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Archive | After-Tax Returns

Taxation of Foreign Income in a Corporate Account

Dan Bortolotti’s recent blog post raised a number of questions from his readers concerning the impact of foreign withholding taxes within a corporate account.  This is a hot topic, as many successful professionals are choosing to save within their corporation.  Couch Potato investors often allocate 40% or more to foreign stocks, so it’s important for […]

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New Tax Loss Selling ETF Pairs for 2016

It’s been almost three years since Dan Bortolotti and I released our popular Tax Loss Selling white paper. Throughout the paper, we showed investors how to implement a disciplined tax loss selling strategy, using Canadian-listed ETFs.  Near the end of the paper, we even provided suggested ‘tax loss selling pairs’ (which consist of a primary […]

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Perfecting the Perfect Portfolio (Part II)

In my last blog post, I showed Couch Potato investors how they could reduce the foreign withholding tax drag in their RRSP accounts by holding US-listed ETFs.  I’ll admit that the proposed ETF changes required investors to roll up their sleeves a bit, but the cost savings could not be ignored.  But what if an […]

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Perfecting the Perfect Portfolio

The Couch Potato portfolio has it all – low fees, broad-diversification, and simplicity. There’s not a whole lot of room for improvement, but with a few tweaks, investors can lower their costs even further. One such improvement can help mitigate the drag from foreign withholding taxes levied on dividends paid from US and other international […]

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Foreign Withholding Taxes in International Equity ETFs (Revisited)

In August 2014, BlackRock Canada announced that they were changing the investment strategy of the iShares Core MSCI EAFE IMI Index ETF (XEF) in order to reduce the overall amount of foreign withholding tax levied on the fund.  XEF would no longer gain its international stock exposure by holding the iShares Core MSCI EAFE ETF […]

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BXF tears a strip off competitors

Last year, I calculated the after-tax performance of ten short-term bond ETFs in an attempt to find the most tax-efficient of the bunch. The results were not even close – the First Asset 1-5 Year Laddered Government Strip Bond Index ETF (BXF) beat all other funds by a landslide (for the 2014 comparison, please refer […]

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Don’t discount ZDB just yet

In February 2014, BMO released a more tax-efficient version of their flagship BMO Aggregate Bond Index ETF (ZAG). They called their new fund the BMO Discount Bond Index ETF (ZDB).  The fund’s strategy was to buy Canadian government and corporate bonds that were trading at par or at a discount to their par value (for […]

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BXF no longer a strip tease

When First Asset created Canada’s first strip bond ETF in 2013, they claimed that the ETF was expected to be more tax-efficient than other short term bond products currently available in the marketplace. With a full tax year behind us, and armed with a new methodology for calculating the after-tax returns of ETFs, we can […]

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HBB vs. GICs

The recent rate cut by the Bank of Canada has continued to push bond yields lower. The yield-to-maturity on the iShares Canadian Universe Bond Index ETF (XBB) has dropped from 2.22% to 1.70% since the beginning of 2015 (this figure is as of January 28, 2015, and before fees and taxes). Due to the tax-inefficient […]

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After-Tax Returns of Strip Bond ETFs

On June 11, 2013, First Asset released a new short-term bond ETF comprised entirely of strip bonds.  It seemed like an odd choice at the time, seeing as there were already many short-term bond ETFs available to Canadian investors.  Relative to the existing products, the First Asset 1-5 Year Laddered Strip Bond Index ETF (BXF) […]

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