Investing

What to hold in a non-registered account?

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  • Aug 7th, 2021 12:59 pm
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[OP]
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Apr 17, 2005
4934 posts
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Kitchener

What to hold in a non-registered account?

I apologize in advance if this question has been asked nth times before. I scrolled through the last couple of pages and didn't see anything relevant.

I'm incredibly lazy and I've pretty much have been just maxing out my TFSA and RRSP with VGRO every year and called it a day.

However, the amount of cash sitting in my savings account has become uncomfortable large and feels wasteful. Is there a tax efficient ETF I can just throw money in and let it grow? And won't cause me to tear my hair out at tax time?

Context:
- Mid-30's
- Single, no dependent
- Renting
- No debt at all
- Have a QuestTrade account
- I'd say I'm pretty risk tolerant? Lost a couple thousands on meme stocks (BB, GME, AMC, etc) and didn't really care too much (still holding). I probably won't need to access the funds unless the housing market tanks and houses are affordable again or I retire.

Thank you.
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10 replies
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Dec 12, 2009
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There is no exact answer to your question. If you are too lazy to try and make sense of things, it is hard to overcome that through seeking advice from strangers.
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Deal Fanatic
Aug 4, 2005
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Brampton
Personally I don't think VGRO is a bad option even in a non-registered account. I guess for the most tax efficient way, something like XDIV or any other ETF that focuses on Canadian dividends. Only problem is that some will say that these dividend etfs are not diversified enough depending of your weighing of registered accounts. Of course the most cost effective way would be to invest in strong Canadian stocks individually. However this requires more managing than a set it and forget etf like VGRO.

I'm sure there will be people with more knowledge here than me regarding this. Personally I like the "couch potato" way.
Newbie
Dec 27, 2020
41 posts
74 upvotes
https://www.youtube.com/watch?v=UlmXWT4Rx14

TL/DW: Tax drag on VGRO is around 4 basis points (0.04%) which is worth the sacrifice for its diverse holdings and rebalancing. Remember you'll have to start tracking your ACB calculations once you investing into ETFs outside of your TFSA & RRSP.
Jr. Member
Jul 22, 2018
143 posts
117 upvotes
just dont get anything that gives you dividends and dont sell.
Deal Addict
Nov 4, 2007
1603 posts
795 upvotes
GTA
Canadian Eligible Dividend stocks or ETFs. I'd go with something like XIU or VCN if you don't want to babysit it. Handpick Canadian Dividend Aristocrat stocks if you prefer to research and watch your stocks.

In a non-reg account, you can earn up to $55K in dividends in Ontario annually without paying taxes on it, if that's your only income, due to dividend tax credits.
Jr. Member
Sep 28, 2011
180 posts
195 upvotes
Have a look at Horizons ETFs. Many don't make distributions, which makes them very easy to track in a non-registered account.

HORIZONS S&P 500® INDEX ETF
https://www.horizonsetfs.com/ETF/HXS

Inception Date: Nov 30, 2010 - No distributions in 11 years.

HORIZONS S&P/TSX 60™ INDEX ETF
https://www.horizonsetfs.com/ETF/HXT

Inception Date: September 10, 2010 - No distributions in 11 years.

I see you mentioned you are pretty risk tolerate. Have a look at:

BETAPRO - NASDAQ-100® 2X DAILY BULL ETF
https://www.horizonsetfs.com/ETF/HQU

Inception Date: June 17, 2008 - No distributions in 13 years and a 26.24% CAGR over those 13 years (but with some really good swings).
Last edited by bigblue1ca on Aug 7th, 2021 12:28 pm, edited 1 time in total.
[OP]
Deal Addict
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Apr 17, 2005
4934 posts
1572 upvotes
Kitchener
Thank you for the replies. I was hoping there would be one strategy that fits most people but I'll take a look at the suggestions here and see if I can figure out the pros and cons.
Badman wrote: Personally I don't think VGRO is a bad option even in a non-registered account. I guess for the most tax efficient way, something like XDIV or any other ETF that focuses on Canadian dividends. Only problem is that some will say that these dividend etfs are not diversified enough depending of your weighing of registered accounts. Of course the most cost effective way would be to invest in strong Canadian stocks individually. However this requires more managing than a set it and forget etf like VGRO.

I'm sure there will be people with more knowledge here than me regarding this. Personally I like the "couch potato" way.
department50 wrote: https://www.youtube.com/watch?v=UlmXWT4Rx14

TL/DW: Tax drag on VGRO is around 4 basis points (0.04%) which is worth the sacrifice for its diverse holdings and rebalancing. Remember you'll have to start tracking your ACB calculations once you investing into ETFs outside of your TFSA & RRSP.
How does tax work with holding VGRO in a non-registered account?
Is it only due when I sell?
Will Questrade send me a tax slip of some kind for the taxable portion? I don't remember if it pays dividends or not.
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Feb 1, 2012
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Thundercloud wrote: How does tax work with holding VGRO in a non-registered account?
Is it only due when I sell?
Will Questrade send me a tax slip of some kind for the taxable portion? I don't remember if it pays dividends or not.
This post explains tax reporting in non-reg accounts: etfs-non-registered-account-2480839/#p34808943

This explains tax-efficient investing: https://www.finiki.org/wiki/Tax-efficient_investing

You can gain some tax efficiency and slightly lower fees by holding separate ETFs and optimizing holdings by account, rather than all in one ETFs like VGRO, but at a cost of more complexity. Also separate ETFs can result in higher trade fees unless your broker offers free ETF trades.

Added: Most ETFs, including VGRO pay distributions, either monthly for fixed income funds, or quarterly or semi-annually for equity funds and balanced funds. These distributions consist of whatever income is paid by the underlying holdings and may consist of dividends, interest, capital gains, return of capital, foreign income. These are all reported on the ETF web page and also on the T3 tax slip.
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