[This post was updated in February 2015 to reflect recent changes at some brokerages.]
Norbert’s gambit remains the least expensive way to convert Canadian and US dollars at a discount brokerage. For investors looking to buy US-listed ETFs, learning this technique can save hundreds of dollars by sidestepping the wide currency spreads charged by brokerages.
With the 2013 launch of excellent unhedged foreign equity ETFs from Vanguard and iShares, there’s less of an incentive to use US-listed ETFs than there used to be. In fact, in a non-registered account or a TFSA it may not even be worth the added cost and inconvenience if the only difference is a few basis points of MER. But in an RRSP, there’s a significant benefit: using US-listed ETFs can dramatically reduce the impact of foreign withholding taxes, which can add an additional cost of 0.30% to 0.70% to US and international equity holdings.
The problem with learning to pulling off Norbert’s gambit, however, is that there’s no simple set of instructions that works at every brokerage. RBC Direct Investing and BMO InvestorLine both allow you to hold US dollars in registered accounts, but only RBC allows you to do Norbert’s gambit online: at BMO you need to pick up the phone. Scotia iTRADE doesn’t even allow Norbert’s gambit in an RRSP: instead, they offer a unique service that eliminates the retail spread on currency exchange for a flat fee.
As part of our DIY Investor Service, we helped clients do Norbert’s gambit at all of the big-bank brokerages. And for the last few months, Justin Bender and I have pulled that experience together and created a series of five white papers—one for each brokerage—with step-by-step instructions you can follow on your own. Each of the papers includes screenshots and detailed descriptions of each part of the process, all specific to each brokerage’s unique quirks:
Norbert’s Gambit: A better way to buy US dollars in an RBC Direct Investing RRSP
Norbert’s Gambit: A better way to buy US dollars in a BMO InvestorLine RRSP
Norbert’s Gambit: A better way to buy US dollars in a TD Direct Investing RRSP [Update: As of late 2014, TD Direct Investing allows investors to hold USD in registered accounts, which makes “automatic wash trades” no longer necessary. A TD representative discusses the new process here.]
Norbert’s Gambit: A better way to buy US dollars in a CIBC Investor’s Edge RRSP [Update: CIBC apparently now converts currency very close to the spot rate in RRSP accounts. However, they have not been forthcoming with the details: we recommend calling the brokerage before making a USD trade in your account.]
Norbert’s Gambit and US-Friendly RRSPs: A better way to buy US dollars at Scotia iTRADE
We’ve worked hard to make sure these papers are accurate and up to date, but we welcome your feedback. If you have had different experiences at any of the bank brokerages, please let us know and we’ll keep these resources up to date.
CCP thanks again for these guides and for the follow-up replies. I executed the gambit for the first time today at TD Direct Investing and I think I pulled it off properly by following the guide to the letter. I calculated my exchange rate at 0.16% more than spot rate – compared to 1.43% by using TD’s online rates and 0.6% by calling in to get a better rate. Saved a bundle and had fun doing it (I’m weird that way).
Last question: I used the proceeds to buy VTI and VXUS and I understand that there is no way to have the dividends paid to me in USD. However when I look on Webroker it shows the “market value” of these securities in CAD which I assume is at TD’s going rate and not the spot rate. Therefore the actual market value of these securities should be higher than what is listed on Webroker. But how could I realize that difference?
If I tried to sell either security it would be sold in CAD and I would have no opportunity to execute the gambit in reverse. Is that right? Do I have to wait until TD allows you to hold USD in an RRSP (someday!) or transfer the assets to another brokerage before selling? Would I need to sell the security and then immediately buy DLR.U and then sell DLR? Would that work? Is there another option I’m not thinking of?
If you’re ever speaking in Vancouver please announce it on your site – I would love to attend. Thanks again for all your hard work!
@Dan D: Thanks for the nice words, and glad the gambit went well!
When a brokerage displays a US security’s value, the CAD price is just an estimate based on the current exchange rate. If and when you decide to sell your US-listed ETFs, you can arrange to have the proceeds “washed” into a USD-denominated money market fund rather than automatically converted to CAD. This concept is explained in the white paper. At that point, if you wanted to convert the USD to CAD you could do another gambit.
I’m not sure how long your time horizon is, but TD has been talking about allowing USD in registered accounts for a couple of years now. It will happen sooner or later, though we don’t know when. All the brokerages have to go that route eventually.
