Author Topic: Canadian ETF Recommendations for Questrade  (Read 701 times)

The Investing Hispster

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Canadian ETF Recommendations for Questrade
« on: June 28, 2018, 07:18:13 PM »
Hi folks,

I just finished having my investments transferred from a RoboAdvisor (Wealthsimple) into Questrade, I am looking for any recommendations into ETFs for Canadians. I am inclined so far to go with one of the Canadian Couch Potato Model Portfolios for my RRSP ($8,000) and go with VGRO for my TFSA ($5,000). Would love any recommendations for feedback on any ETFS so any helpful info for fellow Questraders out there. Any feedback is appreciated. Cheers

Retire-Canada

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Re: Canadian ETF Recommendations for Questrade
« Reply #1 on: June 28, 2018, 11:05:51 PM »
I invest in the following ETFs at QT:

- VUN + VTI [US Total Stock Market] ~50%
- VCN [CDN Stock Market] ~20%
- VIU [International Developed] ~15%
- VEE [Emerging Markets] ~15%

Two things to look for in ETFs are:

1.low MERs
2. withholding tax drag

The first point is obvious. The second gets overlooked. The cost of holding VUN vs. VTI in a RRSP is 0.5%. That's a lot of money over the many decades you'll be retired. If you buy an international ETF that wraps up other international ETFs it's easy to get dinged with double withholding taxes which can be a serious drag on your dividends. So look for alternatives like VIU that hold the underlying stocks directly.

https://canadiancouchpotato.com/2016/07/18/how-foreign-withholding-taxes-affect-returns/
https://canadiancouchpotato.com/2016/07/11/foreign-withholding-taxes-revisited/
https://canadiancouchpotato.com/2014/02/20/the-true-cost-of-foreign-withholding-taxes/

It's easy to end up paying thousands extra taxes a year and losing out on hundreds of thousands in returns over your investing career if you are not careful with tax optimization.
« Last Edit: June 29, 2018, 07:57:54 AM by Retire-Canada »

daverobev

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Re: Canadian ETF Recommendations for Questrade
« Reply #2 on: June 29, 2018, 11:00:47 AM »
For pure simplicity VGRO or VBAL are amazing. My only issues are the high percentage of Canada in both, and the fact they have foreign bonds.

It is basically a game of pick the cheapest, if you're going to pick. ZEA, XEF, or VIU? Doesn't matter much.

I tend to avoid wrapper ETFs - ie, ones that just hold a US ETF. For example, XEC just holds IEMG. Unregistered it doesn't matter too much, but as Retire-Canada mentions, there can be withholding - the IRS will keep 15%, while owning the underlying stocks directly in the ETF you may not lose as much.

In an RRSP of any size, holding US domiciled stuff makes sense. For $8k? Eh, well, the cost of exchanging CAD to USD is $5 with questrade (buy DLR.TO - free; journal to DLR.U.TO - free; sell DLR.U.TO - $5). If you're saving 0.3% by holding US stuff, that'll be $24 after one year, so yeah, do it.

The Investing Hispster

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Re: Canadian ETF Recommendations for Questrade
« Reply #3 on: June 30, 2018, 09:27:17 AM »
Do you guys use DRIP through Questrade?

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Retire-Canada

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Re: Canadian ETF Recommendations for Questrade
« Reply #4 on: June 30, 2018, 09:53:13 AM »
Do you guys use DRIP through Questrade?

No I want to control where my dividends go so I can use them to rebalance my AA. With ETFs you have to buy whole shares anyways and QT doesn't charge for ETF buys so there is no advantage to DRIP in this case.

The Investing Hispster

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Re: Canadian ETF Recommendations for Questrade
« Reply #5 on: June 30, 2018, 10:11:53 AM »
So do you just set reminders for when quarterly dividend come out and then rebalance accordingly?

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Retire-Canada

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Re: Canadian ETF Recommendations for Questrade
« Reply #6 on: June 30, 2018, 10:57:18 AM »
So do you just set reminders for when quarterly dividend come out and then rebalance accordingly?

Well it's not like it's hard to remember I get a bunch of $$ every quarter so I don't need to set a reminder. In fact the week before they are due I start checking my account to see if they come in a day or two early. "Free" money is exciting!  But even if you forgot for a whole month it would make next to no difference in your investment results over a couple decades with a high savings rate. Getting your money to work ASAP is nice, but having ~0.4% of your portfolio sitting in cash for a moment isn't going to be an issue.

Once I see the $$ have been deposited I calculate my AA drift and buy whatever is the furthest off my target AA. I also rebalance with my monthly savings additions so [generally] my portfolio isn't too far off my target AA.
« Last Edit: June 30, 2018, 11:03:33 AM by Retire-Canada »

daverobev

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Re: Canadian ETF Recommendations for Questrade
« Reply #7 on: June 30, 2018, 01:38:14 PM »
I used to have DRIP going but it isn't great, say you have $98 come in and each share is $100, you get no shares. Might as well do it manually.

And no... I also check my accounts frequently.

If you are super hands off, you can do TD eSeries. They are mutual funds so they auto-reinvest and can hold fractional units. Can also auto-invest - money comes out of your chequing account and gets invested.

Lews Therin

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Re: Canadian ETF Recommendations for Questrade
« Reply #8 on: July 03, 2018, 06:41:07 AM »
I have XAW and VCN.

There are better options than XAW for tax withholding, but it checks my simple box.