Q: Under what specific circumstances would it be better to hold a US-listed ETF if there is a Canadian equivalent? For example, when it is preferable to use the Vanguard Total Stock Market (VTI) rather than the Vanguard U.S. Total Market (VUN)? — R. F.
Until late 2012, there really were no great options for Canadian ETFs that held US and international equities. If you wanted a low-cost, cap-weighted index fund that did not use currency hedging, you were out of luck. That’s why my Complete Couch Potato model portfolio currently uses a pair of US-listed ETFs for its foreign equity components.
But the case for using US-listed ETFs is not nearly as compelling as it used to be. Since April, iShares and Vanguard have launched inexpensive Canadian ETFs covering the broad US and international markets without currency hedging. For example, the Vanguard U.S. Total Market (VUN), launched in August, is virtually identical to the Vanguard Total Stock Market (VTI)—indeed, VUN simply holds units of VTI.
There are three important differences between these ETFs, however:
- VUN has a higher management fee: 0.15% compared with just 0.05% for VTI
- VTI trades in US dollars, which may result in investors incurring significant currency conversion costs
- VTI is exempt from the 15% US withholding taxes on dividends if it is held in an RRSP
VUN has the edge in taxable accounts and TFSAs
In my opinion, VUN should be the default choice if you’re holding US equities in a non-registered account or a TFSA. In these two account types, neither fund has any tax advantage: both ETFs are subject to the withholding tax on dividends. In a non-registered account, the tax is recoverable by claiming the foreign tax credit, while in a TFSA it cannot be recovered.
That means the only issues to consider in a taxable account or TFSA are the differences in management fees and the cost of converting currency. And in most cases, the foreign exchange costs will have a larger impact.
VUN’s additional management fee of 0.10% (the full MER will likely be a couple of basis points higher) amounts to just $10 on every $10,000 invested. That’s peanuts. If the alternative is paying your brokerage’s normal currency conversion rates (which may be upwards of 1.5%, or $150 on $10,000), then VUN is a no-brainer. Even if you’re comfortable doing Norbert’s gambit, remember this typically involves two $10 commissions and a small spread, so do the math and ask yourself whether it’s really worth it. It probably isn’t unless the transaction is very large.
VTI makes more sense in an RRSP
If you’re holding US equities in an RRSP, then it’s worth taking a closer look at VTI. With the yield on US stocks now at about 2%, the withholding tax represents an additional drag of about 0.30% for VUN. So now the total cost difference—including both the higher MER and the withholding tax—is more like 0.40%.
At that point it’s worth at least considering using Norbert’s gambit to convert your loonies to US dollars in order to purchase VTI. Again, however, the size of the transaction is important. Norbert’s gambit is usually not efficient unless you’re exchanging five-figure sums, so if you’re contributing a few thousand dollars a year to US equities, VUN is likely to be the less expensive option even in an RRSP.
And if you are willing to pay a little extra for the convenience of making all your trades in Canadian dollars (and there’s nothing wrong with that), VUN is likely the most appropriate choice in any type of account.
Just want to get your opinion on my TFSA.
HXT +XMD (commission free)
VUN
VDU
CLF (commission free)
What do you think?
Hi Dan,
Would you please provide an answer to Marcello’s single post and Mk’s second post? I, too, am interested in your advice on this.
Hi Dan,
I have a somewhat somewhat related question. Can ask what is the advantage of adding an international equities ETF (such as VXUS) to one’s portfolio? I think you have mentioned before that for a basic RRSP portfolio, a broad based US and Canadian stock ETF is all you really need for the non-fixed income portion. For a long-term RRSP is there really a need to add another ETF such as VXUS ?
Thanks
Thanks Dan for your reply.
One additional question – over the long haul (ie. 15-20 yrs from now), do you think there will be much difference in outcome between VFV and VUN?
Thanks,
Adam
@Robert C: There’s no right or wrong answer to Marcelo’s question. Personally it seems like a nuisance to build up a holding in VUN and the sell it periodically to move to VTI: I would probably just use VUN in that case. But that’s just my opinion.
@Brian: International equities represent about half the world’s stock markets, and they add significant diversification. In a very small portfolio, adding only the US is better than holding only Canadian equities, but some allocation to overseas stocks is preferable.
@Adam: The additional small and mid-cap stocks should be expected to add a little to the return of the S&P 500: you can look at the relative performance of VTI and SPY to see how this has indeed the case over the last 12 years or so. But the difference is unlikely to be large.