Thanks for sharing great tricks like this. Sorry my English isn’t that good. First time that I hear about this and i like it. I trade with TD Direct Investing and i expect to use this procedure soon. Before I just have 2 questions. First, what is the currency of DLR? Second, how can I buy DLR and sell DLR.U ? Thanks for your good work.
@Denis: The details are slightly different for each broker, but TD Direct procedure is described in this post above, after the 4th paragraph. Norbert’s Gambit is very straightforward, using DLR/DLR.U as they are both traded on the Toronto Stock Exchange, and the underlying ETF is denominated in US Dollar ($10 minus a few cents, I think to take into account the annual MER, if you hold it for that long). So there is no hurry to sell it again once you have bought it (as there would be if you did the Gambit using a company stock like TD, Royal Bank, or POT, etc., traded on both the TSE and NYSE, which is just as well, because TD Direct apparently requires you to wait 3 business days before you can request to journal the stock to the US dollar side. The cost is quite modest, too, working out to 1/2 of the bid ask spread (typically 2 cents) for each trade, which makes a total of 2 x 1/2 x $0.02/ $10 which is 0.20%, plus the commission on 2 trades.
I have never used DLR myself (my daughter has); there is one theoretical hazard that I am puzzled about…
@CCP could you clarify this? Tracking the price of DLR.U over the past 2 years, there are regular stepped decreases in price of 1 cent, about 5 times a year. The prior sequence dropped from $9.99 to $9.90 before resetting to $9.99 in January 2013. The most recent reset to $9.99 (or is it $10.00?) took place in late December 2013, after regular drops only to the $9.95 level. What would happen if the 1 cent drop happened during the 3 day wait before you could sell? Surely you wouldn’t be penalized by selling the share for 1 cent less that you purchased it for? For that matter, surely you couldn’t expect to make 5 cents on the share if you purchased on December 21, and sold December 27. My intuition suggests there should be a mechanism that negates against this artificial loss/profit, but I can’t figure out what it is.
@Denis: I didn’t answer your 2nd question — DLR and DLR.U are ETF products from Horizon, and are bought and sold just like you do on-line for any other ETFs. You purchase and sell DLR in Canadian Dollars; you purchase and sell DLR.U in US Dollars. So, for instance, if you wanted to convert cheaply to US Dollars, you buy DLR for roughly CAD$10.97 (recent price) per share, you wait 3 days, request to journal all the ETF shares (1 share of DLR=1 share of DLR.U) to the US Dollar side, and sell for USD $9.99 per share.
@Oldie and CCP: Thanks. Sorry again for my English.
Basic info before my question : For USD trading without exchange fee, TD Direct use “Auto washed” that only works with “TDB166 money market”. So 1 or 2 days before buying US ETF, I need to switch my USD (hold in “TDB8152 US saving account” or “other USD fund or stock”) into TDB166.
Now, when I read the CCP procedure for “TD Direct investing”, I understand to buy DLR and to sell DLR.U to convert CAD in USD and it’s make me confused. I don’t understand how I can buy DLR and sell DLR.U.
Well, I’am not that good in English, so just keep it simple for me.
Here’s the question : If I want to convert CAD in USD for future US ETF trade, I just have to buy and hold DLR then I have USD in my account ??? OR I have to buy and hold DLR.U ??? OR I have to buy DLR, make a switch to DLR.U and then hold DLR.U until future trade ?
Thanks to clarify this for me.
@Denis
DLR and DLR.U are the same ETF. The U just means it can be sold in USD.
In order to get USD you must buy DLR then sell DLR.U. Typically you want to sell the DLR.U as soon as you can (usually within a week or 2) so that you can use the USD to buy the USD fund you want.
You can also phone Horizons for more information. They are quite helpful over the phone.
@Ryan: Thanks very much !
Is there an amount that is too low to worry about using Norbert’s Gambit to convert currency? What would the minimum amount be for using NG?
In a former post you made the comment in response to a request for converting 3-4K : “NG is of pretty limited usefulness with such small transactions, even if you are paying only one trading commission at Questrade (free to buy, $5 to sell). You’ll save a little over the usual retail spread, but not much.”
Just executed this at BMO using your detailed instructions – worked like a charm!
I think $5k would probably be a lower limit to this strategy. Commissions of $20 + cost of crossing spread of ~$5 – $10 / trade adds up a to a total cost of $30 to $40. At 1.5% you would be paying $75 normally to do the currency conversion, so would have saved approximately $40 for your troubles.
