@@StocktradesLtd Oh okay, i misunderstood that, thanks. I also heard HYLD is Total Return beating the S&P (surprisingly because it uses covered calls).
Thanks Dan, appreciate the video. On another note, a bitter sweet decision with Park Lawn. A decent premium but it was something I was happy to hold while the environment improved.
Great analysis thank you. Would love to have your take on which is more profitable (for a long term investor) between an American stock (purchased in US currency) vs a CDR of the same stock.
American stock would avoid the hedging fees. Depends on currency fluctuations and when you exactly sell but if your holding period is long term US stock will likely outperform CDR
Been a sunny week in Alberta, eh? Great video as always, thanks a lot. Any chance we can get a review of VUN, whether it's worth holding compared to just the S&P 500?
Hopefully a lot sunnier in a couple weeks when the Oil lift the cup! Historically S&P has outperformed VUN just because VUN is total market. You will need small and mid cap recovery to realize stronger returns from VUN
Great video. Thanks. What would you recommend in a Canadian corporation? I'm torn between VFV and HXS. I like the simplicity and familiarity of VFV but having distributions converted to cap gains with HXS simplifies my accounting. I'm not too worried about counterparty risk with it being backed by National Bank of Canada. Now with the 65% inclusion rate for all passive income in corp I wonder if HXS is still beneficial.
agreed. thanks dan. honestly, before Stocktrades, i too believed this myth - i have no idea where this myth came from that you don't pay withholding tax on US ETFs inside an RRSP? i also now own HXQ. i used to convert everything and hold VOO and the Qs, BUT, a single unit is so large and while i know it shouldnt matter but it kinda does when i want to do monthly buys into S&P/NASDAQ100 (also a factor to consider)
You don't pay withholding tax on US domiciled funds in an RRSP. If you own VFV (Cad domiciled fund holding US ETF) because the FUND owns the US ETF and not you, you pay withholding. If you own VOO (you own the US domiciled fund directly) no withholding tax in RRSP
In the end, I'm not horribly concerned on what ETF is the best performing. Sure one could be doing better than the other right now and I may be leaving money on the table, but there is no guarantee the one that is doing the best right now will be the best option 20-30 years from now. My biggest concern is whether or not I believe in underlying companies. Point is, if you think companies like Microsoft, Apple, etc will still be massively profitable when you're set to retire, you'll be find investing your money into anyone of these ETFs.
so, it looks like the US federal reserve and the Bank of Canada are going to go their separate ways regarding interest rates - looks like the Fed will hold the line and the BoC is going to cut rates. I expect the Canadian dollar to take a tumble vs the US greenback, does that make the unhedged ETFs that hold US $$ a better buy?
Out of the 4, I view VSP as the one with the currency risks. Hear me out. Currencies are just units of measurement. They don't change the underlying value of the investment. That's why dual listed stocks in NYSE and TSX have identical valuations when converting the currencies in either directions. For example, Royal Bank is a dual listed stock. The value of NYSE:RY is always the identical to TSX:RY after conversion. There's no currency risk for Canadians to hold NYSE:RY. There is currency risk, however, if someone introduces CAD-hedging to NYSE:RY. That's what VSP is effectively doing.
They certainly do change the underlying value of the investment. Dual listed stocks always identical after conversion but conversion changes. For example if you buy a $100 USD stock at a hypothetical par dollar value for $100 CAD and the CAD drops 10%, assuming no stock movement for simplicity you've gained $10. You could sell your USD and get $110 back. On the flip side of the dollar gains 10% you'd lose. You could sell your USD and only get $90 CAD back
@@StocktradesLtd In your example, you get 10% more slices because each slice is worth 10% less, but the overall pie remains the same. If CAD drops, its value is devalued. Each CAD dollar has less purchasing power. The extra CAD$ helps retain the intrinsic value of the holding. Dual listed stocks are a proof of that. If NYSE:RY and TSX:RY are held for decades, they'll end up with identical valuations no matter where the forex goes. There's no currency risks when holding the NYSE version of RY.
