# Life after RRSP Contribution Room



## Maj34 (Oct 7, 2011)

Hi all. I'm hoping you can help me with the next step of my investing journey. 

I've dug myself out of debt, and as of this year, I will have my RRSP room maxed out. I'm feeling stuck at the moment, not sure how to invest next. 

My current retirement portfolio is very simple. It is an aggressive couch-potato-inspired portfolio. It consists of $100k in an e-Series RRSP. It's divided up 30% Canadian Index, 30% US Index, 30% Intl Index, 10% bond index. I also have $35k in a "house fund" that I will continue to grow until I get 20% of a house. Aside from a car, this describes all my assets.

My current plan is to: 
1) Continue to max out RRSP room each year
2) Max out my TFSA for retirement purposes (may take 2-3 years).
3) Start investing outside registered accounts - probably Canadian dividend based for tax reasons (in 2-3 years when TFSA is maxed).

Any thoughts on this so far? 

If not, the only question for me is what to hold in my TFSA. I'm leaning towards more of the same, but in a slightly different format: I'm thinking about getting a Questrade TFSA and buying Index ETFs to go in it.

Last question: Am I at a point where I should consider a visit to a fee-only adviser?


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## humble_pie (Jun 7, 2009)

all this sounds excellent so far, although i question the last point.

on the way to the last point, might you consider putting the house account into a TFSA right now? you mention getting around to a tfsa in the next 2 or 3 years. But there would be 3 advantages to saving the house down payment in a tax-free account: 1) the obvious tax advantages; 2) can withdraw any time & replace at the beginning of the following year; & 3) suppose the minister of finance were to end the TFSA program, there would be a likelihood that existing accounts would be grandfathered. So at least you would already have your account set up & your foot in the door, so to speak.

your plan to open a questrade tfsa that would hold etfs sounds OK. However, if the investment accounts are only a few years old, it's possible you may never have lived through a severe collapse. These are a lot more frightening than a new investor generally imagines.

therefore i'm wondering whether it might be a good idea to tweak the TFSA and/or the RRSP by increasing the bond percentage or placing, say, a 2 or 3 year GIC. This conservative stance in the TFSA is assuming that the tax-free account would be used at first for sheltering & growing the house savings dollars.



Maj34 said:


> Last question: Am I at a point where I should consider a visit to a fee-only adviser?


i sincerely hope this doesn't sound offensive, but $150k is not really enough to attract a top quality financial advisor. You will likely meet up with a salesperson, albeit a salesperson in disguise. From what i can gather, many "fee-based" advisors are also selling product or they are closely linked to product salespersons. True fee-only advisors seem to be few & far between. Their fees seem to start at $3000 & up.

i think you have done an awesome job on your own. No financial planner could have ever guided you better to the fine position you are in today. Why not carry on?


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## GoldStone (Mar 6, 2011)

Maj34 said:


> 3) Start investing outside registered accounts - probably Canadian dividend based for tax reasons


Canadian dividends are more tax efficient than interest income or foreign dividends. Still, they create an ongoing tax drag that you don't need in your working years.

Research ETFs that turn dividends into future capital gains: HXT (Canadian equity) and HXS (US equity). They eliminate the tax drag altogether. Note, this is not a recommendation. I don't use them myself, although maybe I should. I mention them to give you another option to consider.

+1 to what HP said about the adviser. You are doing just fine on your own.


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## liquidfinance (Jan 28, 2011)

GoldStone said:


> Canadian dividends are more tax efficient than interest income or foreign dividends. Still, they create an ongoing tax drag that you don't need in your working years.
> 
> Research ETFs that turn dividends into future capital gains: HXT (Canadian equity) and HXS (US equity). They eliminate the tax drag altogether. Note, this is not a recommendation. I don't use them myself, although maybe I should. I mention them to give you another option to consider.
> 
> +1 to what HP said about the adviser. You are doing just fine on your own.




Sorry to hijack the thread but I hadn't looked into these. So HXT could be a good way to to convert dividend tax into capital gains when holding an etf in a non registered account. 

An interesting thought if you don't need the income now. 

Very low MER as well. :encouragement:


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## andrewf (Mar 1, 2010)

It's pretty much what those ETFs were designed for.


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## GoldStone (Mar 6, 2011)

liquidfinance said:


> Very low MER as well. :encouragement:


There is an extra swap fee that doesn't show up in MER. Something like 0.30% - 0.35%.


