![]() ![]() does not provide investment advice or recommendations regarding the purchase or sale of any securities. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. and Royal Bank of Canada are separate corporate entities which are affiliated. Please consult with your own professional advisor to discuss your specific financial and tax needs. The information provided in this article is for general purposes only and does not constitute personal financial advice. Therefore, foreign withholding taxes may apply to distributions from foreign securities, including ETFs, stocks and bonds when held in a TFSA. This is in contrast to RRSPs which may be exempt from foreign withholding taxes if the tax treaty between Canada and the foreign country allows the withholding tax exemption. If you are receiving dividends 1, interest, or other ordinary income from your ETF, that would also be considered taxable income to report on your income tax return.Īlthough a TFSA is a registered account providing the account holder with tax free income and capital gains for Canadian income tax purposes, a TFSA is not exempt from foreign withholding taxes. If you realize a capital gain when you sell your ETF, or if the ETF distributes capital gains at year end, you will have received taxable capital gains that must be included in your total taxable income. ![]() Since ETFs trade like stocks on an exchange, they are subject to commission when bought and sold. It represents the costs shareholders paid for the fund's management and distribution over the past fiscal year, including custodian and valuation agents, registrar and transfer agents, and any other service providers retained by the manager. This fee forms the largest portion of the MER. This is an annual fee payable by the fund to the manager of the fund for acting as its trustee and manager. A fund's prospectus will offer more information. The MER doesn't include sales commissions you may pay, or the fund's trading costs. Operating expenses can cover items such as fund valuation costs, audit and legal fees and costs related to prospectuses and annual reports. Expressed as a percentage of assets under management (AUM), it captures the management fee, operating expenses and taxes incurred by a fund on an annual basis. MER, also known as the expense ratio, is the annual fee that all funds charge shareholders for holding the fund. Passively managed funds generally have lower fees than actively managed funds. This is typically expressed as a management expense ratio, or MER. Largely, that comes in the form of management expenses, which apply to ETFs.īoth passively and actively managed ETFs incur management expenses. While ETFs trade like stocks, there are some differences when it comes to fees.
0 Comments
Leave a Reply. |