@@bentobox7788 If you convert $100 CAD to $100 USD at par value and buy a USD holding and the value of the Canadian dollar rises by 20%, on a constance currency basis, assuming you sell that USD holding and convert back to CAD, you will get $80, resulting in a net loss on a constant currency basis of 20%. There is FX risk, primarily in the situation of someone who utilizes the particular currency. If you need your cash flows in CAD, you have less CAD in this situation. This is exactly why the longer the time horizon the less need for someone to hedge. There is absolutely currency risk in holding the NYSE listed version for someone who needs cash flows in CAD.
@@StocktradesLtd With the world being more connected than ever, no one is truly insolated to one-currency, but that's a bigger discussion. In your example, a net loss on constant currency isn't as relevant as a net loss on intrinsic value. At I said at the beginning, currency is just a unit of measurement. The same holding can be measured in hundreds of currencies including Zimbabwean. The intrinsic value of the holding does not depend on currency fluctuations. If the value of CAD rises by 20%, of course the holding must be repriced to $80 when measured in the CAD$ unit. The unit changes, but it still does not change the intrinsic value of the holding. To clarify my earlier example, even if CAD appreciates (or depreciates) over the long-term, there's still no currency risk between holding NYSE:RY and TSX:RY. They move in lock step in both short and long-term. The liquidation value of NYSE:RY is always the same as TSX:RY no matter when.
Yeah I'm not sure what to tell you. Liquidation value is not the same, this does not isolate you from currency risk. If you are a retiree that primarily lives in Canada and utilizes the CAD, there is currency risk in holding the US dollar. This is why people hedge. If you turn $100 CAD into $100 USD at par value, the CAD rises 20% and you want to buy an item in CAD for $100.... You only have $80.
HXS' 0.30% trading expense ratio (TER) is higher than its 0.11% management expense ratio (MER). Usually MER includes TER. Do you any insights as to why?
Nice video but I would suggest being more concise/talking faster. Had to put this in 1.5x speed and was still slow, and i felt like you could have said things in much less time. You also repeated lots of information.
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ZSP not in the title?
ZSP is pretty much identical to VFV. It'll have the same pros/cons.
@@StocktradesLtd ZSP actually owns the stocks though. VFV holds VOO so double Management Expense Fee.
There is no double fee. ZSP charges 0.09%. VFV charges 0.09%. VFV makes its added expense ratio by upcharging the 0.03% charged by VOO.
@@StocktradesLtd Oh okay, i misunderstood that, thanks. I also heard HYLD is Total Return beating the S&P (surprisingly because it uses covered calls).
Another great video Dan! Would it be better to own HSX in RRSP account, rather than VFV or VOO?
Thanks for the content and your time delivering it !
My pleasure!
This is so helpful. Thank you!
@@nana3chan no problem!
You should mention what are the pos and cons in a TFSA account. Thanks Nice apresentation.
Great video as usual
Thank you!
Thanks Dan, appreciate the video. On another note, a bitter sweet decision with Park Lawn. A decent premium but it was something I was happy to hold while the environment improved.
Listen to the TCI podcast on Thursday. I drop my thoughts!
@@StocktradesLtd sweet, looking forward to it! ps. gotta be happy with your Oilers.
VFV has been a great performer in my portfolio. I also really like HTAE which has also been performing well.
Thanks for your great video!
No problem!
ZSP fully Canadian based etf by BMO seems a best choice?
Pretty much identical fund to VFV. Will have same issues as VFV as I mentioned in the video.
Great analysis thank you. Would love to have your take on which is more profitable (for a long term investor) between an American stock (purchased in US currency) vs a CDR of the same stock.
American stock would avoid the hedging fees. Depends on currency fluctuations and when you exactly sell but if your holding period is long term US stock will likely outperform CDR
Hey Dan - what are your thoughts on XUU? I see it’s included a couple of your “model portfolios”. Great video as always btw! #OilNation
Total market fund! Holds.much more than just the S&P
Been a sunny week in Alberta, eh? Great video as always, thanks a lot.