I too am interested in hearing Dan’s comments on Marcelo’s posting
I’m not so sure buying the US version of an ETF is a better deal — even with a lower management fee.
I’m wondering, when I buy the US version of an ETF in my RRSP, if currency exchange from Canadian to US to purchase the fund don’t more than eat up the savings I’ll make in lower fees. I pay those exchange fees again when I sell — possibly twice if I am switching from one US listed ETF to another. Sell the first and pay exchange on the proceeds from US to CDN, then purchase another and pay exchange from CDN back to US.
I use CIBC Investors Edge. Can I instruct them to leave proceeds from US listed securities in US funds so I don’t get dinged exchange every time I make a move in my US listed holdings?
I’ve got VTI and VXUS in a US RRSP with Qtrade. What I’ve found is you can’t DRIP the US ETFs, which is a bit of a pain as well. I’m building up cash from dividends and don’t have the flexibility to roll that into an investment on the $CDN RRSP account to one of the other ETFs I may want to contribute to. I think the flexibility of re-investing dividends may be another advantage to keep all ETFs on the Canadian side.
The only reason I haven’t done that yet is I’m not sure what to replace VXUS with. Any thoughts on that? Any chance there may be a Canadian unhedged version available any time soon?
@Kurt: Good point about not being able to DRIP US-listed ETFs: that is the case at all brokerages, I believe. I share your desire for a Canadian version of VXUS. Vanguard won’t tip its hand about whether it pans to bring one out, but we have been nudging them, for sure. In the meantime, a combination of two-thirds XEF and one-third XEC gets pretty close.
This might be a silly question, but is there not also an advantage to having some investments in US-listed equities as a hedge against a fall in the value of the CAD? Or, more generally, to having investments in both US- and Canadian-listed equities to smooth out changes in the values of the CAD and USD against one another?
@Z: It’s not a silly question at all. It’s true that some currency diversification is beneficial, but holding a fund like VUN (which holds US stocks with no currency hedging) gives you that currency diversification. The exposure to the US dollar comes from the currency of the underlying holdings (US stocks), not the currency in which the fund trades.
Looking at the December distributions for VTI (US$0.494) versus VUN (C$0.0964) – why would they not differ by just the 15% US withholding tax plus the US/C exchange rate plus the difference in MER? Not to the same extent, but the same situation appears if you compare iShares IEFA versus XEF and iShaes IEMG versus XEC.
Hello Dan
You are the one that made me aware of the advantages associated with Horizon’s indexed ETFs that use a swap technique to provide a total return (price appreciation plus dividends). In the case of taxable and (especially) TFSA accounts, shouldn’t HXS or HXS.U be the clear winner over either VUN and / or VTI. The only drawback that I see is the index being tracked (S&P 500 versus the much broader index tracked by VTI or VUN ).
Regards and Happy Holidays
@Steve S: The unit prices of VUN and VTI are very different, and therefore the distribution per share will be scaled accordingly. The two funds may also pay out distributions according to different schedules.
@Michel: HXS might be preferable in a taxable account (depending on your tax bracket), but I doubt it would be superior in a TFSA. While the foreign withholding tax does not apply to HXS, there is a 0.30% swap fee built into the fund, which works to about the same cost. Remember, too, that HXS includes counterparty risk, which some investors may reasonably want to avoid.
Hi Dan,
You say that ” if you’re contributing a few thousand dollars a year to US equities, VUN is likely to be the less expensive option even in an RRSP.” But doesn’t the withholding taxes still make VTI the better long-term RRSP option?
Thanks
@Brian: In theory, yes, but the withholding tax amounts to an additional cost of 0.30% and if you are routinely paying 1.5% or more to convert currency, then the overall cost would be higher with VTI. Even if you use Norbert’s gambit you’ll probably still pay 0.20% on small amounts, so the savings are negligible. The US-listed options are only superior if you can keep your currency conversion costs very low.
Hi Dan,
I had a few questions I wanted to know if you could clarify for me.
My financial advisor (not on commission) is reluctant to recommend the vanguard family of etf’s since they haven’t been around for very long, unlike that with ishares. I try to explain that many of their funds mirror their US counterparts ( for the most part)that have been around for a long time. I would be interested in the Canadian listed vanguard funds, rather than the US listed ones. I think my advisor likes to see 3 yr track records for both etfs and mutual funds so that may be where this advice is coming from.
