ETFs and index funds - Stocktrades Canada

I’m assuming that when you encourage us to purchase ETFs and bonds, etc. to round out our portfolios, there is the reasonable expectation that we may go outside of the Canadian realm. I have been looking at US index funds such as Nasdaq and S & P tracking funds and ANGL bond fund. Do these sound reasonable or should I consider international funds instead?

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Asked on August 27, 2020 8:23 pm

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Private answer

Hi there,

I am a firm believer that a good part of diversification is to expand beyond the borders of your own country. As Canadians, this means having exposure to U.S. and International investments. I can't speak specifically to the funds you are referring too, but there is nothing wrong with looking at an ETF that tracks the US markets, ore an ETF that tracks a basket of international markets. You can even target certain international markets if you so choose.

The only thing to watch for here is witholding taxes on distributions/dividends. They are taxed differently depending on the country but each ETF website should have the specifics around the tax implications. This should guide you as to where best to hold the ETF (non-registered, TFSA or RRSP).

Mat

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Posted by Mathieu Litalien

Answered on August 28, 2020 5:25 am

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