Any chance we can get a review of VUN, whether it's worth holding compared to just the S&P 500?
Hopefully a lot sunnier in a couple weeks when the Oil lift the cup! Historically S&P has outperformed VUN just because VUN is total market. You will need small and mid cap recovery to realize stronger returns from VUN
One thing I find interesting is that out of all four choices, VFV has the highest returns.
This mostly has to do with currency differentials. On a constant currency basis, it has underperformed VOO
Great video. Thanks. What would you recommend in a Canadian corporation? I'm torn between VFV and HXS. I like the simplicity and familiarity of VFV but having distributions converted to cap gains with HXS simplifies my accounting. I'm not too worried about counterparty risk with it being backed by National Bank of Canada. Now with the 65% inclusion rate for all passive income in corp I wonder if HXS is still beneficial.
Hard for me to give individualized guidance unfortunately!
What do you think of ZSP...
Pretty much on par with VFV. I believe they lowered fees to be competitive.
I’m so confused can I not just buy SPY why would I need to invest via a different etf i don’t mind holding in usd
@@Thegringopapi SPY is triple the fees as VOO
@@StocktradesLtd ok wow thank you so much I was really struggling to understand why not just buy spy
agreed. thanks dan. honestly, before Stocktrades, i too believed this myth - i have no idea where this myth came from that you don't pay withholding tax on US ETFs inside an RRSP? i also now own HXQ. i used to convert everything and hold VOO and the Qs, BUT, a single unit is so large and while i know it shouldnt matter but it kinda does when i want to do monthly buys into S&P/NASDAQ100 (also a factor to consider)
You don't pay withholding tax on US domiciled funds in an RRSP. If you own VFV (Cad domiciled fund holding US ETF) because the FUND owns the US ETF and not you, you pay withholding. If you own VOO (you own the US domiciled fund directly) no withholding tax in RRSP
@@StocktradesLtd Another great video Dan!
So, In this case would it be better to own HSX in RRSP account, rather than VFV or VOO?
Great video! Could you comment on VUN?
In the end, I'm not horribly concerned on what ETF is the best performing. Sure one could be doing better than the other right now and I may be leaving money on the table, but there is no guarantee the one that is doing the best right now will be the best option 20-30 years from now. My biggest concern is whether or not I believe in underlying companies. Point is, if you think companies like Microsoft, Apple, etc will still be massively profitable when you're set to retire, you'll be find investing your money into anyone of these ETFs.
Fair!
so, it looks like the US federal reserve and the Bank of Canada are going to go their separate ways regarding interest rates - looks like the Fed will hold the line and the BoC is going to cut rates. I expect the Canadian dollar to take a tumble vs the US greenback, does that make the unhedged ETFs that hold US $$ a better buy?
Lower CAD relative to USD would ultimately have you benefitting from owning USD yes.
Have you considered the impact of the swap fees with HXS in comparison with the others you’ve mentioned?
Yep
So why not put HXS in a TFSA? Wouldn't you avoid the capital gains?
You could yeah.
what about ZSP?
Out of the 4, I view VSP as the one with the currency risks. Hear me out.
Currencies are just units of measurement. They don't change the underlying value of the investment. That's why dual listed stocks in NYSE and TSX have identical valuations when converting the currencies in either directions. For example, Royal Bank is a dual listed stock. The value of NYSE:RY is always the identical to TSX:RY after conversion. There's no currency risk for Canadians to hold NYSE:RY. There is currency risk, however, if someone introduces CAD-hedging to NYSE:RY. That's what VSP is effectively doing.
They certainly do change the underlying value of the investment. Dual listed stocks always identical after conversion but conversion changes.