I wanted to know when does it make sense to use index ETF’s in a portfolio that has already some stocks but also 5 star (morningstar rated) balanced and equity funds (no load, MER under 2%) . I am looking overall at MER’s and how best to grow my portfolio at reasonable cost, using a balance of both but I want to avoid duplication as well.
My advisor wanted me to consider a dividend paying mutual fund but are there not better ETF options at a lower cost that may bring in monthly income from that?
I also wanted to know what are the current thoughts about asset allocation for 2014….I say this because the advice I have received is to shift funds from an international equity (re-balance?) and put more rsp funds in both canada and the US. This seemed to me to be a bit of a departure from years past when the idea was to put more money in investments outside of Canada.
Any thoughts you have would be very much appreciated. Thanks for your time and insights. Sue
Re: “My financial advisor (not on commission) is reluctant to recommend the vanguard family of etf’s since they haven’t been around for very long, unlike that with ishares.”
ETFs are relatively brain-dead easy to manage as they just track the index (or try to). What is important is tracking error or how closely they track their index. You should always chose the cheapest (in terms of management fee) of two ETFs that track the index similarly well. Vanguard is a huge, well established company (I use their ETFs myself), so I personally wouldn’t have any concerns about them. To my knowledge, Vanguard pays no commissions or trailers to sellers of its ETFs (at least, I’ve never seen one). There fees are so low I don’t know how they would be able to. Does iShares pay commissions or trailers? Probably not but you may want to check to see if that is what is motivating your advisor. Claymore ETFs do have an advisor class ETF that is relatively costly as it does kick back a trailer to the selling advisor (http://opinion.financialpost.com/2010/06/01/one-place-mutual-funds-have-etfs-beat-advisor-comp/).
If your advisor is compensated by commissions and trailers, he would somewhat understandably want the bulk of your portfolio in investments that pay him (ETFs generally don’t). He does deserve to be paid for his time. It is incumbent upon you, however, to know how he is compensated. You should tally up the trailer fees he receives from each of your investments and direct buy/sell commissions and ask yourself it you are getting good value for that sum for the time he spends servicing your account (which is typically more than the time he sits with you face to face).
A fee-for-service type advisor has no reluctance to recommend ETFs as he gets his compensation from you directly, not from trailing commissions.
by Leonard: “It is incumbent upon you, however, to know how he is compensated.”
Excellent point.
Mark
My advisor is paid a salary and to my knowledge does not have any trailer fees for funds or etf’s. I seem at times to be more familiar with products than my advisor. For example, the advisor didn’t know about Questrade and being able to buy ETF’s without the commission to buy or about certain 3rd party funds that are really high quality.
I am also perplexed about the feedback I received from my advisor about putting more money into the canadian market this year rather than in the international side of things, apart from the suggestion to continue contributing in the US……I am looking one of the vanguard etf products for this but again my advisor is leery because it has no track record according to them but I question this since the etf’s have been around in the states for years and that to me would suggest the track record is there
Re: “My advisor is paid a salary and to my knowledge does not have any trailer fees for funds or etf’s.”
Does your advisor or the company he works for also manage/administer your account (for example, a bank or brokerage company advisor)? If so, he probably gets a trailer on any mutual funds in your account — or his employer does. In the latter case, he might get a bonus based upon how much you have invested in the plan administered by the company that employs him and how much your account produces in fees, commissions, and trailers for his employer.
Re: “I am also perplexed about the feedback I received from my advisor about putting more money into the canadian market this year”
In my case, I am also doing this. My US investments did much better than my Canadian ones last year (returns that were Goosed even further by the decline in the $CDN relative to $US) and to keep my desired asset allocation, I had to rebalance (sell great performing US assets and move funds to the Canadian side of my account). The Canadian market is relatively cheap compared to US, so I see it as buying low.
I think you are correct that your advisor cannot really say Vanguard does not have a track record (founded in the 1970s and managing trillions in assets). They are relatively new here in Canada, but they are enormous and well established as a company. Look into whether trailers are paid by iShares or another alternative your advisor recommends.
How about…. accumulating VUN (because buying ETF’s is free for me in Questrade) all year. Then converting it over to VTI at the end of the year. Does it make sense to do this?
