Ask Dave: All Foreign ETFs RRSP-eligible?

Charles asks:

Are all Vanguard’s ETF RRSP eligible? What about U.S. iShares or Wisdom Tree or Powershares?

Thanks for the help!

Well all US stocks are RRSP-eligible and ETFs are just stocks. I suppose the only hitch is that you have to find a broker that offers registered accounts and allows you to put US stocks in them. Fortunately, I don’t think there are any discount brokers in Canada they don’t allow you to purchase US stocks and that don’t offer registered accounts.

Be wary of Wisdom Tree and Powershares. The MER of Wisdom Tree’s ETFs are higher than Vanguard’s. I was not able to find the MER of Powershares funds within 5 minutes so they are most likely high. They sell an insane number of ETFs–also a sign that their ETFs are probably costly.

iShares has some low MER ETFs. For example, iShares S&P 500 Index Fund (IVV) has an MER of 0.08% compared with Vanguard Total Stock Market ETF (VTI) which has an MER of 0.07%. In general, Vanguard sells the lowest cost ETFs.

3 thoughts on “Ask Dave: All Foreign ETFs RRSP-eligible?”

  1. MERs of many PowerShares and Wisdom Tree products are between 0.5% and 0.85%. This information is available on their websites, usually on the two page PDF profile they have.

    They are more expensive than Vanguard for instance, and some iShares, but I’d argue that they offer a different product, with a far superior selection methodology and, despite the expense, I’d suggest that they offer good products.

    You should read some of their literature relating to back-testing they’ve done.

    I have an article on my site on a couple of their products.

    Also I have both products in my RRSP without any problems.

    Bye for now,

    Jay Walker
    (The) Confused Capitalist

  2. Jay, I’ll have to disagree with you on their “superior selection methodology” and that “despite the expense, they offer good products.” Buying lower MER ETFs with zero “methodology” will get a beat your PowerShares any day, assuming the same risk.

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