Cost Versus Convenience in “ex Canada” ETFs + MORE Jun 20th

The skyline of Singapore’s central business district is seen at dusk as operations continue at a PSA International port terminal in Singapore REUTERS/Edgar Su/File Photo
Most discussions about attracting foreign investment to Canada quickly focus on the size of incentives offered by governments and whether they are a good deal for taxpayers. But the reality is that incentives to companies are only one part of a larger strategy. Executing an effective strategy–playing the “long game”—is how best-practice jurisdictions succeed in the face of tough international competition. New research by Ivey’s David Moloney and Sandra Octaviani looks how these best-practice jurisdictions approach investment attraction and develops some important lessons for Canada.
The investment attraction stars that the researchers looked at included Mexico, Hong Kong, Singapore, the U.S. and Utah.  Like Canada, Mexico and the U.S. are federal states and therefore have the added complication of both federal and state governments working simultaneously to attract foreign investment…

The IEX Group won approval from the U.S. Securities and Exchange Commission on Friday to become a national stock exchange, following months of arguments with hedge funds and high-speed traders.

I used to own one of those one-piece cutlery tools designed for hiking and camping—the kind with a knife, fork and spoon that all fold into a single unit. It was hardly ideal for eating, especially if you needed the fork and knife at the same time. But it was more convenient than trekking around with three individual pieces of flatware that might tear your pack or get left behind on the trail.
As investors we often make similar trade-offs. Consider the Vanguard FTSE Global All Cap ex Canada (VXC) or the iShares Core MSCI All Country World ex Canada (XAW), which both offer one-stop global diversification by holding thousands of US, international and emerging market stocks. But as with folding cutlery, you give up something to get that convenience. These two “ex Canada” funds get at least some of their exposure by holding underlying US-listed ETFs rather than holding their stocks directly. This structure can result in additional foreign withholding taxes on dividends.
In a recent blog post, Justin Bender estimated the impact of foreign withholding taxes on RRSP investors who hold VXC…

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Oil sands producer bolsters finances by selling royalty stake to Burgess Energy Holdings for $129-million