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Measuring ETF Performance with DRIP and Tax Implications

  • Last Updated:
  • Jun 22nd, 2019 3:53 pm
[OP]
Newbie
May 14, 2019
3 posts
2 upvotes

Measuring ETF Performance with DRIP and Tax Implications

I thought I'd post about a project I was working on.

It started with writing scripts that scrape the CDS Innovations web site for the purpose of calculating ACBs for my 2018 tax return. Since I had all that data, I thought I'd create a simulator that works out ETF performance, but includes DRIPs and benefits funds that make good tax choices.

I've included a sample output below. I'm looking to see if anybody else would benefit from the results and I should continue working on it.

Using the same data set, I'm also working on a web app that makes calculating ACBs easier. Please let me know if anybody would be interested.

Note: I haven't yet double-checked all the numbers, please let me know if you notice something off.

Code: Select all

// Assumptions
const start = moment('2013-01-14');
const end = moment('2019-01-14');
const initialAmount = 100000;
const tradeFee = 10;

// Approx marginal rates based on $75k income (https://www.ey.com/ca/en/services/tax/tax-calculators-2019-personal-tax)
const taxRates = {
    income: 0.3,
    capGain: 0.15,
    eligibleDiv: 0.075,
    ineligibleDiv: 0.2
};
const taxDay = '04-15';

Code: Select all

Calculating return on $100000 for XIC between 2013-2019
        Date  Type         Shares                  ACB   ACB/share    Cap. Gains
  2013-01-14   Buy   (+5028) 5028  (+100016.92) 100017       19.89
  2013-03-28   RoC           5028       (-0.40) 100017       19.89
  2013-03-28  DRIP     (+36) 5064     (+723.60) 100740       19.89
  2013-06-28   RoC           5064       (-0.46) 100740       19.89
  2013-06-28  DRIP     (+43) 5107     (+821.30) 101561       19.89
  2013-09-30   RoC           5107       (-0.46) 101561       19.89
  2013-09-30  DRIP     (+40) 5147     (+806.80) 102367       19.89
  2014-01-06   RoC           5147       (-0.31) 102367       19.89
  2014-01-06  DRIP     (+25) 5172     (+532.75) 102900       19.90
  2014-03-31  DRIP     (+34) 5206     (+770.10) 103670       19.91
    Calculating taxes for 2013
      Income of 197.99, tax is 59.40
      Eligible dividends of 2711.63, tax is 203.37
      Ineligible dividends of 6.20, tax is 1.24
      Tax credits of 0.20
    Total tax of 263.80, selling 12 share(s) at 22.6 to cover
  2014-04-15  Sell     (-12) 5194     (-238.96) 103431       19.91        +32.24
  2014-06-30  DRIP     (+30) 5224     (+718.20) 104149       19.94
  2014-09-30  DRIP     (+35) 5259     (+826.35) 104975       19.96
  2015-01-06  Phan           5259    (+1727.79) 106703       20.29
  2015-01-06  DRIP     (+34) 5293     (+767.04) 107470       20.30
  2015-03-31   RoC           5293       (-3.86) 107466       20.30
  2015-03-31  DRIP     (+36) 5329     (+850.68) 108317       20.33
    Calculating taxes for 2014
      Capital gains of 1760.03, tax is 264.00
      Eligible dividends of 3142.03, tax is 235.65
    Total tax of 499.66, selling 21 share(s) at 24.5 to cover
  2015-04-15  Sell     (-21) 5308     (-426.85) 107890       20.33        +87.65
  2015-06-30   RoC           5308       (-3.98) 107886       20.33
  2015-06-30  DRIP     (+38) 5346     (+874.00) 108760       20.34
  2015-09-30   RoC           5346       (-3.96) 108756       20.34
  2015-09-30  DRIP     (+41) 5387     (+863.46) 109620       20.35
  2016-01-06   RoC           5387       (-4.09) 109616       20.35
  2016-01-06  Phan           5387    (+2427.54) 112043       20.80
  2016-01-06  DRIP     (+45) 5432     (+906.75) 112950       20.79
  2016-03-31   RoC           5432      (-35.04) 112915       20.79
  2016-03-31  DRIP     (+41) 5473     (+875.35) 113790       20.79
    Calculating taxes for 2015
      Income of 51.79, tax is 15.54
      Capital gains of 2695.33, tax is 404.30
      Eligible dividends of 3286.50, tax is 246.49
      Tax credits of 0.21
    Total tax of 666.11, selling 31 share(s) at 21.61 to cover
  2016-04-15  Sell     (-31) 5442     (-644.53) 113146       20.79        +25.38
  2016-06-30   RoC           5442      (-36.30) 113109       20.78
  2016-06-30  DRIP     (+41) 5483     (+912.25) 114022       20.80
  2016-09-30   RoC           5483      (-35.64) 113986       20.79
  2016-09-30  DRIP     (+38) 5521     (+886.54) 114873       20.81
  2017-01-05   RoC           5521      (-35.89) 114837       20.80
  2017-01-05  DRIP     (+36) 5557     (+888.12) 115725       20.83
  2017-03-31   RoC           5557       (-0.67) 115724       20.82
  2017-03-31  DRIP     (+37) 5594     (+911.31) 116635       20.85
    Calculating taxes for 2016
      Income of 130.55, tax is 39.17
      Capital gains of 25.38, tax is 3.81
      Eligible dividends of 3320.30, tax is 249.02
      Ineligible dividends of 9.08, tax is 1.82
      Tax credits of 0.66
    Total tax of 293.16, selling 12 share(s) at 24.61 to cover
  2017-04-15  Sell     (-12) 5582     (-250.20) 116385       20.85        +45.12
  2017-06-30   RoC           5582       (-0.73) 116385       20.85
  2017-06-30  DRIP     (+42) 5624    (+1008.84) 117393       20.87
  2017-09-29   RoC           5624       (-0.73) 117393       20.87
  2017-09-29  DRIP     (+40) 5664     (+989.60) 118382       20.90
  2018-01-04   RoC           5664       (-0.45) 118382       20.90
  2018-01-04  Phan           5664    (+1653.21) 120035       21.19
  2018-01-04  DRIP     (+23) 5687     (+598.69) 120634       21.21
  2018-03-29   RoC           5687       (-0.85) 120633       21.21
  2018-03-29  DRIP     (+40) 5727     (+976.00) 121609       21.23
    Calculating taxes for 2017
      Income of 99.58, tax is 29.88
      Capital gains of 1698.33, tax is 254.75
      Eligible dividends of 3474.58, tax is 260.59
    Total tax of 545.22, selling 23 share(s) at 24.28 to cover
  2018-04-15  Sell     (-23) 5704     (-488.39) 121120       21.23        +70.05
  2018-06-29   RoC           5704       (-0.97) 121119       21.23
  2018-06-29  DRIP     (+43) 5747    (+1110.26) 122230       21.27
  2018-09-28   RoC           5747       (-1.09) 122229       21.27
  2018-09-28  DRIP     (+47) 5794    (+1197.09) 123426       21.30
  2019-01-04   RoC           5794       (-0.75) 123425       21.30
  2019-01-04  Phan           5794    (+1088.34) 124513       21.49
  2019-01-04  DRIP     (+37) 5831     (+848.78) 125362       21.50
    Calculating taxes for 2018
      Income of 172.38, tax is 51.71
      Capital gains of 1161.32, tax is 174.20
      Eligible dividends of 3980.57, tax is 298.54
      Ineligible dividends of 7.45, tax is 1.49
    Total tax of 525.94, selling 23 share(s) at 23.81 to cover
  2019-01-14  Sell     (-23) 5808     (-494.48) 124868       21.50        +53.15
    We reached the end, selling all shares at 23.81
  2019-01-14  Sell      (-5808) 0       (-124867.63) 0           -     +13410.85
    Calculating taxes for 2019
      Capital gains of 13463.99, tax is 2019.60
    Sale value (138278.48) - initial cost (100016.92) - final taxes (2019.60) = 36241.96
Annualized return on investment for XIC between 2013-2019 is 5.3%
4 replies
[OP]
Newbie
May 14, 2019
3 posts
2 upvotes
Here's a summary of popular ETFs and their tax efficiency, May 2014 - May 2019.

