# New Member: TFSA for 2015, advice fo a couple ETF's??



## NSVet (Dec 13, 2014)

Hello. New member here. Been following BNN and doing tons of reading on various web sites and thought I had just about had my direction all figured out then I discover TD e-series mutual funds. These e-series funds have very attractive MER's for a fund. My original plan was to start 2015 with a brand new account in Questrade where I can buy ETF's for free. I was going to allocate about 60-65% to one Canadian based US ETF such as A Vanguard, BMO or ishares and the other 35-40% in a good Canadian ETF. I was also thinking of adding some $$ to an RSP in Questrade as well. 

I've been trying to get set-up with TD but I seem to get obstacle after obstacle with setting something up. I come to find out they charge a $100/year admin fee on anything less than $25000. Not too thrilled with that especially if I start rather small and do monthly contributions. I've been dealing with CIBC since the mid 1970's so I'd prefer to just electronically transfer money to do the TD e-series. I was in to speak with a TD rep yesterday and to be honest I did not get very much info so the onus is now on me to figure this out. To be honest, I'm a little nervous about the idea of buying anything directly on a stock market but I figure my strategy would be fairly straight forward. 

Wife and I have a few hundred grand in a high MER global balanced RSP account. I had close to $30000 in a TFSA but withdrew it this year (2014) . I'm slowly but surely mind modifying my wife to be downside of having funds in a high MER account. 


Basically looking at advice on how I should play a US and a Canadian ETF in a TFSA and RSP account, best way to allocate each. I believe there are foreign withholding taxes if you do not play the US properly?? This account would be small potatoes in the grand scheme of things and would be a huge step in becoming a more active investor so I'd like to think I'm doing some postive toward that goal.

If not the e-series can you recommend a good Cdn US ETF and a Cdn TSX ETF? I was considering just be done with it a do a ishares XWD but read that it's complicated with its foreign taxes etc. 

Thanks for any help.


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## cainvest (May 1, 2013)

Hi NSVet,

There are some model portfolios here, you can adjust the CDN/US percentages to meet your needs.


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## NSVet (Dec 13, 2014)

Thanks, much appreciated.


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## newfoundlander61 (Feb 6, 2011)

Check out the Mawer Funds, nothing wrong with ETF's but they are worth a look for a long term holding.


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## GoldStone (Mar 6, 2011)

NSVet said:


> I've been trying to get set-up with TD but I seem to get obstacle after obstacle with setting something up. I come to find out they charge a $100/year admin fee on anything less than $25000. Not too thrilled with that especially if I start rather small and do monthly contributions.


When you said TD, I think you meant TD Direct Investing. That's a brokerage account.

You have another option for e-series and it's completely free. Open a mutual funds account at TD bank branch. Don't mention e-series. Branch staff are not trained to sell them. Once the mutual fund account is open, mail a form to convert the account to e-series account. 7-10 days later you should be good to go. 

Download the form here under "Want to convert an existing mutual fund account?"
https://www.tdcanadatrust.com/produ...funds/td-eseries-funds.jsp#what-does-td-offer

You can move to TD Direct Investing some time down the road, when you qualify for no fees. The transfer within TD empire is free.


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## Ag Driver (Dec 13, 2012)

GoldStone said:


> When you said TD, I think you meant TD Direct Investing. That's a brokerage account.
> 
> You have another option for e-series and it's completely free. Open a mutual funds account at TD bank branch. Don't mention e-series. Branch staff are not trained to sell them. Once the mutual fund account is open, mail a form to convert the account to e-series account. 7-10 days later you should be good to go.
> 
> ...


I have no idea why everyone keeps suggesting the most round about way to get into e-series. What a frustrating process if you go through the garbage open-this-convert-that method.

Open up a TD Direct Investing TFSA. Have ability to purchase and sell anything. Pay no fee's for the account. Simple.


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## GoldStone (Mar 6, 2011)

Ag Driver said:


> Open up a TD Direct Investing TFSA. Have ability to purchase and sell anything. Pay no fee's for the account. Simple.


The OP mentioned $100 fee below $25,000. That implies that he wanted to open an RRSP. So how is your TFSA suggestion helpful?

The process I described is the most reliable way to get into e-series at TD Bank. As I mentioned, branch staff are not trained to sell e-series funds. They get mightily confused when someone walks in and wants to buy e-series. That usually leads to a lot of frustration for the client. It's much easier to open a regular mutual fund RRSP first, then mail the conversion form.


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## Ag Driver (Dec 13, 2012)

GoldStone said:


> The OP mentioned $100 fee below $25,000. That implies that he wanted to open an RRSP. So how is your TFSA suggestion helpful?
> 
> The process I described is the most reliable way to get into e-series at TD Bank. As I mentioned, branch staff are not trained to sell e-series funds. They get mightily confused when someone walks in and wants to buy e-series. That usually leads to a lot of frustration for the client. It's much easier to open a regular mutual fund RRSP first, then mail the conversion form.


The OP has TFSA in the topic title and in the discussion. Goes on about a TFSA withdraw, thus even further room in the TFSA for 2015. My comment is helpful for an eseries TFSA because it is the easiest and most efficient method vs the gong show that was advised. I further clarified that a TFSA does not have any fees associated with it.

I was not talking about an RSP, and did not give any advise on such. 

Why on earth everyone is so determined to open a mutual fund account and convert it to eseries is beyond me. This is a time consuming process that is limiting. There is no reason to treat a TDDI TFSA as "big boy" account. You don't need the capital...and it's free. It opens up MANY more options then a mutual fund account. Why limit yourself ... and through a painful process at that? 

