Buying China ETFs in Canada: Is it worth it? + MORE Dec 16th

Savings comparison tool

Find the best and most up-to-date savings rates in Canada using the comparison tool below. Plus, use the filters to assess your estimated return based on the size of your balance.

Why trust us

MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners.

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Best high-interest savings account rates in Canada

Generally, savings accounts offer very low interest rates. So, if you want to earn on your deposits (rather than simply using your account as a temporary “holding tank” or directing to longer-term saving and investing vehicles), a savings account with a high interest rate is a no-brainer…

U.S. stock market valuations are the fifth most expensive worldwide, currently trading at 23.79 times forward earnings, according to FinViz. That means investors are paying $23.79 for every dollar of projected earnings—a steep premium compared to historical averages. In contrast, Chinese equities might catch your eye.

China stocks are ranked 22nd on the global scale, with a forward price-to-earnings (P/E) multiple of just 10.85. The appeal of buying into this valuation gap is obvious, especially for those seeking growth potential and global diversification. 

As a Canadian investor, you’ve probably come across several exchange-traded funds (ETFs) on the Toronto Stock Exchange offering exposure to Chinese equities. But before you rush to buy, it’s worth hitting the pause button.

Here’s my take on why Canadian-listed Chinese equity ETFs may or may not be worth it. 

Tools

MoneySense’s ETF Screener Tool

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The double whammy of foreign withholding tax

Some Canadian-listed Chinese equity ETFs are shockingly tax-inefficient…

Ask MoneySense
I own a corporation (100%), and it has some money in it. I also own my house, which is fully paid up. 

Can I, with my corporation’s money, buy my own house—essentially to take out money tax free—to then rent the house to myself at a fair market value?

—Parmod

Transfer a principal residence to a Canadian corporation

In Canada, you can transfer an asset into your corporation, including cash, investments and real estate. You can even move assets that have deferred capital gains and continue to defer the tax. That’s what’s called a “section 85 rollover.” 

In your case, though, Parmod, there’s no tax to transfer your home to your corporation assuming it qualifies as your principal residence for all years of ownership. The real question is: should you?

Also read

Self-employed? How to file your taxes

read now

Personally using a corporate asset

As you’ve noted, you may need to pay rent to the corporation after the transfer…

GIC comparison tool

Find the best and most up-to-date GIC rates in Canada using the comparison tool below. Plus, use the filters to assess your estimated rate of return based on the size of your balance.

Why trust us

MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners.

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Highest GIC rates in Canada

Banks, credit unions, trust companies and discount brokerages all offer GICs. Below, you’ll find the best rates available from a variety of financial institutions, including credit unions and Canada’s Big Six banks. The rates listed are for non-redeemable GICs held in non-registered accounts—the most popular type of GIC in Canada…