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## humble_pie (Jun 7, 2009)

GoldStone said:


> Research ETFs that turn dividends into future capital gains: HXT (Canadian equity) and HXS (US equity). They eliminate the tax drag altogether. Note, this is not a recommendation. I don't use them myself, although maybe I should



when horizons first brought out HXT in 2010 it was the lowest MER top-tsx-stock etf available. MER in the single digit. Folks went gaga with joy.

i didn't like this etf. Or any other similarly structured fund. It's nothing but a bunch of futures. It doesn't own one single share of common stock. Delicately, it calls its list of holdings "index components." 

but who knows who the futures counterparties are. Surely people have heard of Long-Term Capital?

at the time, i posted a james4beachy kind of worry about this fund (the original james had not yet arrived, so i thought i should be the one to speak up.)

at the time, other cmffers said Nah, It's Fine, It's Backed By The National Bank.

banked by natbank? who knows where these banks are carrying their debts? who knows how their futures counterparty obligations have been bundled, chopped, stripped, sliced, slivered & sold onwards to who knows what overseas banks ... panama ... liberia ... naru ...

i better stop, i'm starting to sound like james4.


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## CanadianCapitalist (Mar 31, 2009)

One significant risk in these two products (HXT and HXS) is an adverse tax legislation or ruling that makes holding these products worse than the alternative of plain vanilla ETFs. At this point, it is speculative what shape such a legislation would take but it is not hard to think of scenarios where the tax treatment can be worse off (e.g. treating any gains as ordinary income) than holding vanilla ETFs.


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## andrewf (Mar 1, 2010)

National Bank is the counterparty. The fund is at least 90% collateralized with short term treasuries. IIRC, of course.


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## Maj34 (Oct 7, 2011)

humble_pie said:


> all this sounds excellent so far, although i question the last point.
> 
> on the way to the last point, might you consider putting the house account into a TFSA right now? you mention getting around to a tfsa in the next 2 or 3 years.


Yes, that would make a lot of sense - to put the house account in a TFSA. But I'm eyeing the TFSA mostly for my retirement fund, and now that my RRSP is maxed for 2013, I think I will start using TFSA for retirement starting immediately (well, as soon as I get one). It will contain aggressive allocations, although maybe more than the 10% income component that I'm currently holding in the e-Series.

I believe I could have the TFSA maxed out in about 2 years, so I hadn't considered temporarily putting my house fund in there since a) the house fund will be much more conservative, and b) it'd transition out of there so quickly.



humble_pie said:


> suppose the minister of finance were to end the TFSA program, there would be a likelihood that existing accounts would be grandfathered. So at least you would already have your account set up & your foot in the door, so to speak.


Wow. I hadn't thought of that as a possibility. That'd have serious negative implications for someone like me: started late in the work force because of many years in post-secondary, now have the cash to start funding retirement, but am striking the limitations of tax-sheltered accounts.



humble_pie said:


> it's possible you may never have lived through a severe collapse. These are a lot more frightening than a new investor generally imagines.


Very true - I haven't lived through a severe collapse. I started investing, and learning about investing, in the aftermath of the 08 collapse. I completely admit my inexperience here, but I firmly believe that I'm comfortable with the type of events/collapses that happen every 7-10 years. I've even gone as far as calculating the effect on my accounts and seeing how it sits with me.

I'm confident that I will steer through a collapse and continue to dollar-cost average. That said, you're right, I'm a new investor, so I'll never know until a major market event (inevitably) hits.



humble_pie said:


> i sincerely hope this doesn't sound offensive, but $150k is not really enough to attract a top quality financial advisor. You will likely meet up with a salesperson, albeit a salesperson in disguise.


No offense taken! And thank for the heads up on this. I had always thought of fee-only advisers as being the good guys, and I'm sure some are, but it makes sense that they might be product pushers as well. It's good to get some positive feedback here that I'm taking a reasonable approach. 

I suggested the fee-only adviser because sometimes it seems I'm doing things so differently than the rest of the world; when I chat with co-workers about my investment approach/beliefs they are amazed. They tell me I'm crazy and doing things wrong because:
a) I use this weird e-Series thing,
b) I believe that the markets will outperform real-estate and tell them that recent past performance is not indicative of future results, 
c) I believe in heavy-indexing and maxing out tax sheltered accounts. 

I regularly debate with people who think the best retirement plan is a) trusting the Sunlife plan provided by your company and b) firing all your spare cash into the latest "sure thing" up and coming oil and gas company.



