• Norbert's Gambit TD Direct Investing

Norbert’s Gambit at TD Direct Investing

US-listed ETFS are the most tax-efficient way to invest in foreign equities within your RRSP account.  The funds also tend to have lower annual fees than Canadian-listed ETFs.  However, they must be bought and sold in US dollars, and if you have to exchange your Canadian dollars for greenbacks, it can be extremely costly.  Many discount brokerages charge about 1.5% – or a whopping $150 on a $10,000 conversion.  If you’re going to use US-listed ETFs, you need to find a way to mitigate these high costs.

If you need to convert loonies to US dollars, I’ll show you a technique that can save you hundreds of dollars per transaction.

Introducing Norbert’s gambit

Savvy DIY investors have long used a technique called “Norbert’s gambit” to sidestep these steep currency conversion costs.  The name comes from Norbert Schlenker, an investment advisor in B.C. who was the first to popularize it.

Norbert’s gambit with DLR and DLR.U

The simplest way to do Norbert’s gambit is with the Horizons US Dollar Currency ETF.  This ETF – which is equivalent to holding US cash – is available in two versions.  Both trade on the TSX, but the first, with the ticker symbol DLR, is bought and sold in Canadian dollars, while the second, DLR.U, trades in US dollars.

You can use these ETFs to exchange Canadian dollars for US dollars and then use the proceeds to buy US-listed ETFs.  Norbert’s gambit can be confusing, so I’ve put together a video tutorial that you can follow along with.  For more information on this strategy, please refer to our white paper.

Note: TD Direct Investing began offering US dollar RRSP accounts shortly after our white paper was published, so please refer to the video tutorial below for the updated Norbert’s gambit procedure.


By |2017-04-21T15:42:51+00:00March 7th, 2017|Categories: Foreign Withholding Tax, Norbert's Gambit|7 Comments


  1. Jeff January 27, 2018 at 6:24 pm - Reply

    Hi Justin,

    On my TDDI account home page, it indicates “USD converted at 1.2322”. At the same time on xe.com, the exchange rate is listed as 1.23101. On TD Canada trust it is 1.2707.

    Am I correct in assuming that the forex fee would be applied to the 1.2322 (i.e. it is not already accounted for)…and bring the actual amount up closer to 1.2707? Or is forex within the TDDI platform actually at the 1.2322 rate, “all in”?

    I have reviewed your video on Norbert’s Gambit at TDDI (from early 2017), but am just trying to understand if it is still necessary. This is in a RRSP account by the way.

    Thanks in advance.

    • Justin January 28, 2018 at 7:35 pm - Reply

      @Jeff: Norbert’s gambit (for large enough amounts – generally over $3,000) is going to be cheaper than accepting TDDI’s rate. Comparing TDDI’s rate to XE’s rate provides no information on whether Norbert’s gambit is cheaper.

      Call TDDI, ask them how many US dollars you’ll get for $10,000 Canadian dollars (or whatever amount you’re trying to convert).

      Then, take $10,000 CAD, subtract the $9.99 trading commission, divide by the ask price of DLR, multiply by the bid price of DLR.U, and subtract another $9.99 trading commission. If this gives you more US dollars than TDDI was offering, Norbert’s gambit is superior.

  2. Nick March 26, 2017 at 7:36 am - Reply

    Justin how would you incorporate global real estate like cgr into your model portfolios

  3. Chris March 7, 2017 at 5:20 pm - Reply

    Thank you for the heads up on the 2-day settlement change coming in September. I hadn’t heard about it before. It’s good news.

  4. Vance Slade March 7, 2017 at 1:27 pm - Reply

    Can this only be done using RRSP’s?

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