Must pay, but must pay less: Saving taxes for your ETFs
Hey mooers! ![]()
Tax efficiency is crucial for smart investing in Canada. This guide will show you how to use Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP) to get tax benefits and choose the best ETFs for these accounts.
Understanding ETF Tax Impacts
Many investors focus on fees when choosing an ETF, but tax efficiency is often overlooked. However, taxes can impact returns more than fees. Morningstar research shows that tax drag can significantly lower investment returns, as seen in the chart below.
Therefore, it is crucial to find a better way to save taxes for your ETF investment/trading. ![]()
Now you have got a great pair of "scissors". ![]()
You can cut off some taxes in your future investment and trading. ![]()
Seems that more profits are saying hi to you! ![]()
Now, what to buy?![]()
Since August, weaker U.S. employment and slowing inflation have increasingly convinced markets that the Federal Reserve might cut rates. By September 2nd, the yield on 10-year U.S. Treasury bonds had fallen 62 basis points from early July to 3.862%.![]()
This drop is largely tied to disappointing July non-farm employment figures, where the unemployment rate climbed to 4.3%, and a deceleration in inflation, with July's CPI rising 2.9% and core CPI up 3.2% year-on-year, both slightly down by 0.1 percentage points from earlier figures. Read more>>
At this time, it's probably good to look at U.S. Treasury bonds and the related ETFs. For detailed strategy and items to invest in, check this out!
We also have great readings that you can check:
In moomoo we also prepared this theme related ETF for you. Just click our "Investment Themes" function and the U.S. Treasury Bond ETFs section in it.
And for investors who want to be more cautious and long-term, maybe you could eye on the Fed rate cut in September. It might shape the future of the global economy for a long period of time (or not? It's up to discussion, mooers). ![]()
And we have collected all related information for you in our past post as well: ![]()
To make a well informed and personalized decision tailored just for you, you can try our ETF Screener function to make your own long-term planning!
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Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Bobbyjee : as agreed, we must pay taxes, however to utilize available tools to minimize tax impact and greater investment growth. this is a win win if we pay less taxes and fees. using the Registrred saving plans, this goal can be achieved however it is important to see the structure of the ETFs built in the investment to ensure CAD investor gets a lesser impact on dividends.
BearWithTheBull : "Taxes! " growls the Bear! "Taxes!" snorts the Bull!
john song : k
73279472 : hi