iShares S&P 500 Index ETF (XUS-T)

Buy a hedged ETF when Canadian dollar is lower? Currency decisions are an active part of their process, they are active on currency decisions, and then they use passive ETFs. Not hedged on anything right now. Canadian dollar is stuck in a range between 0.75 and 0.77 cents. Doesn’t think Canada will raise interest rates as fast as US, which means the Canadian dollar will come under pressure. If you are buying S&P now, you are buying it for a long-term portfolio with 2-5 years horizon, because in the near term you are probably not going to get much out of it. XSP is currency hedged. XUS is not currency hedged, and it’s his ETF of choice in the US. XSP should be in a portfolio and replace big US stocks. His opinion is to don’t edge it. XUS definitively affordable at 0.10% MER. You have to really watch the underlying costs when putting an ETF in your portfolio.

HXS-T vs. XUS-T vs. VUN-T. HXF is the financial swap based ETF and the swap fee has a fee of zero. It is Canadian bank that is doing the swaps. When you sell it down the line you will have compounded the yield. There are reasons to buy into Canadian financials at this time. HXF is a good idea.

You are basically buying the S&P 500, so it is just an index fund. He would be more inclined to buy SPDR S&P 500 (SPY-N) because it is cheaper. If you believe that the US market is going to be stronger next year, then by all means this would be good. This is always a good core holding.

For a long-term investment, iShares Core S&P US Total Market (XUU-T) or iShares S&P 500 Index (XUS-T)? This has largely been a large cap recovery. He also likes the mid-caps. As the US recovery continues, that benefit is going to spread to the smaller caps. Right now he likes the US version. Just coming out of their recovery, he would be more going into the large caps as he has done in the past. However, he is fine with these.

Hedged or Unhedged? Now that the Cdn$ has come down a bit, there is an opportunity to be playing a little bit of both. An interesting product is the iShares S&P 500 Index ETF (XUS-T) which, when you buy, you are still getting US$’s but you are not getting hit on the currency conversion when you are moving it from one account to the US account, so it stays in your Cdn$ account. This would be a good one to have, especially for people that are trading a fair bit.