@Jordan: That’s probably fine for Questrade, though it doesn’t solve the problem of eventually having to convert the CAD to USD to buy VTI. Unless you’re doing Norbert’s Gambit, that’s going to be expensive.
I love this site! Quick question – since withholding tax on VUN is not recoverable in a TFSA should I keep that ETF in my taxable account instead of in the TFSA (assuming my TFSA and RRSP space is limited).
@Daniel: Glad you’re enjoying the site. Asset location decisions (determining which fund should go where) depend on several factors, of which foreign withholding tax is just one. There’s no way to answer your question without first assessing all the relevant details.
I am now at the age where I had to convert my self-administered RRSP to a RRIF and in 2014 will be making my mandatory minimum withdrawals. I need to prepare for the day when my younger and non-investor-savvy wife will have to look after this account, and so am setting up a mock Uber Tuber portfolio as if I had set it up for an initial Jan. 1 2014 value of $240K. All so I can get a feel for the comparative performance throughout 2014 between it and my actual RRIF. But I want to hold only CDN-hedged ETFs in it. Do you have a recommended substitute for VBR?
@Bruce: The only US small-cap ETF that is hedged to Canadian dollars is this one. There is no value component, however:
http://ca.ishares.com/product_info/fund/overview/XSU.htm
Thanks for the very prompt response. XSU was also all I could find, and while lacking the value component I am intrigued that its One Yr total return is 8% better than VUS, though on the very short YTD basis the performance balance is reversed. Your web site and the Spud exchanges have been wonderfully stimulating.
Hi CCP – I used the excel spreadsheet you posted for comparing US to CDN ETFs held in an RRSP and inputted the MERS for VTI and VUN. Under all the scenarios I ran (assuming both small (~$2K) and large (~$50K) annual contributions) over a 30 year timeframe VTI’s investment return beat VUN’s. Am I’m missing something or is your recommendation about “VUN being likely cheaper in an RRSP if you’re only contributing a few thousand dollars a year” based on a shorter time frame (~10 years), underwhich VUN does appear to the better investment?
Thank you.
@CCP: Is there anything available in Canada like XSU for US small cap (with or without value component) but without CAD hedging?
@Oldie: No, not that I am aware of.
@CCP
In a previous post https://canadiancouchpotato.com/2010/10/18/are-us-listed-etfs-really-cheaper/
you mentioned the benefits of US-listed ETFs vs. Canadian ETFs. Now, this post is rather old and it assumes that the Canadian ETF simply holds the US-listed version of the same fund, but would we be able to apply the same logic to something like VTI vs. VUN?
The spreadsheet provided in the 2010 article clearly demonstrates the advantages for the US-listed ETFs in the long run despite the 1.5% foreign exchange fees. Am I misunderstanding?
Appreciate any guidance. Thanks!
@Chris: There’s no question that US-listed ETFs have many advantages over the long run, especially in RRSPs, but those advantages can take a long time to show up. As I tried to explain in this post, there’s no simple answer: the best choice depends on the account type, what you’re paying for currency conversion, the size of the holding and whether you value the convenience of trading only in CAD.
Hello
I bought my first etf, $22,000 of VUN in early march and it’s been down every week to date. Have I made a poor choice? This is a long term investment for me (retiring in 10 yrs) and I don’t plan on selling but curious as to why the consistent loss. I plan to follow the couch potato portfolio for Cdn, Int and Bond ETF’s but kinda nervous now. Any incite is greatly appreciated. Tks Brenda
@Brenda: It’s very important to understand the risks inherent in the stock market. Like any stock fund, VUN can and will fall in value, and not just over a couple of months, but even a few years. It’s quite possible for a fund like this to lose 40% to 50% of its value in a market crash: it would have done so in 2008-09, for example. If this makes you nervous, safer investments like short-term bonds or GICs would be more appropriate.
Hello,
Thank you for posting all these articles, they are helpful. I’m a first time question asker here.
I’m a Canadian, trying to decide between VFV (not hedged) and VOO.
-It is for a non-registered account.
-The MER difference isn’t hugely significant as you mentioned.
-I have a US account, and don’t mind having some funds and income in US dollars for the next 10 years. I could also always convert the money prior to investing it at a rate lower than the bank rate (though I’m sure how much lower).
My question is about the dividend yields.
How come the dividend yields between the Canadian VFV and the American equivalent VOO are not the same, given VFV’s only holding is VOO? (1.44% yield for Canadian VFV and 2.01% yield for American VOO). I understand the yields are not calculated exactly the same way, but this doesn’t appear to make up the difference.
