Here’s my thinking on moving some of my CDN RRSP dollars towards more global exposure…

One, Chinese and other growth has created a commodity boom that has pushed CDN dollar to around par with the US; this may be temporary if China slows, oil prices stabilize, actual commodity production rises and likely overshoots as a result of the boom and prices, etc.

Two, going forward three to 5 years, the US financial situation (national debt, unfunded pension, social security and health care deficits, trade deficit, etc.) may cause both the US dollar and Canadian dollar to fall. It MAY just fall because the rest of the world may grow at a faster rate for any number of reasons…

Three, stock markets don’t necessarily rise even if the economy / GDP rises. Dividends allow for compounding growth in those situations. (Read Warren Buffett’s 2001 Fortune article on How the stock market works.)

Four, governments can keep interest rates low for protracted periods. Just look at what Japan has managed to do.

Thanks for this post. It has really changed the way I am viewing my TFSA as I am attempting to build a solid dividend portfolio and of course am trying to minimize taxes.

The iShares DJ EPAC (IDV) fund is interesting for the international component. I actually came across it checking out the PID overview. When you look at the growth of $10K on their chart, the DJ EPAC Index has a significant higher (i.e. 50%) return over 10 years.

Interesting numbers….

I do like the Dividend Achiever’s criteria however, the DJ Dividend Indexes have had some nice returns as well.

THoughts?

Am I looking at the right ETF?

The other ETF that I would have invested is SDY which tracks 50 highest yielding dividend aristocrats in US. If you wanted a one stop shop of the world’s best best dividend growth stocks, such as Mcdonals, Johnson & Johnson, Pepsi, Coca Cola, Procter & Gamble, this is the ETF for you.

Others may look deeper into that fund but for me personally is too expensive and also has a 2% redemption fee for selling before 2 years which is a little much.
I am searching for ETFs, and especially not asian stocks etfs but ETFs fitting the dividend achievers criteria containing high yielding asian stocks. Which is not an easy find hence my asking about advice in here.
I think that mutual fund you mentioned has mainly stocks and is not focused on dividend ones like the topic of this post was all about.

Not to give advice… but you might also want to do some DCA into your RRSP and reduce the chance you buy high during ‘RRSP season’

The fund has a 1.74% MER but Chou has had pretty solid results in some of his other funds over 25 years. Granted, past performance is not an indicator or future success but he has a strict set “margin of safety” criteria.

What do you guys think about using this fund to get Asia exposure?

Interesting DG – I was thinking about putting 15K into the following portfolio (and a similar 15K for my wife) before the March 2nd RRSP deadline:

XIC: 3750 (25%)
VTI: 4500 (30%)
VEA: 3000 (20%)
VWO: 1500 (10%)
XSB: 750 (5%)
XRB: 750 (5%)
XRE: 750 (5%)

Is there no way to get around the 15% withholding on the dividends?

Maybe it’s worthwhile to simply stick with the Canadian ishares equivalents – forget Vanguard altogther??

Thoughts?

Europac from what I understood is a US broker an only deals with US clients, so canadians have now way of opening an account. I heard this question asked in his wall street unspun weekly radio show and he answered to this several times. However what he kind of recommended is for canadians to call in his brokers and get some investing ideas, meaning where europac is investing. Now I don’t know if that would be done for free or not (I highly doubt it) but let’s stay focused, we are DIY investors we want no extra costs ok? :) I would be great to get some investements picks from his company for free but if we can’t not a big deal. As of matter of fact from all his appereances I extracted some examples he gave so maybe is interesting following their evolution just to give an idea. Personally I do think his view for the long term is good and his austrian economics way of looking at the economy and we should try at least to stay away from US assets.
His list included:

1. Ascendas REIT (AEMN.SI)
P/E 8.4, yield 12.9%

2. Singapore Petroleum (SPCS.SI)
P/E 5.5, Yield 11%

3. Baytex Energy Trust (BTE)
p/e 5.3, yield 16%

And there are a few more others I found in this article: http://money.cnn.com/2009/01/20/magazines/fortune/okeefe_schiff_sidebar.fortune/index.htm

Now again I think time will tell if he was right or wrong per his famous youtube video “peter schiff was right” :) if you know what I mean.

Anyway this is besides the point for us, because I would consider us as DIY investors and not stock pickers so our problem still stays: are there any ETFs for dividend asian stocks maybe trading on asian exchanges?

I called questrade today and asked how we can buy such things. They said not directly online via the regular broker (which gives you access to canada+US as you know) but instead you need to call in their brokers and do it over the phone. It will be more expensive though I am sure. But don’t have a price as I didn’t actually bought one… because I haven’t found that ETF yet :)
Also I know that HSBC has a lot of exposure to asian markets and I saw on their broker website a section about it (http://www.investdirect.hsbc.ca/markets_and_research/en/global_trading.aspx) so maybe they might be cheaper for that comparing to calling in to questrade for example. But this should be looked into. For US+Canadians stocks though HSBC I found to be too costly…
One thing is sure, buying that piece of mind to get out of US currency is pretty expensive for us canadians and in the end one might ask himself if it’s worth it… as probably canada will go down the drain too if US does. Schiff was more optimistic about us having so many resources but you never know really.

I’ve been looking at dividend etfs as well and was deciding between VIG or SDY. Any comment on either and why they weren’t included on your list?

Thanks!

Vanguard also offers Dividend Appreciation ETF (VIG) with a .28% MER and a 3.04% yield. It tracks Mergents Broad Dividend Achievers index.

Why no mentioned of Vangaurd High Dividend Yield ETF (VYM)? It has a 5.11% yeild, is comprised of all US stocks, follows FTSE High Dividend Yield Index, and has a minute .25% MER.

thanks