Bifalgorithm post

As a Canadian in investing in US stocks, this is one way to get rid of the US withholding tax on dividends. Many Canadians are concerned that if the big beautiful bill passes, withholding tax on dividends for Canadian investors will go up. This is a Canadian-based S&P 500 index ETF called HXS. Above me, fund managers GlobalX, portfolio manager GlobalX, they pay no dividends and is denominated in Canadian dollars. So similar to the VFV by Vanguard. The issue with the S&P 500 index for Canadians is that many of them pay a 1.3% dividend. Withholding tax is applied to that. Currently withholding tax is 15%. So if the dividend is 1.3%, you're adding an extra 0.2% of cost annually. In the case of Vanguard's VFV, if the MER is 0.9, add on another 0.2, you're paying approximately 0.29% per year in total costs. Concern is that if the U.S. passes a big, beautiful bill, that 0.2% cost can go up higher. If that happens, I would expect ETFs like this one to become more popular as they use swap agreements to get rid of the dividend. You can see the investment mix here, 99.6% into the S&P 500 through swaps, making almost the entire return capital appreciation with no dividends. The management expense ratio here is 0.11%. So this is a bit higher than VFV's 0.09. But if you include the withholding tax on U.S. dividends, this becomes a better deal. Especially if the 15% withholding tax is adjusted upward. Again, consult your financial advisor. This is not a financial advice. It's just an observation about what would happen if the big beautiful bill passed and dividends were punished in Canada. Learn the lessons about money that your parents and teachers should have taught you. Download my free newsletter linked off the bio. Good luck. Take care.

As a Canadian in investing in US stocks, this is one way to get rid of the US withholding tax on dividends. Many Canadians are concerned that if the big beauti…