Your Complete Guide to Index Investing with Dan Bortolotti

Podcast 8: Couch Potato With a Conscience

2018-11-14T08:19:04+00:00May 18th, 2017|Categories: Podcast|Tags: |34 Comments

Are you interested in indexing but uneasy about the idea of investing in certain “sin stocks”? In my latest podcast, I look at whether you can be a Couch Potato investor and still stay true to your values.

The episode features a detailed interview with Tim Nash, a financial planner, creator of the Sustainable Economist blog and a specialist in socially responsible investing (SRI), with a particular expertise in green ETFs. I first interviewed Tim here on the blog back in 2013, and since then he has been my go-to guy on sustainable investing.

During the interview we discuss several ETFs. Here are links to the ones Tim mentions:

iShares Jantzi Social Index ETF (XEN) offers exposure to 50 large-cap Canadian companies weighted according to environmental, social, and governance (ESG) criteria.

iShares MSCI KLD 400 Social ETF (DSI) is one option for large-cap US stocks. According to Tim: “Really what they’re trying to do is to replicate the S&P 500, but getting rid of the worst of the worst companies.” The fund drops the lowest-ranking 20% of stocks based on their ESG scores.

iShares MSCI USA ESG Select ETF (KLD) takes a different approach: rather than using what Tim calls a “do less evil,” strategy, KLD’s approach is about “doing more good.” The fund holds 100 large- and mid-cap stocks selected for their positive ESG characteristics.

Until recently it was difficult to find good options for international equities with an SRI focus, but Tim mentioned two new ETFs worth considering:

iShares MSCI EAFE ESG Optimized ETF (ESGD) is based on the best-known index for developed countries outside North America, including Japan, Australia and much of western Europe. “Companies with a higher sustainability score have a higher weighting in the portfolio,” Tim explains. “There are still some companies in here that I don’t like very much, but they’re weighted much lower relative to the traditional benchmark. It’s a step in the right direction.”

iShares MSCI EM ESG Optimized ETF (ESGE) uses a similar strategy for emerging markets, including China, Korea, Taiwan and India.

Finally, Tim discussed the PowerShares Cleantech Portfolio (PZD), a US-listed fund that holds a global mix of companies in the green technology sector.

Two robo-advisors currently offer socially responsible options in their ETF portfolios: Wealthsimple and ModernAdvisor. You can read Tim’s review of Wealthsimple’s strategy here.

If you’re interested in SRI, Tim offers independent financial planning tailored to individuals and their values. You can contact him via his website or just follow him on Twitter at @timenash.

Ted’s Bogus Journey

In the Bad Investment Advice segment, I take some cheap shots at poor Ted Seides, who in 2007 bet Warren Buffett $1 million that he could pick five hedge funds that would outperform an S&P 500 index fund over the next decade. That 10-year period ends this December and Mr. Seides has already conceded defeat.  As of the end of 2016, the S&P 500 had delivered an annualized return of 7.1% over nine years. Meanwhile, according to Fortune magazine, “the average for the five hedge funds (whose names have never been made public) is 2.2%.” All five hedge funds lagged by a wide margin: the best grew at 5.6% annually, while the worst delivered an embarrassing 0.3%, less than what you would have got from a Tangerine chequing account.

Earlier this May, Seides published an article in Bloomberg in which he presented a list of excuses for losing his million-dollar wager. I am not above kicking a hedge fund manager when he’s down, but my real goal here was to highlight the bogus reasoning used by other active managers to explain away their own underperformance.

One of my favourites was Seides’s remark that after the crash of 2008–09, “hedge-fund investors stood a much better chance of staying the course and earning the returns on the rebound, even if those returns were less than those of the index fund.” Really? It’s hard to imagine that the investment committee of any pension fund or endowment would have confidently stuck with any hedge fund that underperformed that badly over even two or three years, let alone 10.

As for index investors, this study suggests that during the 2008–09 crisis and the 2011 bear market, Vanguard investors tended to show significant discipline: “For the most part, investors fared reasonably well by choosing low-cost investments and staying the course, even in the midst of a turbulent investment period.”