GoldStone said:


> Research ETFs that turn dividends into future capital gains: HXT (Canadian equity) and HXS (US equity). They eliminate the tax drag altogether. Note, this is not a recommendation. I don't use them myself, although maybe I should. I mention them to give you another option to consider.


Thanks GoldStone. I've about 2-3 years away from needing to invest outside RRSP/TFSA, but I always like to plan the next step, so I'll be sure to look into this option.

Also, thanks HumblePie for your response too - a lot of good information there.


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## arrow1963 (Nov 22, 2011)

Hi Maj,

Great job to date. It doesn't sound to me like you'll need to worry about non-registered investing for a while. If you fast forward 2 years, and have maxed out your TFSA & RRSP every year (and caught up on your TFSA contribution room), won't you have a mortgage to pay?

I'd just keep maxing out your registered accounts, and put everything else on the mortgage. If you haven't bought a house yet, build your deposit to be as big as possible in advance.

If you do this and investment markets do great, you won't do as well as you could have, but the bulk of your assets will already be in indexed equities, and you'll do really well.

If markets do poorly, you won't be impacted as much, and your decision to buy/not buy a house won't be influenced by factors out of your control.


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## humble_pie (Jun 7, 2009)

andrewf said:


> National Bank is the counterparty. The fund is at least 90% collateralized with short term treasuries. IIRC, of course.



would you have a source for this? from natbank's own financial statements, not from Horizons' advertising?

my understanding of this fund is that it holds bank swaps only, nothing else. These are complex pairings in which a bank acts as a market-maker, immediately offsetting each swap through an interdealer broker in order to shed risk.

the interdealer broker in turns sells the swap to a number of counterparties - who are frequently overseas banks - so that the risk of the swap becomes more widely dispersed.

swaps are not Tier I capital. In 2008 major european & UK banks failed; ING bank of the netherlands would have collapsed from a heavy load of US bank CDOs if the dutch government had not bailed with a loan.

there are any number of canadian investment products nowadays whose income is boosted or altered by bank swaps & forward contracts. James4beach is correct in always studying the prospectus & the financial reports closely, imho.


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## humble_pie (Jun 7, 2009)

*how an urban legend is born & grows*

.

when HXT debuted, many folks read as far as National Bank & went whoopee-natbank-is-backing-everything! the-only-risk-is-natbank-failure-haha-not-bloody-likely!

next thing u knew, the whoopees turned into urban mythology & HXT became full of swaps that were "at least 90% collateralized with short term treasuries."

in reality, HXT holds nothing but bank swaps. The swaps are instantly sold onwards to who knows what banks in what countries. The sheer number of counterparties does reduce risk. But if enough offshore banks in the pool fail, afaik NatBank has zero obligation to make counterparty failure whole.

i mentioned upthread that james4beach does look at prospectuses & financial statements to see what kind of funny business a too-good-to-be-true fund is really up to. Before james, various folks including CC & even the dumb crumb used to do this on a random basis, at least for the more flagrantly-enhanced income swap & derivative products.

but when james4 arrived, he began inspecting prospectii on a regular basis. IMHO this is an excellent talent to have.

btw when poking around HXT's entrails, i observed that this fund may indeed boast a low-cost .07% MER but this does not include an additional .35% in swap fees per annum, exactly as goldstone points out upthread. The total operating costs are therefore at least .42%, which puts this fund into the medium-to-expensive etf range.

by contrast, XIU's MER is .17% & i don't believe there are any swap fees. Both funds track the same index on the tsx.

urban legends can be harmful, especially in when they run amok in finance.


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## Maj34 (Oct 7, 2011)

arrow1963 said:


> Hi Maj,
> 
> Great job to date. It doesn't sound to me like you'll need to worry about non-registered investing for a while. If you fast forward 2 years, and have maxed out your TFSA & RRSP every year (and caught up on your TFSA contribution room), won't you have a mortgage to pay?


Thanks.

Non-financial issues are preventing me from buying in the next two years, so as far as I can tell now, in two years I will have maxed out RRSP/TFSA, and have a 20% downpayment for a house


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## Guban (Jul 5, 2011)

GoldStone said:


> Research ETFs that turn dividends into future capital gains: HXT (Canadian equity) and HXS (US equity). They eliminate the tax drag altogether. Note, this is not a recommendation. I don't use them myself, although maybe I should. I mention them to give you another option to consider.
> 
> 
> 
> ...


