Many thanks, Catherine. 1 day ago. The employees on the other hand, contended that the contributions do not ‘vest’ in them at the time of payment and that the monetary benefits accrue only at the time the payments are withdrawn hence, the contributions are not taxable. However I believe equities are the way to go without the 38% boost to their dividends for tax purposes. Considering this, it … Sorry for the typo ! Reply. The accounts, though, are taxed differently. Looking at these numbers alone, XEQT seems like a better choice. The ONLY rebalancing I do is in my taxable account. And, … One important thing to remember about non-taxable accounts is that they might be tax-deferred accounts.� This means that there are no Barrick Gold and Facebook interchanged each other between the two all equity ETFs. The cost of capital gains taxes from liquidating may well be more than made up for with the benefits of a switch, including lower fees. And the quickest way to lose in taxable accounts is by investing in mutual funds that produce the most in taxes. Does it provide a DRIP? Can you suggest if VEQT or similar low cost, no need to re-balance ETF’s are significantly more tax efficient and the best way to invest to replace the dividend stocks like BCE.TO and the banks. My TFSA is full and my RRSP room is pretty much full from my RPP from work. So with a 100% equity portfolio, one big requirement is strong geographical diversification. Please check your entries and try again. At an estimated MER of 0.25%, is it worth the convenience? They use the swap structure for the underlying etf’s though there may be some distributions when they rebalance. To have a 70 equity/ 30 bond ratio would it work to do this: TIPS are treated as other Treasuries in a taxable account with one unpleasant feature: all inflation adjustments to principal are treated as current interest. Withdrawals from a 401(k) or traditional IRA are taxed at ordinary income tax rates. Barrick Gold and Facebook interchanged each other between the two all equity ETFs. VEQT is a “fund of funds”, meaning it’s a wrapper that contains four other Vanguard ETFs. Thanks for subscribing! It’s Vanguard’s solution to a globally diversified 100% equity portfolio. Rumours of an increased capital gains tax were put to rest last week when the Liberals unveiled their second federal budget with no mention of a change to the inclusion rate. And finally, taxable accounts can be really valuable in retirement because they do let you exert a little more control over your tax situation than is the case with your tax-deferred accounts. Horizons also has the HGRO which is 100% equity. However, ZDB is tax efficient in a non-reg account. Between VEQT and XEQT, the top 10 holdings are very similar. Taxable account: VEQT (70 %), ZDB (30%). →, https://milliondollarjourney.com/maxed-out-rrsp-and-tfsa-now-what.htm, https://www.moneysense.ca/columns/new-tax-efficient-etfs-from-bmo/. Please check your email for further instructions. Don’t hold the RSU shares. Most investors won’t argue that they should hold equities in their TFSA first. If you are not contributing the maximum already, increase the contributions to the 401k plan, or fund a traditional IRA or a Roth IRA. EQ Bank Review – Canada’s Best Online Savings Account? Other than ACB tracking for taxes if I sell and when I get a dividend, what other things should be known of when putting VEQT in a taxable account? grant to vest). Is there a product out there that is made up of 100% equity? Ontario. With all these new choices to build a solid low-cost portfolio (even cheaper with commission-free ETF trading), it really is a great time to be an investor. You have shared the tax drag costs for holding VEQT are about another 0.25% (give or take) on top of the 0.25% MER product cost. I need to look into this ETF a little more, but Dan from Canadian Couch Potato does a great job explaining: I would rebalance once or twice a year with VAB and ZDB. Personally, most of my Canadian equity ownership is through Canadian dividend stocks, so our family owns a lot of XAW (or equivalent through XUU/XEF/XEC) as you can see here. ← Dividend Increases, New All-in-One ETFs, Top Ranked Credit Cards, and More! Many thanks, Catherine. Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. For an investor who has no investments in taxable accounts, the difference in MER+FWT between VEQT and the mix of 4 ETFs is 0.36% per year. VEQT is an amazing product but they missed the mark by not making it a Canadian-equivalent of VT. 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