  1. Brendan May 18, 2017 at 11:22 am

    I loved your rebuttal to Mr. Seides – you needed a mic drop at the end! Your comment about buying the S&P not being a bet for a bull market, as much as it’s a bet against active management, captured the mentality of a passive investor. What Mr. Seides missed is that we don’t have any particular outlook on the S&P – but do hold the belief that no manager can add value. (If the S&P is poor in the next 10 years, so will the active money) Your words reminded me of a great quote (which I think was on the back cover of a Charles Ellis book)… “Indexing is not being passive; it is an active decision to not be foolish and pay for something that isn’t there.” — Suzanne Duncan

  2. Greg Baylis May 18, 2017 at 12:16 pm

    Another excellent piece. Thank you. The part that struck me funny however was the fact that your site chose this article to serve up an ad for ! Ha ha

  3. Brad May 18, 2017 at 4:10 pm

    I’m very skeptical of the socially responsible investing funds. Most have high fees (certainly compared with index funds) and I don’t think they accomplish much beyond making investors feel “clean.” Avoiding shares of “bad” companies doesn’t hurt them (since you’re mainly buying shares from other investors who are selling them), and buying shares of “good” companies doesn’t help them very much for the same reason (although I think the argument is slightly stronger there).

    You can arguably do a lot more good by investing in index funds (which should provide a higher return and lower fees) and donating some of your gains to effective charities that work on green issues than you could do by investing in funds that screen out the bad guys. You can do even more good by focusing on impact investing, which is mainly an area for venture capitalists and accredited investors but there are a growing number of retail opportunities. I have a portion of my retirement portfolio in impact investments through my local credit union.

    I understand many people have an ethical problem with making profits off companies that are destroying the planet, using slave labour, or manufacturing cigarettes, automatic weapons, and other deadly products. But if you consider that the shares you own are likely having no effect on the company’s share price, and that you likely bought your shares from another investor rather than directly from the company, the connections between your shares and the company’s deeds seems pretty tenuous.

  4. Matt May 18, 2017 at 6:26 pm

    Not quite on this particular topic but what do you think of Vanguard’s Momentum Factor ETF as a one stop shop for an equity hot potato portfolio?

  5. A Z May 18, 2017 at 10:02 pm

    @Brad: Your argument generally makes sense to me. For me, the hope is that ESG principles will eventually be valued to the point where they are significantly reflected in the stock’s price, and that when investors buy into SRI funds, they are creating momentum today to reach that point sooner.

    But if this hope is a fantasy, I still like that most SRI funds also have a proxy-voting policy to support ESG-related shareholder proposals (XEN to my knowledge is the only SRI-ETF mentioned in the podcast that does not do this). For this reason, I personally don’t worry as much about which companies are included in these ETFs, since by owning their shares I am supporting pushes for positive changes in their operations.

  6. A Z May 18, 2017 at 10:49 pm

    Another note: iShares opened a third US Equity ESG-ETF: iShares MSCI USA ESG Optimized ETF (ESGU). It has a lower MER of 0.28% and follows a similar selection algorithm to ESGD and ESGE. For what it’s worth, its benchmark index has also outperformed those of KLD and DSI over the maximum time periods I could compare.

    Annualized *net* returns from Nov. 30th 2010 to April 28th 2017:
    MSCI USA ESG Select Index (benchmark for KLD): 12.26% [1]
    MSCI KLD 400 Social Index (benchmark for DSI): 12.81% [2]
    MSCI USA ESG Focus Index (benchmark for ESGU): 13.30% [3]
    MSCI USA Index (for comparison): 13.20% [4]

    Calculated from:

    Annualized *gross* returns from May 31st 2006 to April 28th 2017:
    MSCI USA ESG Focus Index: 8.31%
    MSCI USA Index: 8.27%

    So, from a simple look, ESGU’s benchmark index seems to be best fulfilling the “while exhibiting risk and return characteristics similar to those of the underlying market capitalization weighted index” part of its mandate. It makes sense, given the approach of KLD vs. DSI vs. ESGx described in the article.

  7. Joey May 18, 2017 at 10:50 pm

    I don’t really know that much about trading individual securities, but if you bought a normal index fund and then shorted the stocks you don’t like separately in equal amounts that you’ve bought them in the index, wouldn’t that be the same as not buying them? It would probably be easier than coming up with an index that is kind of arbitrary.

  8. Cliff May 18, 2017 at 11:29 pm

    Waiting for Canadian RI ETFs to show up as I don’t want to deal with US$ currency issues…

  9. Oldie May 19, 2017 at 7:11 pm

    @Brad: I’m trying to understand what’s really going on when you buy RI ETFs vs regular S&P500 Index ETFs, for example. You say it makes no difference to the funding of the “unethical” businesses.

