I want to buy some US equity and international equity into my RSP portfolio. I have an RSP account with TD Waterhouse.
I am considering 2 options:
1. Buying U.S. listed ETFs (eg VXUS, VOO, VTI listed on NYSE)
2. Buying Canadian listed ETFs or mutual funds that hold US stocks directly (eg TD E-Series, XWD, ZSP)
Option 1
•Pro - I understand it is more advantageous to hold a U.S. listed ETF in an RSP account when trying to avoid withholding taxes on distributions because they are exempt from this tax.
•Pro - the MERs are lower
•Con - I will be charged 1.5% foreign exchange conversion fees by TD Waterhouse for every transaction including the distributions and DRIP program.
Option 2
•Con - Must pay withholding taxes because they are paid by the fund
•Pro - Will not be charged F/X conversion fees
•Con - Pay higher MERs
Has anyone crunched the numbers to figure out which option is better in the long run?
I am considering 2 options:
1. Buying U.S. listed ETFs (eg VXUS, VOO, VTI listed on NYSE)
2. Buying Canadian listed ETFs or mutual funds that hold US stocks directly (eg TD E-Series, XWD, ZSP)
Option 1
•Pro - I understand it is more advantageous to hold a U.S. listed ETF in an RSP account when trying to avoid withholding taxes on distributions because they are exempt from this tax.
•Pro - the MERs are lower
•Con - I will be charged 1.5% foreign exchange conversion fees by TD Waterhouse for every transaction including the distributions and DRIP program.
Option 2
•Con - Must pay withholding taxes because they are paid by the fund
•Pro - Will not be charged F/X conversion fees
•Con - Pay higher MERs
Has anyone crunched the numbers to figure out which option is better in the long run?