I was in and out in 5 mins for my TDDI TFSA, and the entire Direct Investing platform gives more options. No need to over complicate things and be restrictive.


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## GoldStone (Mar 6, 2011)

The OP is all over the place. He mentioned TFSA, but he also mentioned $100 fee under 25K. That means an RRSP.

I agree that TDDI brokerage account is a better option, as long as you pay no fees.

TD mutual fund account is a temporary solution for someone who is just starting out, until they qualify for a no-fee RRSP at TDDI.


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## Potato (Apr 3, 2009)

Hi NSVet, the main hassle with TD e-series is getting set up in the first place, after that it's really easy to manage. For TD DI, if you just want the e-series you can get a basic self-directed RRSP account, which only charges $25/yr on amounts under $25,000, which is like an extra 0.25% MER on $10,000. Of course, if you have "a few hundred grand" in your RSP to transfer in then you won't have any account fees at all, either way. There are no fees on the TSFA or non-registered accounts at TD DI (if you have kids, there is a $50 annual fee on RESPs, which makes TD Mutual Funds a better go for that).

ETFs are a bit more work, but they're the cheapest around, especially if you use a brokerage like Questrade that allows for free ETF purchases. I'm not sure what you mean by XWD and complicated foreign taxes.


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## Nordic (Dec 17, 2014)

Not an ETF, but a similar Income Trust, with its units traded on the TSX like an ETF:
Canoe EIT Income Fund
http://www.canoefinancial.com/produ...nervest-divesified-income-trust/overview-eit/

Gives you a general Canadian Equity exposure with just under 10% annual distribution (you can DRIP and buy units at .95 of the market price, or get paid in cash)


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## scorpion_ca (Nov 3, 2014)

Why don't you open TDW Basic RSP account and the fees is only $25 yearly and buy e-series fund? If you negotiate before opening the account, they might not charge you fees for 1st year.

http://www.tdwaterhouse.ca/document/PDF/forms/521778.pdf

One of my colleagues went to open TDW basic account (I suggested her as it would save her MER that we pay in our group RSP) and transfer partial employer RSP to the TDW RSP account. The representative didn't know about the Basic RSP account and had to search website to find it. He set up the transfer but it didn't work. It's been a month. TD needs to hire smart people.


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## My Own Advisor (Sep 24, 2012)

I'm with other commenters.

Go to a TD branch, open TD e-series account, and take it from there. 

To support you, buy John Robertson's new book _The Value of Simple_. For <$10, you get a step-by-step guide for how to do what you need


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## lonewolf (Jun 12, 2012)

GoldStone said:


> When you said TD, I think you meant TD Direct Investing. That's a brokerage account.
> 
> You have another option for e-series and it's completely free. Open a mutual funds account at TD bank branch. Don't mention e-series. Branch staff are not trained to sell them. Once the mutual fund account is open, mail a form to convert the account to e-series account. 7-10 days later you should be good to go.
> 
> ...


 Be carful doing this, its like going to the most expensive store in the neighbourhood to buy a single product @ a door crashing sale. You might save on the single product but the bank is not a credit union & you could become one of the people that ends up helping to contribute billions of dollars to their profits if your not disaplined.


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## Eclectic12 (Oct 20, 2010)

Ag Driver said:


> The OP has TFSA in the topic title and in the discussion. Goes on about a TFSA withdraw, thus even further room in the TFSA for 2015.
> My comment is helpful for an eseries TFSA because it is the easiest and most efficient method vs the gong show that was advised. I further clarified that a TFSA does not have any fees associated with it.
> 
> I was not talking about an RSP, and did not give any advise on such...


The trouble is despite the subject as well as some of the content, in the first paragraph the OP starts talking about an RSP. The next paragraph talks about TDDI RRSP pricing giving the OP concerns. So if the OP really does want to use TD eSeries - the advice the setup an free account instead of the TDDI RRSP is valid.

Where the OP wants setup a TFSA, your advice is also valid.


Clearly separating the two type of accounts in the post would help clear things up ...


Cheers


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## My Own Advisor (Sep 24, 2012)

Agreed Eclectic.

Well, if they want to go with ETFs....here are some considerations:

1. RRSP - U.S. ETF = VTI or use CDN-listed VUN and pay your withholding taxes inside RRSP.

2. TFSA - CDN ETF = XIC, XIU, VCE, VCN or ZCN. No withholding taxes with these CDN-listed ETFs.


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## Eclectic12 (Oct 20, 2010)

Nordic said:


> Not an ETF, but a similar Income Trust, with its units traded on the TSX like an ETF:
> Canoe EIT Income Fund ...


The problem is the tax breakdown for 2013 shows 48.4% of the payout is return of capital (RoC) ... the source of the RoC needs to be carefully evaluated.

If it is one's own money being paid back to the investor ... this is likely bad. 

If it is a RE accounting thing where the property if maintained isn't losing value or being used up ... this is likely good as it is either tax deferred, where capital gains tax is paid at sale or it is taxed as a capital gain when paid as cash.

Here are some links:
http://howtoinvestonline.blogspot.ca/2010/07/return-of-capital-separating-good-from.html
http://howtoinvestonline.blogspot.ca/2013/03/return-of-capital-examples-of-good-and.html


Note that an ETF or MF or REIT that reports high amounts of RoC need to be evaluated, the same as this one.


Cheers


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