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## andrewf (Mar 1, 2010)

HP, I googled 'HXT counterparty risk', and found this statement from HBP on CC's blog:



> [Horizons BetaPro says that yesterday's post overstated the risks associated with the BetaPro S&P/TSX 60 Index ETF. I received the following clarification from HBP that addresses the three risks mentioned in the post.]
> Counterparty Risk
> 
> 100% of the HXT portfolio is held in Cash securities with our Custodian and Sub-Custodians. Counterparty risk is limited to the marked-to-market value of the Swap, which in accordance with NI 81-102 governing mutual funds, cannot generally exceed more than 10% of the Net Asset Value of the ETF
> ...


Now, you're essentially accusing HBP of misleading the public. Do you have any evidence to support your claims? It seems to me that you're speculating about what National Bank may or may not be doing, or misrepresenting how the swap works. Can you support your assertions?


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## Ponderling (Mar 1, 2013)

Start reading Garth and his Greater Fool web posts. 

I agree with Mr. Turner that sitting on the side lines for real estate to trend downwards is a very sound thing to be doing at this point in time, particualrly is you are in the 20% or less down situation.


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## HaroldCrump (Jun 10, 2009)

Ponderling said:


> I agree with Mr. Turner that sitting on the side lines for real estate to trend downwards is a very sound thing to be doing at this point in time


_Except_ for the fact that he has been saying the same thing for last 10+ years.
All the while flipping R/E himself, in his private investment portfolio.

Someone listening to him would not have bought a house for themselves in the 10 years.
They would also have bought Nortel stock in 2009 :rolleyes2:


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## My Own Advisor (Sep 24, 2012)

If you say the same thing long enough, with the financial markets, eventually your prediction will come true (re: Garth Turner). :hopelessness:


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## Ponderling (Mar 1, 2013)

I guess I have a weakness for Garth after reading in one of his publications more than a decade a go about self directed mortages. I did one for our house and it was a fantastic investment for the five years I had it active, After the upside for my bond holdings went to zero I sold them and put the money into my own mortgage.


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## humble_pie (Jun 7, 2009)

andrewf said:


> ... Now, you're essentially accusing HBP of misleading the public. Do you have any evidence to support your claims? It seems to me that you're speculating about what National Bank may or may not be doing, or misrepresenting how the swap works. Can you support your assertions?



andrew you are the only person talking about "accusing," "misleading the public" & "misrepresenting."

i never said anything about mislead etc. As far as i know, Horizons does a fine job presenting & reporting on all of their funds. Over the years, i've purchased several of them.

what i suggested was to examine how National Bank treats swaps - all of its swaps - according to the bank's own financial statements.

many cmf members regularly express doubt about many highly engineered financial products that are supposed to offer special benefits. Here in this very thread, parties have been specifically expressing doubt about HXT, including the possibility that the tax authorities may get around to issuing an adverse ruling.

to me, the big surprise in HXT was discovering the .35% swap fee, which dwarfs the ultra-low MER that is supposed to be one of this fund's star attractions.


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## andrewf (Mar 1, 2010)

humble_pie said:


> .
> in reality, HXT holds nothing but bank swaps. The swaps are instantly sold onwards to who knows what banks in what countries. The sheer number of counterparties does reduce risk. But if enough offshore banks in the pool fail, afaik NatBank has zero obligation to make counterparty failure whole.


This is demonstrably untrue. HXT has a swap and 100% of NAV in cash held by the custodian. The cash would not appear on Nat Bank's balance sheet because it is an asset of HXT.

Nat Bank may hedge their swap exposure with 3rd parties, but they remain the counterparty of the swap with HXT.


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> to me, the big surprise in HXT was discovering the .35% swap fee, which dwarfs the ultra-low MER that is supposed to be one of this fund's star attractions.


HXT does not have a swap fee. HXS does. Horizons should make this clear. Unfortunately, one has to dig through the prospectus to find this.

http://www.horizonsetfs.com/Pdf/Prospectus/HJE_HXS_HXT_Prospectus.pdf


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> HXT does not have a swap fee. HXS does. Horizons should make this clear. Unfortunately, one has to dig through the prospectus to find this.
> 
> http://www.horizonsetfs.com/Pdf/Prospectus/HJE_HXS_HXT_Prospectus.pdf



according to the prospectus, swap fee arrangements are not binding but instead are for less than one year. Furthermore any swap can be dissolved at any time.

nowhere does the prospectus state that the managers intend or even expect that the non-payment of HXT swap fees shall be a permanent arrangement. They do mention that they anticipate no swap fees for HXE & HXF, but do not mention any such anticipations or expectations for HXT that i can find.