Is this due to fees for exchanging the currency of dividends each time? Where is the leftover % going? This appears to be the same case for VUN and VTI as well.
I hope to hear back from you, Thank you very much!
@Lindsay: It’s a good question, and only Vanguard would know for sure: you can always email them directly with questions like this. My guess is that it has to do with the cash inflows that VFV has seen over the last year or so. When this occurs, the dividend yield can be temporary diluted, though this will not affect the total return of the fund. For an explanation, see the last section (“Go with the flow”) in this blog post:
https://canadiancouchpotato.com/2013/12/19/why-has-vre-outperformed-its-rivals-in-2013/
Thank you very much.
I’m just wondering if some of the yield is being lost due to conversion inefficiencies or if it is going elsewhere such as toward expanding Canadian Vanguard.
Do currency conversion inefficiencies, advertising costs etc. only come out of the MER difference, or can they come out of something else, like the yield?
I remember reading somewhere, possibly here, that they are able to convert funds for dividends at the market rate, but I can’t find confirmation of that. Is that the case?
Is it typical that yields are not identical? I just checked and ishares, just like Vanguard, has different yields between its American etfs and equivalent Canadian etfs as well, with the Canadian one always having the significantly lower yield. BMOs $US etfs have an identical % yield to their equivalent $CAN etfs. I’d be interested to compare % yields over the years to see if it’s temporary or not, but it seems like a complicated procedure.
Ultimately, total return is what matters. So you’re saying if the yields are lower, the capital gain would be higher, in the end making the US and Canadian etfs’ returns equivalent, minus the mer difference, and possibly minus currency conversion difference in the Canadian one?
(I have emailed Vanguard Canada. I’d be happy to share it if I get an explanatory response, but it doesn’t seem likely because: “Vanguard’s current registration in Canada does not permit us to speak directly to individual investors on the specifics of our funds.”)
Thanks again. Your articles and responses are appreciated.
@Lindsay: I’ll reach out to my contacts at Vanguard and see if I can get an answer about VFV and VUN specifically. But in general, no, the fund is not going to have a lower yield because of currency conversion costs or advertising, etc. Institutions like Vanguard can convert currency at almost zero cost, and funds aren’t permitted to pay for extraneous costs with investors’ money. Sometimes when a fund first launches there are some start-up costs that drag down returns for a few months, but that doesn’t last, and it wouldn’t show up in the yield.
It’s really important to remember there are many ways to calculate yield. The article below specific to bond ETFs, but the principle applies to equity ETFs as well. The US and Canadian versions of the ETFs seem to use different methods: Vanguard US seems to use “SEC yield,” while Vanguard Canada uses trailing 12-month yield. That makes comparisons essentially useless.
http://etfdb.com/2011/bond-etfs-in-focus-defining-all-the-yield-metrics/
Hi again,
Apologies, I must have made an error in my calculations the first time, as I had a very different number originally. Adding the 4 most recent distributions and dividing it by the current NAV, I get 1.438% yield for VFV and a 1.417% yield for VOO.
Regardless, you have answered what is important. If currency conversion plays almost no role; if start up costs cannot come out of the yield; if a lower yield means a higher capital gain due to cash flows and it does not impact total return, then yields should not be a deciding factor in my decision. Start-up costs would then have to come out of the MER no?
Assuming my most recent calculations and your information are correct, I’m not sure it’s necessary to reach out to your contacts, but it is extremely kind of you to offer.
Thanks once again for your helpful response, also, thank you for linking that article, it is useful.
It seems I made a poor choice purchasing VTI & VXUS to fulfill the US & Intl allocations in my portfolio earlier this year given the exchange fees involved. I’m wondering if I should consider a strategy to convert them over to VUN, XEC, & XEF to avoid future costs of maintaining my appropriate allocations in the future. I assume I could use the “Norberts Gamit” approach to move the funds back to CAD currency? Is there any reason not to pursue this change? Thanks.
@Ray: You could do that if you expect to be making many more contributions in the future. There will be some significant cost to the transaction, even if you use Norbert’s gambit. But over the long term it might be the less expensive and more convenient option.
VUN vs TD US Index I series in an RRSP
I don’t think its feasible to hold VTI in my RRSP because of currency conversion etc. I would be looking at monthly contributions if I went with the TD US index fund vs a yearly contribution if I went with the VUN option.