    Suppose we limit our real-life scaling down to a single company, say, Mike the local corner Fentanyl dealer. He is short of cash and requests an interim funding loan. You lend him $5k and he repays you in 2 weeks with $7k. I can’t work out the annual interest, but it helps that you have local connections with muscle and baseball bats, so your repayment probability is enhanced, and you have made an exorbitant profit, and it’s a win-win situation. You have obviously benefited, but I think Mike also benefits through your investment, although he might have been better off sourcing more favourable interest terms.

    But your conscience has to bear the consequence of helping Mike stay in business. or, perhaps, even being in business with him, if you take the chain of responsibility seriously.

    How is this different (apart from the degree of dilution of your contribution) from investing in armaments manufacturers who might produce land-mines as part of their output, or in Big Tobacco, who must form some component of the S&P 500? I have never thought about this before, and perhaps it was immaterial in that the only alternative was not to invest in the big general national and international index ETFs (and Canadian TSE Indexes too, I guess). But I guess we have a choice now. It seems to me that investing in the S&P index or unfiltered international index must include funding of unsavoury companies, no matter how small that contribution is. Please explain how the logic does not follow.

    The fact that if you don’t fund the unsavoury business, there will be no shortage of other investors who don’t mind getting involved is not the issue here. You don’t have to fund Mike the Fentanyl dealer either, even though the profit ratio is high. The fact that Mike has other sources of funding doesn’t make your own non-involvement ethically compelling.

  10. Oldie May 20, 2017 at 12:24 am

    @Brad: what I meant to say was that the fact that Mike would find other ways to stay in business even if you were not to lend him money does not reduce your responsibility in the harm caused by his activities if your funding was used as working capital — essentially you were a co-investor, or at very least a financier with some skin in the game.

  11. David Simpson May 20, 2017 at 6:01 am

    Socially Responsible Funds is simply a marketing concept …. did no one read the SPIVA Scorecard showing active funds lose 80 or 90% to index funds … do you people think you know which funds will be outperforming 15 yrs from now.

    I guess if giving money to the richest organization in the world (catholic church) makes you feel you are doing good , buy a socially responsible fund.

  12. Brad May 20, 2017 at 7:17 am

    @Oldie: but the reality in most cases is that if my sell my shares in the bad company, they will be bought almost immediately by another investor. So the impact of my disinvestment on the company’s share price, even if I own a large number of shares and sell them, lasts a few minutes.

    In most cases, when I’m buying shares on the stock market, I’m not purchasing those shares directly from the company; in the case of initial offering or the offering of new shares I am, but those are exceptions, not the rule. If I don’t buy those shares, someone else will.

    I think this is related to the concept of replaceability (see for example). It’s also a bit like trying to figure out your carbon impact from flying: if you’re taking a commercial jet, choosing not to fly probably won’t affect the airline’s decision to take off unless your decision not to fly forces the entire passenger list to cross a threshold beyond which the flight is uneconomical and will be cancelled. You do bear some “responsibility” for the airplane’s carbon footprint, but your contribution is not crucial: if you stay at home, the airplane will in most cases still take off. If you contact 50 of the other passengers and convince them to stay home, then you’ll have an impact. That’s where the benefit of public boycotts can start to be felt.

  13. Oldie May 20, 2017 at 10:18 am

    @Brad: I think all your arguments relate to dilution of my effect of buying/not buying a ticket or owning/not owning a share. I agree, the dilution factor is huge, and that’s why I didn’t think of any significant consequences of my ownership before. But on the other hand it boils down to what I can control and what I can’t. At least from my ownership standpoint I can choose to support (by owning) or not support. That’s all an individual can do regarding ownership. But the collective effect of individual choices is huge.

    Your point about persuading 50 other passengers not to fly is valid of course, as would be, generally, activism and informing other potential shareholders of the available choice not to own.

    I should mention that the Financial Product of my professional association has the financial clout to own mutual funds that exclude non-ethical products such as Tobacco and others. I don’t subscribe (the funds are actively managed) so I never fully investigated what the non-ethical products were. Interestingly, the association has very recently come up with some Index ETFs that also exclude Non-Ethical shares. It’s only the power of one investor, but I should do my part.