> Under the current Swap for Horizons HXT, the ETF will not make any fee payments to the Counterparty in respect of the value of the Swap. Under the current Swap for Horizons HXS, the ETF will pay to the Counterparty, monthly in arrears, an amount equal to no more than 0.30% per annum of the notional value of the Swap. *A Swap may be amended or replaced at any time and the expenses incurred by the applicable ETF in respect of a Swap may increase or decrease according to its terms*.
> 
> ... Each Swap has a term of less than one (1) year and, provided no default or event of default and no unresolved hedging event or disruption event has occurred and is continuing, *each ETF has the ability to terminate its exposure under a Swap, in whole or in part, at any time*.


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## james4beach (Nov 15, 2012)

I'm not familiar with the Horizons products because I mostly ignore derivatives based ETFs for myself & clients anyway.

I think humble is right though that the nature of the swap can change on short notice. Just because today the counterparty is 100% National Bank, doesn't mean it will still be like that at year end.

Many of these derivatives based funds have some wacky transaction fees embedded in there... perhaps they're waiving them on HXT but I wouldn't count on that going forward. Reminds me of those "tax advantaged" bond funds that the government busted just recently (the ones that tried to evade taxable interest income with derivative games). Sure the MER looks low, but other derivative fees show up under transaction fees. So now I just don't trust a fund that's based on things like swaps.

My big concerns with the swap and other derivative ETFs are counterparty risk (yes even if it's National Bank), lack of transparency about what exactly the derivatives are, hidden fees or inefficiencies in trading those OTC derivatives, and potential changes to the tax system. Don't have to worry about these things with plain vanilla ETFs.


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## humble_pie (Jun 7, 2009)

it's not so much changing the actual counterparty in a new swap i was thinking of, it was rather the ease of amending an existing swap or creating new terms at the time of renewal. The possibilities of both are broadly spelled out in the prospectus.

i would imagine that if the fund company were to change the swapping bank, they would promptly announce this. But there's nothing that would require them to announce small amendments or to maintain an existing swap beyond tonight, should push come to shove.

with respect to HXT, fundco has not even bound itself to the extent of saying it "anticipates" a tradition of no swap fees.

in addition, one notes that there is not just one custodian. There's also a sub-custodian. It's with the latter, i would imagine, that the goods are stashed.


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## MoreMiles (Apr 20, 2011)

HXT did not make sense, at least for today (Sep 19, 2013).

TSX60 has changed -0.20% today, just like XIC... but HXT changed +0.79%.. a difference of almost 1%?!

Is this tracking error from derivative?


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## eulogy (Oct 29, 2011)

I don't think the fear of derivative products will ever disappear. So I ended up thinking about it the likelihood of all the scenarios and really it's less scary that way. The most likely regulatory outcome would be making you pay the tax on what the dividend would be, except it would function like a strip bond (you have to pay the taxes, but you don't receive any dividends). For me, it's not that big of a deal. I could see it being a problem paying those taxes if you have accumulated a lot and don't have much income now. But I don't have that problem. And really, if this type of regulatory change took place, I'd probably still invest in it anyway because the MER is very low and being a derivative product there is no tracking error.


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## GoldStone (Mar 6, 2011)

*My apologies to OP.*

I didn't expect that my casual mention of HXT/HXS in post #3 would lead this thread astray. Maybe moderators can split the Horizons discussions into a separate thread?


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## james4beach (Nov 15, 2012)

But what's the management fee difference between XIU and HXT... only 0.08% right? (Assuming swap fees are waived, which isn't a guarantee)

To me, that 0.08% isn't even sufficient compensation for just the counterparty risk of National Bank. If I were to deposit cash into National Bank, I want more than 0.08% compensation (or backing of CDIC).

If I won't put an uninsured deposit in National Bank for 0.08%, why would I choose HXT over XIU ?


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## andrewf (Mar 1, 2010)

I apologize to OP as well.

james, it's not the same as depositing 100% of NAV in National Bank. 100% of NAV is in cash with the custodian or sub custodian. The only thing at risk from National Bank is any changes in the value of the swap. It's hard to imagine scenarios where National Bank fails and the TSX is rising.


