Canadian Capitalist

Purpose of Portfolio
The purpose of the portfolio is to provide steady growth of capital until retirement and an inflation-adjusted, after-tax income of $50,000 every year in retirement.
Return Expectations
We expect pre-tax, inflation-adjusted returns of 1% from cash, 2% from bonds and 4% from stocks and REITs. We expect a dividend yield of 2% from stocks [...]

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Exchange-Traded Funds (ETFs) are great products for investors only if: (1) they have rock-bottom fees, which means that investors keep what they don’t pay and (2) they have low turnover, which allows investors to create portfolios that are highly tax efficient. While they can nominally be called “ETF-based”, two new products fail to sport either [...]

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Many thanks to Charles for the note Credential Direct (read review here) is now washing rates when U.S. Dollar denominated securities are bought and sold in RRSP accounts on the same day. Charles quotes from their April 2008 newsletter:

FX FLAT TRADES (Washing Rates)
Pay less for US trades. Now when you execute a US$ buy/sell transaction [...]

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The recovery in the equity markets is reflected in the Sleepy Mini Portfolio, which swung from a 7.5% loss at the time of the last update to a gain of 1.1% at the end of May. The current portfolio holdings are:
TDB909 - Canadian Bonds - $570.05 (18.8%)
TDB900 - Canadian Equities - $621.73 (20.5%)
TDB902 - US [...]

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The following question is from Ed, who wants to switch from index mutual funds to ETFs:
Many years ago I set up my RRSP using TD’s low MER e-Series index mutual funds. I learned quite awhile ago that most actively managed funds cannot beat the indexes over the long haul. I’m now thinking of [...]

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GK sent me an e-mail noting that E*Trade has joined TD Waterhouse and Qtrade in offering some form of “wash trade” capability when buying and selling US dollar stocks in a RRSP. A slightly edited version of GK’s note is posted below with permission:
I followed your post about Questrade allowing customers to hold US Dollar [...]

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The following query is from JU (slightly edited):
I presently have all my investments in mutual funds (locked-in and regular RRSP) and would like to switch to ETFs. I don’t believe there are any DSCs or fees payable if I sell these funds. My question is this: What is your strategy for ETFs as far as [...]

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Many readers are interested in learning more about the possibility of capturing exposure to most world markets in one fund through the Vanguard FTSE All-World Ex-US ETF, which trades on the AMEX under the ticker symbol VEU. The Vanguard website says that the FTSE All-World Ex-US Index tracks the performance of approximately 2,200 stocks in [...]

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The following question is from AJ:
I am wondering about an online article titled ETF Sector: Slop du jour published in the summer 2007 issue of Canadian Business magazine. The relevant section says: ‘The other building block advisers typically recommend is an emerging markets ETF. John De Goey, a senior adviser at Toronto-based Burgeonvest Securities, cautions [...]

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If you invest in US-listed stocks or foreign stocks that trade on U.S. exchanges as American Depository Receipts (ADRs), you need to be aware of some tax implications:

If you hold American stocks in your investment account, you will be subject to a 15% withholding tax on dividends (for Canadian residents; Check with your broker that [...]

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