# What's best inside tax shelter? XIC or ZCN



## james4beach (Nov 15, 2012)

Both XIC and ZCN track the TSX Composite, and the performance figures on the ETF web sites are identical, as I would expect.

I'm trying to figure out if one of them will have better performance inside RRSP/TFSA tax shelter. I suspect there is a difference, because inside the tax shelter the only performance you get is the price change + dividends, *ignoring* ROC + reinvested distributions.

Yet ETF performance figures take into account reinvested distributions. If the quoted performance is the same, but levels of ROC/reinvested distributions are different, this suggests to me that the "raw price change" performance will differ. And therefore that one is better inside the tax shelter.

Here are reinvested distributions since 2013
XIC: 0.32854+0.45063 = 0.77917 = approx 4% of fund NAV
ZCN: 0.073188+0.146451 = 0.219639 = approx 1% of fund NAV

You can see this is pretty different over the last few years. XIC has significantly higher reinvested distributions which I think means XIC has lower "raw price" performance. In a taxable account, this would be taken care of by the cost base adjustment which would make them equal.

Does that mean inside the RRSP/TFSA, that ZCN has better performance and is the better fund?


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## james4beach (Nov 15, 2012)

Does anyone have any thoughts on this?

Are reinvested distributions completely irrelevant inside a tax shelter? XIC has more reinvested distributions than ZCN.


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## Eclectic12 (Oct 20, 2010)

Trouble is ... without access to the ZCN numbers, it makes it hard to compare.

I can see your point about the re-invested distributions but I am not sure why RoC can be ignored, particularly when things like RioCan are included.


Cheers


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## james4beach (Nov 15, 2012)

Do you mean the BMO equivalent of the iShares tax characteristics document? That has the details of ROC and reinvested distributions.

I've become used to doing cost base adjustments from the iShares ones but I don't even know where to find the BMO one.


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## Eclectic12 (Oct 20, 2010)

It's not jumping out at me on BMO's web site.

In the meantime I used Jan 2nd, 2014 closing price against the June 20th, 2016 closing price to get a unit gain. Then used Yahoo's historical dividends to addin the cash paid.

ZCN ends up with a unit gain of $0.74 with cash paid of $1.275 for a total of $2.015 while XIC for the same closing prices has a unit gain of $0.71 with cash paid of $1.595 for a total of $2.305


When I get a chance to factor in the ZCN 9999: 10000 Stock Split from Dec 24th, 2013 ... the comparison can be extended to the start of ZCN of June 4th, 2009. The 4:1 split for XIC is Aug 6th, 2008, which does not come into play for this date range.



I'm not sure if ZCN is similar but interestingly, XIC shows "Foreign Income" with "Foreign Tax Paid" for years 2015, 2013, 2009, 2008 and 2007. If ZCN does not have this, one would have thought the foreign tax being lost would have put XIC at a disadvantage.


Cheers


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## james4beach (Nov 15, 2012)

Wow, there was a 9999:10000 stock split?


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## Eclectic12 (Oct 20, 2010)

That's what the Yahoo historical data is listing. 

I'm not finding confirmation sources as the ratio is strange.


Cheers


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