This post is to convert CDN to USD. I have a need to sell USD to buy CDN. I have VEU (USD-16K) at Questrade. I also have XEF at Scotia iTrade. I want to sell VEU, convert USD to CDN without much expense and move the cash to Scotia iTrade and buy more XEF. All of the above in RRSP accounts.
Is there a cost effective way to accomplish this transfer?
thanks for all the great information.
Prasanna
Maple.
@Prasanna: I don;t know much about doing Norbert’s gambit at Questrade. But another option would be to transfer VEA to iTrade and then use their US-Friendly RRSP to convert the currency close to the spot rate. You’d pay $25 for a partial transfer from Questrade, $30 for the US-Friendly service and two trading commissions.
@CCP: “and then use their US-Friendly RRSP to convert the currency close to the spot rate.” Given the lack of transparency that banks and exchangers use in their “no-comission” and other misleading pitches that you have written about in the past, how would you rate iTrades “close to the spot rate”? You are recommending it, so it can’t be too bad, for the lack of customer effort involved. But comparing it with the DLR/DLR.U Gambit’s 0.20% cost (ignoring commissions, for simplicity) how much do they charge?
thanks Dan. I actually have VWO and VEU at Questrade USD RRSP. This was purchased before the new CDN ETFs like VDU, XEF, XEC..etc.. came into being. Now I really want to sell these USD ETF’s and replace them with equivalent CDN ETF’s. Yes, I will lose the 15% withholding tax protection but as has been pointed out in this blog numerous times, it may be worth it as my retirement will be spent in Canada.
I will talk to Questrade and let everybody know the rules to follow at Questrade if they allow the Norbert’s gambit.
best,
Prasanna
Maple.
I’ve just completed my first norbert’s gambit at RBC and the PWL Capital guide was very handy. Thank you for the fantastic blog & all of the help – much appreciated!
@Erin: Great, glad you found it helpful!
Is there enough liquidity in DLR to do this transaction at any size? Or does that matter as can Horizon just create more shares? Average daily volume appears to be about 45,000 at $11 – that is only about $500,000. If you wanted to do $200,000 then you would be a huge portion of the market for that day.
In other words, should you be concerned about the liquidity of the underlying share? Certainly you should be concerned with the volatility as that will affect the bid-ask spread and it may cause the security to move before you complete both sides of the trade.
@Zaphod
DLR is an ETF and is therefore not affected by supply and demand like other products as long as you do a “limit order” on the purchase rather than “market” price.
@Zaphod: We have done Norbert’s gambit in six-figure amounts using DLR many times. In a very large trade it’s certainly possible that it will get filled at two prices, a penny apart. But as Ryan suggests, a thinly traded ETF is not subject to the same liquidity issues as a microcap stock. The underlying holding of DLR is cash, so you cannot move the price of the asset by placing a large order.
https://canadiancouchpotato.com/2012/09/10/etf-liquidity-and-trading-volume/
Hi there, thanks for this great guide! I have a question though.
I just opened an RBC Direct Investing RRSP account. There’s currently no money in it yet, but they allow you to open a practice account with $100,000 CAD of funny money. I tried doing Norbert’s Gambit in the practice account, but it wouldn’t let me sell DLR.U. It said (paraphrased) “we have detected that your position is not sufficient to execute this trade” meaning it doesn’t think I own any DLR.U, therefore I can’t sell any. On the account holdings page, it shows 5000 shares of DLR in the CAD account. The USD holdings are empty.
Is this just a symptom of the practice account, or did I maybe do something wrong? I had expected it go even more smoothly than a real account, since there would be no 3-day settlements in practice accounts.
@Brian S: Yes, others have reported the same problem and it is indeed because you’re doing this in a practice account. It only works in a real account.
First off thank you for detailed information on this specific technique and generally for all the valuable information on this website.
I’m undertaking a significant rebalancing of my personal portfolio and to be most efficient with respect to foreign withholding taxes I want to use US ETF’s for my US and foreign stock holdings (in registered account). Since the amounts are relatively large (over 100K) I want to be most effeicent when it comes to currency conversion.
1) My first question is in the materials that I have read (TD Direct investing guide) where DLR is used to do Norberts Gambit it appears to all happen at once (i.e. purchase DLR, sell DLR-U, but relevent US ETF), but does it have to? I know it makes sense to do it to lock-in your rate, but what if you were in a situation where you really liked where the USD/CAD was trading and wanted to lock-in the USD exposure buy buying DLR and then over time you you would selectively sell DLR-U to purschae certain US ETF’s. Or should you buy DLR, and sell DLR-U and let it go into a TD MM fund? Does this make sense or am I mistunderstanding the concept?