  14. Weekend Reading: May Long Edition May 20, 2017 at 3:04 pm

    […] On the Canadian Couch Potato podcast, Dan Bortolotti interviews a financial planner and expert in socially responsible investing. […]

  15. TwoSolitudes May 21, 2017 at 7:13 am

    I just don’t see the point of ‘socially responsible investing’ particularly for a couch potato. It’s no different than trying to pick stocks and completely counterproductive to the whole concept of passive investing. We are trying to follow the overall index in the cheapest possible way and that is the strategy that has proven to be a winner. This is not cheap and doesn’t follow an index. So, I’ll pass.

    The best thing you can do to support socially responsible investing is to work on changing the behaviors and methods of the companies in your daily life. Support the good ones with your business. The stronger they become the more they will be represented in the index and the more the non-socially responsible ones will be pushed out.

  16. Tristan May 21, 2017 at 11:13 am

    CCP: I think I’d take issue with Tim’s claim that SRI funds will perform the same or better than broad market index funds. Apart from the extra cost due to the active selection strategies, these funds are less diversified than the broad market, so therefore (as per Larry Swedroe) will be less efficient. In other words they will have a wider dispersion of returns with no expected higher return – perhaps they will do better, but on average they will not. Just the same as a portfolio of dividends stocks, which screen out non dividend payers.

    I have nothing against SRI, but I think it’s pushing it a bit to claim that they will do the same or better the market, even if the difference is not likely to be much.

    I love your take down of Ted Seides’s pathetic excuses for losing his bet! Brilliant!

  17. pjb May 21, 2017 at 3:05 pm

    @Oldie, @Brad,

    I stand to be corrected, but my understanding is that the question of the ineffectiveness of boycotting a company’s stocks to not primarily one of scale. That is, the lack of effect of boycotting a company’s stocks is not because only a few people do it. Even if 90% of investors boycotted Big Tobacco Co.’s (BTC’s) stocks, causing the price to crash, the boycott wouldn’t have much effect on BTC. It received the money from stocks sold during the IPO (initial public offering). The price of its stocks on the secondary market doesn’t affect the company. The gains/losses affect the investors who hold the stocks, not BTC.

    Even the idea of 90% of investors boycotting a stock to cause a price drop seems partly self-defeating because unethical investors will step in to fill the gap. If BTC pays $0.20/year in dividends on stocks at $10/share (i.e. 2%/year), then if a boycott starts to cause the price to drop to $5/share, unethical investors will scoop up the stock because dividend yield will have increased to 4%/year.

    A price crash due to an investor boycott might affect BTC’s ability to raise money in future IPOs, but as long as a few investors are willing to invest, the effect may not be large. In general, stock prices reflect investors’ opinions on a company’s ability to make money in the future. However, if investors know that the price drop was due to an ethical boycott rather than the company’s poor prospects, they will buy.

    So, if 90% of investors boycott a company, not much will happen. If 90% of *consumers* boycott a company, that’s a different story.

  18. Brad May 22, 2017 at 5:43 am

    @pjb, I agree with your point. My own points are:

    1. Holding a bad company’s stock doesn’t really help that company, since you most likely bought those shares from another investor rather than the company itself (on the secondary market), and you’re not personally contributing to propping up the company’s share price because if you sold your shares they’d be bought almost immediately by another investor anyway. This also implies that the ethical link between your ownership of a company’s shares and the company’s bad behavior is tenuous. Imagine if I bought a used article of clothing at a thrift store, and the clothing was manufactured by a company that uses slave labour. The company won’t benefit from the sale, and my purchasing the clothing didn’t support slave labour in any way. I might want to remove the company’s logo from the clothing so I don’t advertise it, of course.

    2. Ethical funds that exclude “bad” companies lose the opportunity to influence the bad companies’ behaviour because they lose their voice as shareholders.

    3. Ethical funds that take a more positive approach and focus on buying shares of “good” companies similarly have little impact if those shares were bought on the secondary market, although if demand for those companies’ stock isn’t high I can see a stronger argument for the investors helping to enable those companies to accomplish their mission by maintaining or increasing share price.

    4. Impact investing (which involves directly investing in “good” companies, not buying shares on the stock market) is a much more direct way to ensure that your investments are doing good (and not doing bad). But it’s not an option available to everyone, is much more risky than index investing, and is likely to become another money-making high-fee offering from advisors as the impact investing movement continues to grow.

  19. Canadian Couch Potato May 23, 2017 at 8:45 am

    Thanks to everyone for their comments on the podcast, and on ethical investing. I’ll just add one idea to consider.

