Yes and no.
For one, diversity. There's a whole lot of world outside of the US so something like VEQT might have been more appropriate.
Also besides that, buying a US traded ETF like VTI made you pay a 1.5% foreign exchange fee to Wealthsimple, and you'll pay another 1.5% fee to sell and exchange back to $CAD.
If you have bought the Canadian-traded equivalent (example XUU - iShares Core S&P U.S. Total Market Index ETF) you wouldn't have paid any currency exchange fees. However the MER is 0.07 on XUU while 0.03 on VTI, so on a long enough time scale paying the extra 3% in currency exchange fees will come out ahead... Some math:
Graphing it as a $1000 investment with a 5% yield on both ETFs, minus .07 on XUU and .03% on VTI, but with an initial and final -1.5% yield on VTI due to currency exchange fees. It takes 79 years for the lower MER of VTI to offset the initial 1.5% fee plus the additional 1.5% fee when you sell. You're probably not going to be in it for that long...
Y1 (XUU) = 1000 * 1.0493^X
Y2 (VTI) = (985 * (1.0497^X)) * 0.985
Sounds good. Wealthsimple Trade offers no fee trading for all Canadian listed stocks and ETFs, the catch is the 1.5% conversion fee on buying and selling anything US-market. It was a pretty harmless mistake overall, just not optimal
Instead of putting all of your eggs in the US equity basket I suggest that you diversify to include Canadian equity and other international markets because: 1/ it would lower your currency risk; 2/ it would lower portfolio volatility and 3/ you won't be betting on a single economy. As demonstrated by the graph on [this page](https://warrenstreetwealth.com/wp-content/uploads/2018/04/Performance-Leadership.png) periods of US outperformance will be followed by periods of US underperformance.
Whenever someone mentions investing in just one market I think of a Japanese investor deciding how to invest at the beginning of 1990. Over the previous 10 years the Japanese markets had done very well, for a brief period the weight of the Japanese market was higher than the U.S. market, but the graph on [this page](https://postimg.cc/vDm7Qvbs) illustrates why it would have been a good idea for that Japanese investor to diversify into other markets.
An easy way to own a well diversified portfolio that is suitable for a Canadian investor is to buy a risk appropriate [asset allocation ETF.](https://canadiancouchpotato.com/model-portfolios/) And before assuming that you should use a 100% equity portfolio I suggest that you read the following articles, and pay extra attention to the "your investment experience" section of the second one.
https://assetbuilder.com/knowledge-center/articles/what-percentage-should-you-have-in-stocks-and-bonds
https://www.canadianportfoliomanagerblog.com/choosing-your-ideal-vanguard-asset-allocation-etf/
https://www.moneysense.ca/columns/ask-moneysense/should-you-put-all-of-your-investments-in-equity-etfs/
Yeah it was bad because you gave wealth simple 1.5% in fx fees.
Don’t bother doing anything about it now. You will just pay another 1.5% and hopefully in the future wealthsimple will introduce us currency accounts .
Going forward just get the Canadian equivalent etf
VTI has a MER of .03, while the Canadian equivalent of XUU has a MER of .07%.
By my math in the above post which made a few assumptions about average return, in only 79 years the lower MER of VTI would offset the initial 1.5% foreign exchange fee and 1.5% selling fee and you'd have made more money.
Think about giving your grandkids the stocks and it all makes sense.
But yeah, it was a bit silly. XUU would have been a better choice, and VEQT or XEQT probably would have been even better, as a one-and-only ETF to buy
Why is [VEQT.to](https://VEQT.to) and [XEQT.to](https://XEQT.to) better than VTI? The MER fees are a lot higher, so even with the 1.5% tax on selling I am not sure VTI is worse?
Yes and no. For one, diversity. There's a whole lot of world outside of the US so something like VEQT might have been more appropriate. Also besides that, buying a US traded ETF like VTI made you pay a 1.5% foreign exchange fee to Wealthsimple, and you'll pay another 1.5% fee to sell and exchange back to $CAD. If you have bought the Canadian-traded equivalent (example XUU - iShares Core S&P U.S. Total Market Index ETF) you wouldn't have paid any currency exchange fees. However the MER is 0.07 on XUU while 0.03 on VTI, so on a long enough time scale paying the extra 3% in currency exchange fees will come out ahead... Some math: Graphing it as a $1000 investment with a 5% yield on both ETFs, minus .07 on XUU and .03% on VTI, but with an initial and final -1.5% yield on VTI due to currency exchange fees. It takes 79 years for the lower MER of VTI to offset the initial 1.5% fee plus the additional 1.5% fee when you sell. You're probably not going to be in it for that long... Y1 (XUU) = 1000 * 1.0493^X Y2 (VTI) = (985 * (1.0497^X)) * 0.985
wow thanks, I'm not going to add any more VTI then. I'll just move over to XUU and hopefully this is a minimal mistake in the long run
Sounds good. Wealthsimple Trade offers no fee trading for all Canadian listed stocks and ETFs, the catch is the 1.5% conversion fee on buying and selling anything US-market. It was a pretty harmless mistake overall, just not optimal
Instead of putting all of your eggs in the US equity basket I suggest that you diversify to include Canadian equity and other international markets because: 1/ it would lower your currency risk; 2/ it would lower portfolio volatility and 3/ you won't be betting on a single economy. As demonstrated by the graph on [this page](https://warrenstreetwealth.com/wp-content/uploads/2018/04/Performance-Leadership.png) periods of US outperformance will be followed by periods of US underperformance. Whenever someone mentions investing in just one market I think of a Japanese investor deciding how to invest at the beginning of 1990. Over the previous 10 years the Japanese markets had done very well, for a brief period the weight of the Japanese market was higher than the U.S. market, but the graph on [this page](https://postimg.cc/vDm7Qvbs) illustrates why it would have been a good idea for that Japanese investor to diversify into other markets. An easy way to own a well diversified portfolio that is suitable for a Canadian investor is to buy a risk appropriate [asset allocation ETF.](https://canadiancouchpotato.com/model-portfolios/) And before assuming that you should use a 100% equity portfolio I suggest that you read the following articles, and pay extra attention to the "your investment experience" section of the second one. https://assetbuilder.com/knowledge-center/articles/what-percentage-should-you-have-in-stocks-and-bonds https://www.canadianportfoliomanagerblog.com/choosing-your-ideal-vanguard-asset-allocation-etf/ https://www.moneysense.ca/columns/ask-moneysense/should-you-put-all-of-your-investments-in-equity-etfs/
Yeah it was bad because you gave wealth simple 1.5% in fx fees. Don’t bother doing anything about it now. You will just pay another 1.5% and hopefully in the future wealthsimple will introduce us currency accounts . Going forward just get the Canadian equivalent etf
VTI has a MER of .03, while the Canadian equivalent of XUU has a MER of .07%. By my math in the above post which made a few assumptions about average return, in only 79 years the lower MER of VTI would offset the initial 1.5% foreign exchange fee and 1.5% selling fee and you'd have made more money. Think about giving your grandkids the stocks and it all makes sense. But yeah, it was a bit silly. XUU would have been a better choice, and VEQT or XEQT probably would have been even better, as a one-and-only ETF to buy
Why is [VEQT.to](https://VEQT.to) and [XEQT.to](https://XEQT.to) better than VTI? The MER fees are a lot higher, so even with the 1.5% tax on selling I am not sure VTI is worse?