Code: Select all

Name                                                 Ticker  Reported  After-tax  Tax loss
Vanguard FTSE Canada All Cap Index                   VCN        4.53%      3.86%    -0.67%
iShares Core S&P/TSX Capped Composite Index          XIC        4.96%      4.21%    -0.75%
iShares U.S. Small Cap Index (CAD-Hedged)            XSU        5.66%      4.84%    -0.82%
iShares S&P/TSX 60 Index                             XIU        5.81%      4.83%    -0.98%
Vanguard FTSE Developed All Cap ex. U.S. Index       VDU        5.52%      4.53%    -0.99%
iShares S&P/TSX Canadian Dividend Aristocrats Index  CDZ        4.07%      2.99%    -1.08%
Vanguard Canadian Short-Term Corporate Bond Index    VSC        2.36%      1.18%    -1.18%
Vanguard Canadian Aggregate Bond Index               VAB        3.58%      2.37%    -1.21%
iShares U.S. High Dividend Equity Index (CAD-Hedged) XHD        6.07%      4.86%    -1.21%
iShares Core S&P 500 Index (CAD-Hedged)              XSP        8.57%      7.33%    -1.24%
BMO Aggregate Bond Index                             ZAG        3.54%      2.30%    -1.24%
Vanguard U.S. Total Market Index (CAD-Hedged)        VUS        8.11%      6.82%    -1.29%
iShares Core Canadian Universe Bond Index            XBB        3.50%      2.21%    -1.29%
Vanguard FTSE Canadian Capped REIT Index             VRE        8.28%      6.49%    -1.79%
Vanguard U.S. Total Market Index                     VUN       13.69%     11.82%    -1.87%
iShares U.S. High Yield Bond Index (CAD-Hedged)      XHY        2.78%      0.42%    -2.36%

It seems like nobody else is really interested in this data, so this will be my last post on the subject. If you're reading this, thanks for your interest!
Newbie
May 25, 2019
29 posts
8 upvotes
Ty for sharing.
Neighbour Joe
FIRE Blogger
Slowly But Wealthy
Deal Addict
Apr 18, 2013
3459 posts
1586 upvotes
Canada
How tax efficient is the TD Canadian Index e-series fund?
[OP]
Newbie
May 14, 2019
3 posts
2 upvotes
To calculate the tax efficiency, I need a full breakdown of all distributions, taxes paid, capital gains, etc. Long story short, I can answer that question for any fund in this list: https://services.cds.ca/applications/ta ... y=All-2018

I noticed 13 "TD" funds on the list... Which one would you like to know about?

I've turned on notifications on this thread, so next response should be a lot quicker :-)

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