    A lot of this debate has centred around whether holding shares in a certain company helps or harms that business. But to someone who feel passionately about this issue, that’s irrelevant. No one seriously believes that a few investors’ decision to exclude a stock from their portfolio will have any meaningful impact on that business. But if you follow that line of reasoning, you also shouldn’t vote, because it is 100% certain that your single vote will not sway the election. Yet most of us vote because we believe it is the right thing to do.

    I agree at that all SRI funds are imperfect, and it is unlikely that any of them will accurately reflect any investor’s own values. But there is nothing wrong with the attempt, and it’s disrespectful to dismiss the idea because it deviates from traditional indexing. As Meir Statman writes in What Investors Really Want, it’s akin to telling an Orthodox Jew that he would do more good by forgoing kosher meats and instead buy cheaper cuts of pork so he can donate the savings to his synagogue.

    What I like about Tim Nash’s approach is that he recognizes that none of the SRI index products are perfect, but also that trying to hand-pick companies leads to bigger problems of diversification and risk. So he continues to look for the right balance, to help individuals invest in ways that allow them to feel like they are being true to their own values while staying as close as possible to the general principles of indexing (low cost, broad diversification, long-term discipline).

  20. Tim Nash May 23, 2017 at 12:50 pm

    @CCP – Thanks so much for having me on the podcast! Your site is a treasure-trove of information and a gift to investors. It’s an honour to contribute in my own niche way.

    @Brad @pjb @Oldie – Great thoughts. I would point to the correlation between sustainability leadership and lower cost of capital – – Less liquidity and lower share prices will negatively impact the company’s ability to raise more capital and expand. If / when these approaches go mainstream, it’ll starve the laggards of capital and help shift the flow towards companies that are leaders in sustainability. Capitalism in action!

    @Joey – My first idea to divest from fossil fuels was to buy the index, then short fossil fuel sectors in proportion to the exposure. But I can’t hold a short position in my registered accounts, so I did global sector ETFs instead (and just left out the carbon-intensive ones).

    @Tristan – Here’s the detailed business case for sustainability from HBR: Does this help explain why I think they’ll outperform?

    @A Z – thanks for running the numbers for the indices of the new ETFs! Those links are bookmark-worthy for me : )

  21. Tristan May 26, 2017 at 10:45 am

    Tim, thanks for the link to the article about the business case for sustainability. I completely understand why you believe that these companies will outperform. However the point is that all the information described in the article is public knowledge, and therefore already priced into the stocks of these companies. Going forward, because a portfolio of these stocks is less diversified than the broad market, it will, as I mentioned, have a higher dispersion of returns. It may perform better, but that is unknowable in advance, but on average it will not.

    I’m not trying to be critical of the strategy, which is has a lot going for it, for a number of good reasons, but although I understand it is your opinion that it will outperform the market, I don’t think that that is consistent with financial theory.

  22. Owen May 31, 2017 at 9:32 am

    Poor Ted. Forever to be an example of active vs passive investing.

    Its a great example of the false belief that active management more than makes up for the extra fees. Its just so hard to do on a regular basis. Even for hedge funds who have absolutely every advantage available to them, from high frequency trading to teams of analysts, they are still unable to beat a well diversified passive portfolio.

  23. Derek June 1, 2017 at 7:44 pm

    I don’t have an economics background but AZ (above) mentioned that ESG is not yet significantly valued to be reflected in the stock price. I’m assuming “triple bottom line” companies would be less profitable, generally speaking, than single bottom line companies, especially if they are diverting profit to environmental or social business improvements. Using this logic, I’m curious what theory drives Tim Nash to say that an index following ESG companies might actually outperform the market index. Is it just lucky math due to the weights attributed to the companies or is there an economic reason?

  24. Brad June 4, 2017 at 1:11 pm

    @Derek, I’m not sure there’s a basis for concluding that triple bottom line companies would be less profitable. Many environmental improvements are profitable, especially in terms of energy use (Lawrence Berkeley Lab did an analysis years ago comparing the ROI on energy efficiency investments with the returns of the S&P 500 and the efficiency improvements came out higher). Furthermore, green companies may be able to get more $ for their products and services because people are willing to pay a premium for the knowledge that they’re getting a sustainable product or service.

    The other thing to consider is that most socially responsible investors view the concept of “return” much more broadly than just a financial return. The financial return is just part of the package; the social and environmental returns are equally weighted in terms of their importance to the investor. So even if these funds end up returning less than a standard index fund would, the investors would be satisfied in the knowledge that their money was used to accomplish good (or to minimize harm, depending on your perspective).