For example if you buy a $100 USD stock at a hypothetical par dollar value for $100 CAD and the CAD drops 10%, assuming no stock movement for simplicity you've gained $10. You could sell your USD and get $110 back. On the flip side of the dollar gains 10% you'd lose. You could sell your USD and only get $90 CAD back
@@StocktradesLtd In your example, you get 10% more slices because each slice is worth 10% less, but the overall pie remains the same. If CAD drops, its value is devalued. Each CAD dollar has less purchasing power. The extra CAD$ helps retain the intrinsic value of the holding.
Dual listed stocks are a proof of that. If NYSE:RY and TSX:RY are held for decades, they'll end up with identical valuations no matter where the forex goes. There's no currency risks when holding the NYSE version of RY.
@@bentobox7788 If you convert $100 CAD to $100 USD at par value and buy a USD holding and the value of the Canadian dollar rises by 20%, on a constance currency basis, assuming you sell that USD holding and convert back to CAD, you will get $80, resulting in a net loss on a constant currency basis of 20%.
There is FX risk, primarily in the situation of someone who utilizes the particular currency. If you need your cash flows in CAD, you have less CAD in this situation.
This is exactly why the longer the time horizon the less need for someone to hedge. There is absolutely currency risk in holding the NYSE listed version for someone who needs cash flows in CAD.
@@StocktradesLtd With the world being more connected than ever, no one is truly insolated to one-currency, but that's a bigger discussion. In your example, a net loss on constant currency isn't as relevant as a net loss on intrinsic value. At I said at the beginning, currency is just a unit of measurement. The same holding can be measured in hundreds of currencies including Zimbabwean. The intrinsic value of the holding does not depend on currency fluctuations. If the value of CAD rises by 20%, of course the holding must be repriced to $80 when measured in the CAD$ unit. The unit changes, but it still does not change the intrinsic value of the holding.
To clarify my earlier example, even if CAD appreciates (or depreciates) over the long-term, there's still no currency risk between holding NYSE:RY and TSX:RY. They move in lock step in both short and long-term. The liquidation value of NYSE:RY is always the same as TSX:RY no matter when.
Yeah I'm not sure what to tell you. Liquidation value is not the same, this does not isolate you from currency risk. If you are a retiree that primarily lives in Canada and utilizes the CAD, there is currency risk in holding the US dollar. This is why people hedge.
If you turn $100 CAD into $100 USD at par value, the CAD rises 20% and you want to buy an item in CAD for $100.... You only have $80.
Thoughts on HULC etf for non-registered CAD account?
An interesting fund for sure!
what do you think about USSX by Global X, it's fairly new ETF?
Will have a peek
HXS' 0.30% trading expense ratio (TER) is higher than its 0.11% management expense ratio (MER). Usually MER includes TER. Do you any insights as to why?
MER doesn't include the trading expense ratio
@@StocktradesLtd Thanks. HXS's gross expense is probably closer to 0.4% then.
Will you be taxed in a tfsa too for holding vfv
Yes. Withholding tax on a portion of the distribution
would you do VOO in RRSP or HXS in registered accounts
Depends. Both will be tax-sheltered so it really depends on what you want your currency to be in.
@@StocktradesLtd How about TFSA - which one is best ?
What do you recommend in a tfsa
For these ETFs?
Yes I currently have vfv in a tfsa with a 15 plus time horizon
D ang all of these are
F or sure better than…
N evermind
😂
I own VFV because i do not see the day that Hockey players will request to be paid in canadian dollars.
Nice video but I would suggest being more concise/talking faster. Had to put this in 1.5x speed and was still slow, and i felt like you could have said things in much less time. You also repeated lots of information.
Thanks for the tip!
Sounds like yewr 2 smart for this channel Partner !
-dumber person who enjoys Dan’s cadence and intonation
Also, I kid.
Should say that outright.
Dan is great for listening to viewers’ suggestions.
To be honest thought I was a fast talker. Lol. I haven't watched a TH-cam video at under 1.5x speed in years either.
@@StocktradesLtdHaters Gon hate Danny!...lol