Dan Bortolotti (a.k.a. The Canadian Couch Potato) recently wrote a post on the possibility of a Canadian investor paying US estate taxes if they hold US-listed exchange-traded funds (ETFs). He suggests that a prudent approach for someone vulnerable to this situation could be to stick to Canadian-listed ETFs for their foreign equity exposure.
The main issue with this strategy is that there are currently not many choices for investors looking for non-hedged U.S. or International equity exposure (the only ones that come to mind are listed below – with hefty MERs):
I am hopeful that Vanguard’s next Canadian product launch will include versions of the following US-listed ETFs (non-hedged):
It may seem a bit odd that I would want them to release anything other than a Canadian non-hedged version of VTI and VXUS, but there are a number of reasons taxable investors should prefer to have more than one low-cost choice for both their U.S. and International ETF selections:
It is anyone’s best guess what products Vanguard will come out with next – certainly their recent arrival to Canada should be viewed as a positive development for all investors.