2) To gain my desired equity exposure i will need to buy at least 3 US ETF’s, does the procedure change in any way? given all the variable in play i feel this may become to complicated.
3) Related to #2 once I sell DLR-U and have an amount of USD coming to invest in ETF’s what happen if one of my ETF purchases does not execute, what would happens to my excess US dollars (I think it goes into a TD US MM fund)? How long can it stay there, and does this get drained for my next US ETF purchase? What if I’m short US dollars?
Thanks
@ray: on 1), using the DLR/DLR.U version of the gambit (as distinct from using a stock like Royal Bank’s RY traded on both the TSE and NYSE), it doesn’t have to happen “all at once” (I assume you mean the urgency to sell as soon as you can after making the purchase). Once you buy DLR you have locked in your conversion rate to US Dollars, as each share of DLR is worth USD$10 (more or less, depending on the phase of deductions of the MER). So there is no urgency in selling off the DLR.U (with respect to fears of fluctuating CAD>USD rates) because, in essence, you are already holding the equivalent of US Dollars. Of course, you are not generating interest or income, but that probably wasn’t your issue here.
I’m not going to address 2) and 3) because I’m not all that knowledgable, and I don’t fully understand your concerns — I would have converted to actual USD at my leisure, and then made my USD etf purchases as usual.
@Ray: I’m not sure I understand all of your questions, but in general I can say that once money goes into the USD money market fund it can stay there as long as you want. You don’t need to race to make your ETF purchases on any deadline.
Buying more than one ETF is not a problem. If you have $60,000 USD in the money market fund and make three ETF purchases for $20,000 each you’re fine. I’m not sure what would happen if you try to use more USD cash than you have: if you have CAD cash in the account it may just convert this automatically. If you have no other cash they are not likely to let you go short in a registered account: the trade will probably just get rejected. But I’m not sure how that could happen unless you just made a big error placing your orders.
I deal with rbc investing. I just looked at spot exchange rates at Canadian Forex and it quotes USD/CAN 1.10 ASK and when I log into my rbc investing account there quoting the exchange rate as ONE USD=1.10 can.
Exactly the same rate? So I don’t understand why so much is written about this it looks like there are no exchange rate differences? Am I missing something? Where is the savings?
Mark.
@mark: The rate a brokerage uses when calculating the value of your USD holdings is not the same as the rate you get when you buy or sell currencies from them. They will add a spread, so you will pay more than the spot rate when you buy and receive less when you sell:
https://canadiancouchpotato.com/2012/12/17/how-much-are-you-paying-for-us-dollars/
A note for those who do Norbert’s gambit on TD Direct Investing:
If you buy DLR and sell DLR.U, then attempt to buy a US-denominated ETF before the DLR/DLR.U trades settle (i.e. all three steps in the same day), then you cannot use the full expected $USD proceeds of the DLR.U sale. Instead, you can only use the amount of USD that you would have received assuming the $USD are converted to CAD at TD’s exchange rate (with the 1.5% spread).
If you try to buy a US-listed ETF with the full $USD of the DLR.U sale (minus the commission) you will receive an error “insufficient funds”. But if you buy a US-listed ETF with an amount that is 1-2% less, then the order will go through and after the settlement time (3 days) the correct left-over $USD from the DLR.U sale that was not used to purchase the US-listed ETF will appear in the the TD US Dollar Money Market Fund.
This was very confusing for me the first time, and I was worried that the wash trading wasn’t working properly, but I did an experiment this past week and this was the result. Of course if you have excess cash in the account, then probably the trade will go through. But this issue pops up if you want to invest all of your cash in the account.
@andre, interesting observation. Do you have any idea of whether this also applies when using an inter-listed (TSX and NYSE) stock instead of DLR/DLR.U (which both trade on the TSX)?
@Brian: I would expect the same thing applies with interlisted stocks as well.
There is one other explanation for this effect that I can think of: maybe the wash trades feature requires there to be a minimum amount of $USD left over to meet the minimum purchase requirement of the TD US Money Market Fund ($100 I presume). In my case, the $100 represented 1% of the $10,000 I was converting.
I am new to this Norbert Gambit idea and have read a few articles.
I have a TD direct investing account (non RRSP) so no need for me to contact them to wash the account.