    I’m still unconvinced that it actually works that way with funds that use stocks bought on the market, but it definitely works that way with impact investing, where you’re generally investing directly in companies rather than buying shares from other investors.

  25. Mark June 9, 2017 at 4:35 pm

    So happy you published this. I have been following Coach Potato approach for 3 years and have XEN and KLD. Will definitely now move my other investments to ESGD and ESGE.

    Dan I am glad you have shifted your opinion on this since an earlier blog you had on this topic.

    I agree with your analogy to voting. People should not only consider financial cost and their returns but also consider the cost of the companies (not purely fiscal but social and environmental). This statement I would say should hold true for investing but also consumer products.

    My father once asked why he should recycle and not just throw his stuff out as he is just one person. There is power in numbers.

  26. Canadian Couch Potato June 11, 2017 at 10:04 am

    @Mark: Thanks for the comment. I’m not sure I have shifted my opinion on this issue and there is nothing in the podcast that implies I am endorsing any specific SRI fund. I remain agnostic about SRI: I don’t follow this strategy myself, or with our clients. But I do respect this is important to many investors, and I think it can be done without undue risk. I also feel that it’s important to stay true to one’s values even if it doesn’t have a measurable impact on a business or the economy.

  27. KJF June 15, 2017 at 1:34 pm

    One thing that is often said is that for successful indexing, investors should pick a plan and stick to it, and avoid the temptation to tweak. I agree in theory, but seem to be having a hard time to follow in practice, mostly due to this blog :). I started with the previous generation Complete Potato portfolio, and then switched to the new simplified 3-fund portfolio (which I really like). However, I’d been having thoughts from time to time about whether there’s a more environmentally/socially responsible option just as this new blog came out. I don’t want to complicate my portfolio again by going to the full Organic Potato that Tim proposes, so for now I’ve decided to dip my toe in the easiest way possible by just switching to XEN for the Canadian portion. I’ll keep my eye on this space to see if any suitable one-fund, canadian traded replacement for VXC comes along in the future to complete the switch.

  28. Fiddler July 19, 2017 at 6:49 pm

    fyi : I purchased ishares KLD and ESGA for my wife’s TFSA account. Apparently the US government doesn’t recognize Canadian TFSA’s so the tax is being withheld. Does anyone know how to get the tax re-imbursed ?


  29. Canadian Couch Potato July 19, 2017 at 7:37 pm

    @Fiddler: You cannot recover foreign withholding taxes in a TFSA. To avoid these, you can hold US-listed ETFs in an RRSP instead. Or you can hold the ETF in a non-registered account and recover it with the foreign tax credit.

  30. Fiddler July 26, 2017 at 7:11 pm

    Dan Thanks for the info . Given that there was a currency conversion charge should she continue to hold the US SRI’s or sell them ? I guess I should try and figure out the tax rate that is being withheld and compare that to the currency conversion charges and then these funds have both lost about 5 per cent since she purchased them . Any advice much appreciated.

  31. Fiddler July 29, 2017 at 2:32 pm

    Hi Dan:

    Can the ishares etf’s ( KLD and ESGD) that are held in my wife’s TFSA be transferred directly to her RRSP ? She has quite a bit of room in her RRSP account.

  32. Canadian Couch Potato July 30, 2017 at 9:28 am

    @Fiddler: You can’t transfer securities directly from a TFSA to an RRSP. But you can withdraw the securities to a non-registered account first, and then contribute them in-kind to the RRSP.

  33. Fiddler July 31, 2017 at 9:40 am

    Given that she she doesn’t pay any tax on her income now and will have to include the RRSP as income in the future does it make sense to transfer out the TFSA’s money to a non registered and then transfer it into a RRSP ? maybe we should leave it in our joint non registered account where we can apply to have the withheld tax rebated through the foreign tax credit.

  34. Fiddler July 31, 2017 at 11:36 am

    Hi Dan fyi I received some info from Qtrade regarding shifting the US SRI’s etfs from her TFSA to a RRSP and apparently this can be done directly by completing a deregistration form. see note below

    Yes, you are able to contribute USD ETF’s to your Registered Account (RSP) if you wish.

    Once the RSP account has been setup (, she must submit a deregistration form to pull the shares out of the TFSA, which can be found here:

    I’m still not sure what is the best option, transfer to non registered joint account or to the RRSP

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