HYLD and USCL in my TFSA...would it be better for me to hold only one of two ETF's as they are both invested in the S&P 500?
You bought them without understanding what you bought 😂😂.
They are Canadian Listed both you mentioned. No Taxes, inside your tfsa !
Adriano is talking about US listed ETFs. HYLD and USCL is Canadian listed etf. Hope you get it now funny boy 😂😂
Hate to disagree Adrian but this is Passive Income channel not Passive total return channel. For me its about the Income not total return
Yes it’s funny how his tune has changed. I have no issue with him changing his mind but don’t profess to know everything about investing if you’re making it up as you go along. He was very adamant about returns not mattering when I first started watching. I do appreciate his research and information on covered call etfs though and will continue to watch. No offence intended here just my 2 cents less the 15% wht 😊
that's ok, disagree away. NP
I am not clear if the 15% withholding tax is applied to the Canadian listed ETF at the management level. I think the Canadian ETF gets hit with it too. That being the case, if the total return between the U.S. listed ETF and the equivalent Canadian listed ETF is similar, it cannot be because of the withholding tax. More likely, the exchange rate or the investment strategies of the ETFs. Correct?
If the underlying security is USD, income from that underlying will get taxed (regardless of if the etf is CAD listed).
Look out for T3s coming up and check under ‘Foreign Income’ section
@@JH-py9wf Yes, I agree and you confirmed my point: the return of the Canadian ETF is not keeping up to its U.S. counterpart as a result of saving on the withholding tax; it's stuck with that. It is keeping up because it is doing a better job while having a 15% disadvantage.
Norbert’s Gambit ;) you were thinking of where you exchange Canadian dollars into USD for free. Good video, thanks for sharing, this subject needs to be brought up every now and then to remind investors and make aware to newer investors.
yes !
Example:
I would not hold QQQY in TFSA, total return of 5.94% so far, But I would hold SVOL in TFSA, 23% total return in 1 year.
this is why i did say there could be some exceptions ... funds that are simply kicking ass... like SVOL. but things can change
dont funds that hold US already have the 15% taken off by the fund manager like HYLD, so im not understanding what the difference would be with holding US listed in cash or tfsa in regards to how the 15% witholding tax works, and if there is a foreign tax credit for cash account holdings depending on how much you would get back wouldnt that offset the 15% by a large amount thanks
yes they do, this is why comparing the performance is important. is JEPQ has a 25% return and QQCC has a 25% return. QQCC is automatically superior because the performance already includes the fees and taxes, whereas the JEPQ one does NOT.
well that makes so much more sense now, thank you yet again for answering all my dumb questions, very much appreciated
if the full 15% foreign tax credit could be used then wouldnt it be equal except any conversion fees
Hi Adrian got a question: thanks for the great videos you make. I understand what your saying but if you look at the dividend per month on QQQY - JEPY etc..thats very high dividend even when you pay the withholding tax of 15%. If i look at the Canadian ones thats gives no more than say $00.20 till around $00.25 cent. (QQCL or USCL etc) if dividend is most important are you still say no US in TFSA.....or see i things over....
yes but they are not consistent and likely to drop over time. another consideration. video out soon on that explaining my view
is it still a good idea to hold what i have and invest the dividend right now in the Canadian one... or better to sell right away since I'm not yet in a big loss and with the dividend i already got......@@PassiveIncomeInvesting
WRONG. THE CANADIAN Fund is still paying that 15% withholding tax...you just don't see it. But in the background the US government is still stripping off 15% of that generated income.
yes i know that.... i did say "its included in the fund"
Thanx guys you just answered my question.
As I believe others have mentioned, it would have been nice if this video also showed the math either proving or disproving holding High Yield US Listed funds in a TFSA.
hard to do... but the performance of the Canadian ETFs includes the 15% tax (as they are managed internal to the fund) and the U.S. ones do not include it. So the way i look at it, its probably approx. 15% less performance
I've got a lot of US dollars in a non-registered account. I'm considering investing in canadian listed covered call ETF's that invest in us dollar stocks (not us listed ETF's) to generate US dollars income and to spend using a US dollar credit card. I believe the only tax implications is only the withholding taxes paid by the canadian listed etf of which I will receive a T3 or T5. Withholding taxes paid by the canadian etf would be on any dividends received and the income generated by the covered calls. Question: Is the income from covered calls still treated as a capital gains by canada gov. or regular income by US gov. for the owner of the canadian listed etf??
Buy QQQ or SPY instead
First 😊
For JEPY and QQQY where the distributions are almost 100% return of capital, you’d have to be an absolute idiot to hold it in a non-retirement account. You’d be making cash donations to the IRS every month😂
Remember lads:
QQQ in Cash account
TQQQ in TFSA account
JEPQ in RRSP account
I have USA$s that I cant put into my USA$ RRSP account I don't want it sitting around paying me nothing I don't want to convert it to CDN$s so I put it into HYLD.U in a non-reg account to make USA$s . What else can I put my USA$s into that has a good return for my non-reg account to make USA$s !
HYLD.u is a good option. You also have USCC.u . and some other Canadian listed CC ETFs have .U versions