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## CanadianCapitalist (Mar 31, 2009)

I think a discussion around the merits of HXT & HXS is very relevant to non-registered holdings. I agree that there is a risk that HXT could pay swap fees in the future. My point is it doesn't pay one currently and hasn't paid a swap fee since inception.


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## james4beach (Nov 15, 2012)

andrewf said:


> I apologize to OP as well.
> 
> james, it's not the same as depositing 100% of NAV in National Bank. 100% of NAV is in cash with the custodian or sub custodian. The only thing at risk from National Bank is any changes in the value of the swap. It's hard to imagine scenarios where National Bank fails and the TSX is rising.


More apologies from me 

andrewf... ok so maybe it's not National Bank. But 'cash' sitting with someone, custodian or whoever, is just an unsecured loan to someone. Whose liability is it? There is no such thing as 'cash' in the electronic money world... it's a promise from someone.

Whose promise is it? Who is this custodian or sub custodian?

In the end someone is promising to make good on an obligation to repay the 'cash'... if I were an investor in a Horizons product I would want to make certain I know who it is, or (with the uncertainty that exists) get paid a decent risk premium for that uncertainty. 0.08% (the MER savings) is not enough premium for this.


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## james4beach (Nov 15, 2012)

And what's the credit rating of the custodian or sub custodian? What are their segregation practices and policies? What is their capitalization?

Remember again ... there is no such thing as 'cash' in the broker world ... it's a liability / promise to repay. Unless it's sitting in government t-bills which I sincerely doubt. Let me tell you where that 'cash' probably sits ... it likely sits in an institutional money market fund, full of commercial paper. There is credit risk, there is risk of 'breaking the buck', and single issuer credit risk. I bet you an entire thing of candy beans that's where the "cash" sits.


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## andrewf (Mar 1, 2010)

It's not a liability of the custodian. The custodian is just a third party that holds assets. The prospectus says it's cash securities, which usually means short term income securities. What exactly those are is a valid question, I think HBP would answer if asked.

The savings aren't just the difference in MER. There's also the tax deferral benefit as well. It's a bit tougher to quantify. 2% yield and 25% tax on dividends leads to a 50 bps tax drag on returns, offset by an increased capital gains liability. The value of that deferral depends on the time held and returns.


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## eulogy (Oct 29, 2011)

andrewf said:


> The savings aren't just the difference in MER. There's also the tax deferral benefit as well. It's a bit tougher to quantify. 2% yield and 25% tax on dividends leads to a 50 bps tax drag on returns, offset by an increased capital gains liability. The value of that deferral depends on the time held and returns.


Exactly. The compounding deferral of the taxes is what I'm after. Even with HXS with the swap fee, I'm in it completely to avoid that taxed dividend that I have to pay year after year after year. When I don't want or need it.


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## james4beach (Nov 15, 2012)

Ok well I'm glad to hear there's more than just the 0.08% benefit from the MER.

Since there's money market /corporate paper exposure in this product, and since money market cash yields around 1.3%, you should be looking for around that much (1.3%) performance boost to make HXT worthwhile. Otherwise you're just eating the credit risk and getting no compensation for it.


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## andrewf (Mar 1, 2010)

That's your speculation, james.


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## james4beach (Nov 15, 2012)

Well there's either credit risk or counterparty risk in there. Take your pick... it's got to be one of the two.

Since it's certain there's a risk of some kind, the only question is quantifying it. You're right, I'm just speculating.


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## humble_pie (Jun 7, 2009)

custodians aren't immune. Global giant custodian Dexia, based in europe, went bankrupt in the 2008/08 crash. Canadian operations were promptly acquired by RBC which had been dexia's canadian partner all along.

to me the important thing is not whether this quibble or that quibble about this red flag or that red flag is fair & accurate. The important thing is that all investors should carefully study their prospectuses to see what kind of hybrid animal with what kinds of risks they might be buying.

this imho is the big service james4beach has rendered to cmf forum. Showing how to crack open that prospectus & dig deep before buying any kind of fund.

agreed, it's a blessing to have no tax consequences for now in a tsx index product held in non-registered accounts. But the concern has been raised in the media - as well as mentioned upthread - as to whether the CRA will eventually go after these & similar products.


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## james4beach (Nov 15, 2012)

humble_pie said:


> this imho is the big service james4beach has rendered to cmf forum. Showing how to crack open that prospectus & dig deep before buying any kind of fund.


Thanks, humble!

Wish I could get everyone to read the financial statements and prospectuses


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