tag:blogger.com,1999:blog-4751610667110065763.post3325302927555520506..comments2023-10-13T14:07:08.908-04:00Comments on HowtoInvestOnline: ETF Asset Allocation across RRSP, TFSA and Taxable AccountsCanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4751610667110065763.post-7934276592088618202011-12-02T16:41:29.022-05:002011-12-02T16:41:29.022-05:00Hi Anon,
Good question. The general principle that...Hi Anon,<br />Good question. The general principle that all investments should go in taxable accounts is valid. For purposes of the blog post to illustrate, we assumed the investor had run out of total RRSP & TFSA space and so had to use a taxable account. In that case those US and International ETFs go best in the taxable account where the foreign withholding taxes do not get lost. It's especially bad for the specific ETFs CWO because it holds a US ETF inside, Vanguard's VWO, and for XSP, which holds the US-based IVV. If the portfolio held VWO and IVV instead, those two ETFs could reside equally in the RRSP (but not the TFSA). That conclusion shows up through using the Cross- Border ETF comparison tool linked to in the post - http://howtoinvestonline.blogspot.com/2011/05/cross-border-etfs-heres-free-tool-to.htmlCanadianInvestorhttps://www.blogger.com/profile/05645767559302303541noreply@blogger.comtag:blogger.com,1999:blog-4751610667110065763.post-37397153682438543422011-12-02T01:24:03.330-05:002011-12-02T01:24:03.330-05:00Shouldn't the "foreign" etf's be...Shouldn't the "foreign" etf's be in an RRSP account as their returns are fully taxed as if interest income, and the Canadian etf's in taxable accounts due to preferable treatment of dividends and capital gains?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4751610667110065763.post-46120662751241622212011-11-30T06:48:03.346-05:002011-11-30T06:48:03.346-05:00This comment has been removed by a blog administrator.Ruby Clairehttps://www.blogger.com/profile/01710522322446393469noreply@blogger.comtag:blogger.com,1999:blog-4751610667110065763.post-6770090665746131852011-11-26T06:55:19.386-05:002011-11-26T06:55:19.386-05:00Hi BBC, good questions. 1) TFSA cannot hold all th...Hi BBC, good questions. 1) TFSA cannot hold all the $20k XIC equity because the total contribution limit is only $15k. 2) even if it could, what happens after a big market swing? e.g. graph CLF vs XIC for 2011 - from the beginning of 2011, by April XIC vs CLF had diverged about 15%. That could trigger a rebalance but unless there was unused RRSP contribution room, you could not move funds from the TFSA/XIC to RRSP/CLF. Subsequently, the market has swung in the opposite direction and the rebalance today would be from CLF to XIC but if you had maximized the TFSA funds could not flow from RRSP to TFSA. Transactions within each account could do the rebalancing each time but inevitably you would end up with holdings of both ETFs in both accounts. The idea is not to balance within each account, just overall.CanadianInvestorhttps://www.blogger.com/profile/05645767559302303541noreply@blogger.comtag:blogger.com,1999:blog-4751610667110065763.post-41215840967066666782011-11-25T20:32:56.720-05:002011-11-25T20:32:56.720-05:00I am in total agreement that your portfolio needs ...I am in total agreement that your portfolio needs to be managed as a whole and that this is a huge issue with many portfolios that operate in silos. However, why would you not have all equities in your TFSA and exclude the bonds if as a whole you have your proper diversification? Should you not be looking for the maximum tax-free appreciation; you do not need balancing within specific accounts, just balancing overall?The Blunt Bean Counernoreply@blogger.com