HBP S&P/TSX 60 Index ETFHXT.TOCOMMENTMar 29, 2017Stock price when the opinion was issued
As of Jun 11, 2026. Market Open.
Any sale triggers either a capital loss or gain. It depends on the election you made with CRA on your exact tax treatment. Capital gains are the most efficient tax treatment.
Benefit of CRA and dividends only comes from Canadian companies. So, even if you have an ETF that pays a distribution that comes from European or American companies, that dividend is treated as income even though it comes through a Canadian ETF.
He very much likes the Global X series of corporate class ETFs. They give you broad exposure to markets but don't have those distributions, so they're a bit more tax-efficient. Now, there are some additional costs in there to create those structures. As well, it really depends on your tax rate whether they're a really big benefit to an individual. More benefit to those in higher tax brackets than in lower ones.
HXT-T vs. XIU-T. They have basically identical holding but one pays a dividend so has different tax treatment. He is indifferent. In a TFSA, there is no reason to not to use the XIU-T.
It tracks the same index as the XIU-T. There is a major difference in terms of structure. HXT-T is structured around a total return swap. This allows them to run it very cheaply (3 basis points). It does not pay a dividend and accrues the yield to the NAV. It is tax efficient compared to XIU-T.