I have a bit of $USD and I wanted to convert it to CAD
so my sceanrio looks like this (DRL.U -> DLR) USD -> CAD
With the 3 day waiting to journal the account would i not be open to market risk with the waiting of the $USD to journal in the $CAD account?
@Kirk: There is no market risk in DLR, only USD currency risk. And if you are already holding USD, then using it to buy DLR doesn’t change that risk. The three-day waiting period means you’ll be be exposed to the USD for three days more than you would have at RBC or one of the other brokerages that allow you to do an “instant Norbert’s gambit,” but that’s a pretty small risk.
@Kirk: “I have a bit of $USD” How little is “a bit?” You’ve done your math, right? Gambitting $5,000 with DLR would cost you about 5000 x 0.002 + $$19.90 = $29.90, assuming you have a low cost trading account that charges $9.95 a trade. That works out to about 0.6% cost. Any higher commission per trade trades or converting a lesser amount would work out to a higher percentage cost; so you have something to compare to your friendly bank or broker’s “low-commission” or even so-called :q “no-commission” offer.
Thanks everyone for the input.
@Oldie – the 0.002 is in reference to the Ask and Bid price spread correct?
@Kirk; Yes. In theory, each time you do a trade your “cost” is half the spread. Typically the DLR spread, usually, but not always very stable, is 2 cents, which is about 0.002 of the DLR price (well, less, actually, right now because DLR is 1.06). So half is 0.001. But you have to make 2 trades for the complete Gambit, so your slippage due to spread comes to 0.002. If the spread skids a little during your trade it may work out slightly different, but not much.
Would using interactive brokers forex to convert cad to USD cost less? Assuming, you only use ib for forex, What would be the min threshold in $ amount and/or # of transactions? IB account cost is $120usd per year. Steps as I understand it: send cad from bank to IB, buy USD with forex, send USD to bank USD account, send USD to discount broker that supports registered accounts.
Just wondering the estimated saving if doing a maximum (5500.00) TFSA transation at the RBC direct investing? Anyone know the actual charges rbc is dinging us for can$ to USD $ transactions.
I am thinking about 80 bucks savings?
Thanks
@Mark: The only way to know for sure is to call RBC Direct and ask for their current rates for a $5,500 transaction:
https://canadiancouchpotato.com/2012/12/17/how-much-are-you-paying-for-us-dollars/
My guess is Norbert’s gambit would not be worth it on a transaction of that size. In any case, using US-listed ETFs for small holdings on a TFSA is probably the wrong choice to begin with. Canadian-listed ETFs are likely to be better:
https://canadiancouchpotato.com/2013/12/09/ask-the-spud-when-should-i-use-us-listed-etfs/
Do any of the brokers mentioned in the article accept accounts for U.S. investors?
@Alan: Most brokerages in Canada will not open accounts for US residents. Even if they could, I expect you would find the IRS requirements to be too onerous to make it worthwhile.
I have a Questrade account that let’s me buy ETFs for free so that would cut down on the transaction fees. $9.95 a trade seems awful steep.
I wonder if you could link a nonregistered questrade account to a regular Canadian dollar bank account and to a second account thats in US dollars (Scotiabank has one). You could put Canadian dollars in the trading account and do the Norbert switcheroo, then transfer the proceeds to the USD account and then go on vacation in the US or whatever and you would only pay $5 to convert all your Canadian money to USD. That’s my theory anyway
@vance: Most brokerages should allow you to link an investment account to a US bank account so you can move USD in and out with our converting it to CAD. (Certainly the bank brokerages do: not sure about Questrade.) And yes, what you describe is indeed possible, though the cost of Norbert’s gambit involves more than the trading commissions. The bid-ask spreads on the DLR trade usually end up costing about 0.20% of the transaction amount, or about $2 on every $1,000 converted.
@ CCP
I did the Norbert’s gambit last week in BMO IL, non-registered account (used POT). I’d done it several times previously in TDDI registered accounts. The reason for the post is that I was told by BMO IL trader that I did NOT have to call in to journal the shares.
There was a little difficulty as I had to explain first to the rep, then to the trader, that POT was actually listed on both TSX and US exchanges. They thought I wanted to journal the shares to the US side in order to take advantage of US$ dividends.
I actually only wanted to buy US dollars, around $3000. It looks like it’s settled – I can post numbers if anyone is interested.
I actually gained a few $$ as POT went up in the time between my buy and the sell on the US side (sell was done while I was on the phone with trader, but done by me online).