I realize I will not be able to recoup the withholding tax with either of these options (as I would with VTI) but I am wondering which of these is a better option, in terms of both performance and fees when the withholding tax and transactions costs for purchasing the EFT (maybe once a year to purchase and possibly once to rebalance are factored in. Is there an easy way to calculate this myself that you could advise me where to look?
Your thoughts would be greatly appreciated. Thanks
@Sue: VUN tracks the whole US market (large, mid, and small caps) while the TD e-Series fund tracks the S&P 500, which is large caps only. The returns will usually be very similar, but some years large caps outperform small and other years it’s the reverse. I generally prefer total market funds like VUN when all other things are equal.
CCP,
Is there any issue you can see with holding a majority percentage of a foreign equity assest class in US ETFs and a smaller percentage in Canadian ETFs and then rebalancing only the Canadian ETFs? Hopefully getting the long term advantage of the lower MER for the US portion and the lower currency exchange for the Canadian portion.
As an example, for international equity, holding 70% VXUS, 20% XEF, and 10% XEC and only rebalancing XEF and XEC.
Thanks for the great blog.
Cheers.
@kirk: Thanks for the comment. I’d say the only issue here is that it’s a bit unwieldy. But, sure, if it allows to you reduce costs it’s reasonable.
Now that TD has split my $US ETF holdings (mostly VTI) into a separate RRSP account, what are the implications? I can now trade within that account without worrying about currency conversion and washing trades but are there any other pros and cons such as the US withholding tax? I am 65 and I do not expect to have to draw down on those funds for quite a while but should I consider timing a switch to VUN when the $CAN is low?
@Victor: Now that TDDI allows US dollars in registered accounts, dividends from US-listed ETFs will stay in USD rather than being converted to CAD automatically, so that’s a good thing. There is no effect on withholding taxes, which are exempted on Us securities in an RRSP. But you haven’t avoided the currency conversion issue altogether. If you have CAD that you want to use to buy more US-listed ETFs you still have to convert that money to USD somehow. (I am not sure how TD will handle Norbert’s gambit now.)
The idea of waiting for a favourable time to switch from VTI to VUN is a common misunderstanding. The USD-CAD exchange rate has no effect on the decision to use one or the other, since they both have the exact same currency exposure. I discuss this idea here:
https://canadiancouchpotato.com/2014/01/13/how-a-falling-loonie-affects-us-equity-etfs/
I agree That US ETFs and NG make sense in an RRSP.. (Un)fortunately, I am at the point where all of my tax advantaged/deferred room is taken up with FI/REIT. I am debating whether to use XIC+VXC versus XIC+VXUS+VTI for the equity portion, all of which is taxable (personal and CCPC). I think looking at costs from a total portfolio perspective is instructive.
As I see it, when looking strictly at fees and withholding taxes (i.e. not whether VXC has enough US small cap vs VTI), and assuming a classic 40:60 FI:Equity portfolio with 1/3 Canada, 1/3 US and 1/3 EAFE/EEM, the difference is negligible. For example:
Option 1 (CDN listed ETFs): FI = 50% GICs and 50% VAB. Thus FI MER = 6 bps. Equity = 1/3 XIC + 2/3 VXC, thus EQ MER = (5 + 2*25)/3 = 18 bps. Total portfolio MER is thus 13 bps
Option 2 (US listed ETFs): FI = 50% GICs and 50% VAB. Thus FI MER = 6 bps. Equity = 1/3 XIC + 1/3 VTI + 1/3 VXUS, thus EQ MER = (5 + 5 + 14)/3 = 8 bps. Total portfolio MER is thus 7.2 bps
So a 5 bps difference. Norbert’s Gambit has a cost associated. Let’s say 20bps to get in, and presumably 20 bps to sell back into C$. 40 bps spread over an average 20 year holding period is an annual cost of 2 bps, so now the difference between US and CDN listed ETFs has dropped to 3-4 bps. The importance of this will decline even further as my FI proportion increases with age. For me this difference isn’t worth the hassle of US listed ETFs, particularly given US estate tax risks and the possibility that my SO will be the one dealing with selling the holdings if I kick it prematurely (the bank would take 150-200 bps to sell all back to C$, a cost that would exceed any small savings of NG and US ETFs).
Am I missing something in this analysis?