Author Topic: Help me with my ETF's VE, XEF, XUU  (Read 3182 times)

themashedup1

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Help me with my ETF's VE, XEF, XUU
« on: March 31, 2017, 10:41:46 AM »
I have started to look into the holdings of my portfolio and a few things have popped into my mind.

1)I seem to have doubled up on my exposures here, I have both VE (VANGUARD FTSE DEV EUROPE ALL CAP IDX) and XEF(iShares Core MSCI EAFE IMI Index ETF), the only difference seems to be exposure to Japan and Australia. The mer's seem to be the same, so, what one should I keep?

2)XUU only holds share of other ETFs, is this not just doubling up my fees for the MER? would it be better just to one of the holdings itself? or just go straight to VUN? I originally picked the XUU (ISHARES CORE SP US TOTAL MARKET ETF) because of the price differential, but if it is costing me over again, may as well switch.


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The holdings of ISHARES CORE SP US TOTAL MARKET ETF, XUU.
iShares Core S&P 500 ETF XSP, MER: 0.11%
iShares Core S&P Total U.S. Stock Market ETF, ITOT, MER: 0.03%
iShares Core S&P Small-Cap ETF, IJR, 0.07%
iShares Core S&P Mid-Cap ETF , IJH, MER:0.07%

« Last Edit: March 31, 2017, 11:10:22 AM by themashedup1 »

MustacheAndaHalf

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #1 on: March 31, 2017, 10:55:31 AM »
Listing raw ETF tickers of ETFs isn't very clear.  Better would be listing the fund/ETF name, ticker, and expense ratio.

I don't understand why you listed several U.S. iShares ETFs (since your questions are about international ETFs) at the end of your post with their current price/share.

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #2 on: March 31, 2017, 11:11:28 AM »
Listing raw ETF tickers of ETFs isn't very clear.  Better would be listing the fund/ETF name, ticker, and expense ratio.

I don't understand why you listed several U.S. iShares ETFs (since your questions are about international ETFs) at the end of your post with their current price/share.

Sorry about that, Just updated the information.

GreatLaker

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #3 on: March 31, 2017, 11:23:55 AM »
1) VE only holds stocks of developed countries in Europe. XEF holds stocks of all developed countries outside of Canada and USA (known as EAFE: Europe, Australasia and Far East). So you have double exposure to European equities. To get developed EAFE exposure from Vanguard you would have to either add VA, or sell VE and buy VIU (VIU is vanguard's most comparable fund to XEF). Your simplest alternative is to sell VE and buy more XEF, unless you have some reason you want to overweight Europe.

2) There is no doubling up of MERs in XUU. iShares charges MER of 0.10 period, and absorbs or zeros out the MERs of XUU's holdings. It's like buying a combo at McDonalds: you pay one price for the combo, not the combo price plus the individual prices for all the items in the combo. The reason XUU holds other ETFs is it is more efficient and cost effective than buying thousands of individual USA stocks.

You really should decide what you want in your portfolio and research funds before you buy... it's all readily available on fund websites.

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #4 on: March 31, 2017, 11:33:48 AM »
You really should decide what you want in your portfolio and research funds before you buy... it's all readily available on fund websites.

Thanks for the reply. You are correct with your last sentence, I really just started mashing things together from two slightly differing guide for investments. It is mildly stupid, but so far I haven't caused any major damage. I am slowly sorting out now what I want/need in the portfolio and working to develop a set of rules to guide my future investing.



GreatLaker

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #5 on: March 31, 2017, 11:47:55 AM »
No sweat.

Finiki.org (the Canadian Financial Wiki) is a great resource for Canadian investors.

You could start by developing your Investment Policy Statement http://www.finiki.org/wiki/Investment_policy_statement

Then look at the portfolio design section http://www.finiki.org/wiki/Portfolio_design_and_construction and simple index portfolios http://www.finiki.org/wiki/Simple_index_portfolios

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #6 on: March 31, 2017, 12:15:59 PM »
Thanks, that is great information!

Have a good one.

Heckler

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #7 on: April 01, 2017, 08:41:34 AM »
Learn about foriegn withholding taxes.  Id give you the answer, but you need to learn yourself. Of the two, there is a better choice which will save you money.

http://canadiancouchpotato.com/2016/07/11/foreign-withholding-taxes-revisited/

Let us know the outcome, and why please!


Heckler

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #8 on: April 01, 2017, 08:46:11 AM »
.

I don't understand why you listed several U.S. iShares ETFs (since your questions are about international ETFs) at the end of your post with their current price/share.

It helps to know these are Canadian ETFs, sold on the TSX.

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #9 on: April 01, 2017, 09:45:25 PM »
Learn about foriegn withholding taxes.  Id give you the answer, but you need to learn yourself. Of the two, there is a better choice which will save you money.

http://canadiancouchpotato.com/2016/07/11/foreign-withholding-taxes-revisited/

Let us know the outcome, and why please!

I am going to look into this, thanks.
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With my question I was originally worried about the MERs being stacked on the XUU, apparently Ishares doesn't do this (from GreatLaker). What I had not considered is the tax implications, as you pointed out. I had just assumed that holding the ETF in my RRSP made the withholding tax null. In the article you posted they pointed out that even in the RRSP the withholding tax would be applied before the tax benefits are applied to me.

So for this example it is better to own the VUN that holds the shares directly rather than XUU, just not so much for the reasons I speculated. (A little oddity, morning star doesn't list the holdings of VUN, just that it is 100% vanguard total stock.)

Thanks for the link, good reading! (If i am wrong you will soon find this entry hastily deleted :P.)
« Last Edit: April 01, 2017, 10:46:48 PM by themashedup1 »

Heckler

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #10 on: April 02, 2017, 01:20:55 AM »
VUN.TO holds VTI.NY. 

Buy VTI in $US and save even more with less tax!

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #11 on: April 02, 2017, 09:32:40 AM »
VUN.TO holds VTI.NY. 

Buy VTI in $US and save even more with less tax!

Thanks, they only list that as a side note on their fact sheet.
« Last Edit: April 02, 2017, 09:34:39 AM by themashedup1 »

MustacheAndaHalf

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #12 on: April 02, 2017, 09:59:43 AM »
You really should decide what you want in your portfolio and research funds before you buy... it's all readily available on fund websites.
A counterpoint: some people hold 100% cash while they take months to decide.  Buying the "wrong" set of no-load ETFs/funds is actually better than sitting in cash.

themashedup1

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #13 on: April 02, 2017, 10:29:00 AM »
You really should decide what you want in your portfolio and research funds before you buy... it's all readily available on fund websites.
A counterpoint: some people hold 100% cash while they take months to decide.  Buying the "wrong" set of no-load ETFs/funds is actually better than sitting in cash.

My portfolio is so small that at this point it is of little weight compared to my NW, and work prension.  I have little qualms about making mistakes like this.

BuildingFrugalHabits

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Re: Help me with my ETF's VE, XEF, XUU
« Reply #14 on: April 07, 2017, 06:52:44 AM »
Question. Are US retirement accounts such as 401k, 403b and Roth IRA subject to the FIF?  If one has no intention of touching these until age 59 and FIREs in NZ at 40 are taxes due each year from age 40 to 59 or only due once withdrawl begins?