I realize that I could easily have lost $ if POT went down – total exposure time was around 20 min. for the phone call, get the trader on phone, etc. But I would rather “gamble” with the stock ‘s lower bid/ask than use the spread of DLR.
As I typed in the bid price, it actually went up by 1 cent, so I re-typed the better bid, then submit. I realize the luck involved.
I can post the $$ values if anyone interested – I thought it was interesting that I was told that I did NOT have to call a trader to journal the shares, but that it would automatically wash.
Anyway, I found your white paper helpful.
@madMike: Thanks for the comment. The process at BMO InvetsorLine is different if you use an interlisted stock like POT as opposed to DLR/DLT.U. With an interlisted stock you don’t need to call a trader because you can buy on one exchange and sell on the other. But because DLR and DLR.U are both listed on the TSX you need to call, as described in the white paper.
It would be interesting to see your numbers. Once you pay two commissions and a small spread my guess is you’d barely do better than the retail rate with a $3,000 transaction, and if the stock moved the other way you could easily have lost money. The gambit typically only makes sense on larger amounts (say $10,000 or so).
I noted the Forex Web site rate spot rate, and the BMO rate around 10 am Apr. 15:
Bought POT 79 shares x $38.16 Cdn = $3014.64 + $9.95 = $3024.59.
Forex: $1 US = 1.0998, $1 Cdn = $0.90925 US.
$3014.64 Cdn x 0.90925 = $2741.06 US.
BMO: $1 US = 1.117, $1 Cdn = 0.895 US.
$3014.64 Cdn x 0.895 = $2698.10 US.
For reasons stated above, time elapsed around 20 min., and stock moved up.
On sale, bid was $34.92, then as I put limit and price, it went to $34.93, so that’s what I placed for limit.
Actual sale: $34.94 US x 79 = 2760.26 – 10.02 (fee conversion) = $2750.24.
I wanted as close to $2741 US, I got $2750 after the 2 fees; Bank conversion would have given me $2698.
So the real question….what is the break even point after $20 in fees assuming stock doesn’t move? And of course I realize I could easily have lost…risky using just $3000.
I seem to remember the spread being $0.01 both ways…as long as stock doesn’t move i.e. complete the sell quickly, the question is could I sell for say $38.20 CDN x 0.90925 = $34.733 US, x 79 = $2743.90 US?
Definitely a good point you make usning DLR where you know your risk.
Sorry – take away $9.95 Cdn, the first conversion fee. So it doesn’t look as good on 2nd glance, but overall worthwhile.
Wow, these guides are great. Thanks for making them available.
Double header question:
1) For TDDI, do I understand correctly that the automatic wash trading is not relevant for non-registered accounts, since you can already hold $USD there? But that that means you do need to call the broker and ask for it to be journaled over?
2) For US citizens, does the short period of time that the CAD fund is held create a PFIC reporting obligation? If so, would stumping the $43 for the same day trade change that?
Thanks!
@Erik: 1) Correct: the wash trading is not relevant for a non-registered account, but you would still need to call the broker to move DLR from the Canadian side to the USD side.
2) Not sure I know the answer to that one. I suppose technically it would, and I’m not sure why using a broker to execute the trade would change anything. But that’s a question for your accountant.
@CCP: Thanks for the quick reply! On #2, unfortuntely I think I know the answer. So let me ask a different question: are there any fund pairs like DLR that both trade on a US exchange, ie can you do Norbert’s Gambit without using any Canadian-listed funds? Problem could be avoided that way.
@Erik: There is no pair comparable to DLR/DLR.U, but you could always use an interlisted stock, such as one of the big banks, POT, etc. There is no PFIC issue with individual stocks. The technique is a little different, though, so you will want to search online for TD-specific instructions.
Hi. I have an account with CIBC Investors Edge and am starting a new portfolio. Please tell me if I have distilled your procedure correctly below, and then please see my questions.
Simplified Steps:
1.Purchase 2500 shares of DLR
2.Call CIBC IE and tell them to sell 2500 shares of DLR.U
3.Buy a US ETF
4.Call CIBC IE and tell them to apply FX NETTING on my transaction in Step3
5.Done
QUESTIONS:
1.Is step 2 instant or is there usually a few days lead time before step 3 can be carried out?
2.In your example you buy 1 US ETF. What if I am starting a new portfolio and need to buy 10 US ETF/Stocks? Do I need to repeat Step 4 (Call CIBC) for each buy? Or can I complete all 10 buys and then call to ask CIBC to apply FX NETTING on ALL 10 transactions at once?