ReportWire

Tag: investment fees

  • How to read your investment statements  – MoneySense

    [ad_1]

    This guide breaks down exactly what to look for so you can quickly assess your investments and make informed decisions.

    Why review your investment statement? 

    Regularly reviewing your investment statement allows you to: 

    • Confirm that transactions are accurate
    • See whether your portfolio value is performing as expected
    • Understand what you own and how much it’s worth
    • Make sure your investments align with your goals and risk tolerance

    Developing the habit of looking at your statement helps reduce uncertainty, strengthens your financial awareness, and ensures there are no surprises down the road. 

    Compare the best TFSA rates in Canada

    Why investment statements are often overlooked 

    Investment statements often go unread because they can seem long and complicated. The numbers and financial terms are not always easy to make sense of, which can make the whole document feel intimidating. Some common challenges include: 

    • Too much information: With multiple pages of data in fine print, it is hard to know where to start and what to look at.
    • Not sure what matters: Certain sections are more important than others, but that isn’t always clear. 
    • Mixing up values: The difference between book value and market value is often assumed to be the return, which is not always correct. 

    Once you know what to focus on, the statement becomes much easier to read. Instead of feeling stressed, it can be a helpful tool to check your progress and confirm your investments are on track. 

    Reviewing an investment statement doesn’t need to take much time. By focusing on a few key areas—like total value, transactions, and performance—you can quickly gain a clear understanding of how your portfolio is doing.  

    Treating this as a regular financial check-in, much like reviewing a budget or tracking monthly expenses, helps build familiarity and confidence. Over time, the process becomes easier, and what once felt complicated turns into a simple habit that keeps you feeling in control. 

    Think of it as a monthly check-in with your future self. The more familiar you become with your statements, the easier and more natural the process will feel. 

    Article Continues Below Advertisement


    Key areas to focus on 

    When you start reviewing your statement, here’s where to direct your attention.

    1. Total portfolio value 

    Start with the big picture. Look at the total value of your portfolio and compare it with the previous month’s figure. This indicates whether the overall value has increased or decreased. While market changes are normal, this quick comparison helps you track your progress over time. 

    2. Transactions 

    Next, review the activity in your account. Did you make a deposit or a withdrawal? Did you purchase a new investment? What fees were charged? 

    Every transaction should line up with your expectations. If you notice something that doesn’t make sense or if a transaction appears to be missing, it’s important to follow up with your financial advisor. 

    3. Portfolio holdings 

    The holdings section shows what you own and the value associated with each investment. Here, you’ll typically see: 

    • Book value: Also referred to as “adjusted cost base” or “ACB” is the price you paid for the investment, adjusted for tax purposes to reflect any dividends reinvested or other cost adjustments to ensure you don’t double pay taxes when you sell. 
    • Market value: What that investment is worth today if you were to sell it. 

    It’s important to know that the difference between book value and market value doesn’t always show your real return. For example, if dividends are automatically reinvested back into an investment, your book value goes up even though you didn’t put in extra money yourself. 

    4. Asset allocation 

    Your statement will also display your allocation to categories such as stocks, bonds, and cash. This breakdown should reflect your risk tolerance and long-term goals. If your allocation has shifted significantly due to market performance, it may be time to rebalance to get back on track. 

    5. Performance and fees 

    Finally, look at your overall performance and the fees charged. Some statements include your rate of return, though not all do. If yours does not, you can request a performance summary from your advisor. 

    [ad_2]

    Sybil Verch

    Source link

  • What happens when you can’t manage your investments anymore? – MoneySense

    What happens when you can’t manage your investments anymore? – MoneySense

    [ad_1]

    I try to picture 84-year-old me being told by my kids that it is time to hire a financial planner. I may not be so keen myself when the time comes. Maybe I should bookmark this column.

    I took over the management of my mother’s finances toward the end of her life. She seemed reluctant, but she knew it was time. I think she still saw me as her little boy even though thousands of clients and readers looked to me for advice that she was hesitant to take.

    Managing your own investments to save on fees

    If you expect to pay $35,000 a year on fees to invest in mutual funds, Laasya, I am speculating here, but you probably have somewhere between $1.5 million and $2 million of investments. Mutual fund management expense ratios (MERs) are embedded fees that are paid from the fund’s returns each year. They are about 2% on average but can range from under 0.5% for low-cost, passive index funds to 3% or more for segregated funds from insurance companies.

    If you have $1 million or more to invest, there are discretionary portfolio managers who use stocks and bonds or proprietary pooled funds who may charge 1% or less of your portfolio value. (Discretionary means the portfolio manager makes buy and sell decisions on your behalf.)

    You could certainly invest in exchange-traded funds (ETFs), and now there are plenty of simple asset-allocation ETFs (also known as all-in-one ETFs) that can be a one-stop shop for investors. Fees are in the 0.25% range.

    Why self-directed investing may not be the answer

    The problem with buying an ETF, Laasya, is that your kids are concerned about you investing on your own. And if they wanted to be self-directed investors, they probably would have offered to help you manage your investments. They did not. So, if you pull your investments to manage them yourself again, you may be putting your kids in an uncomfortable position, as they may potentially have to become DIY investors at some point if you’re unable to manage your own investments.

    Self-directed investing may seem easy to people who are comfortable doing it. But I remain convinced that some people will never be able to manage their own investments, no matter how simple it becomes.

    Have you considered a robo-advisor?

    I often joke with my wife that I am very good at a short list of things in the financial planning realm, but not much else. There are plenty of things that I could probably learn to do around my house or in other aspects of life that I have no interest in learning. I would rather pay an expert.

    [ad_2]

    Jason Heath, CFP

    Source link

  • Robo-advisor or all-in-one ETF: which is best for new investors? – MoneySense

    Robo-advisor or all-in-one ETF: which is best for new investors? – MoneySense

    [ad_1]

    In my opinion, the best thing about the evolution of the investment industry is a (slight) increase in transparency. There is a long way to go, and consumers are still disadvantaged in a lot of ways, but we are making progress.

    I am also of the opinion that not everyone should be a self-directed investor. Sure, it can be relatively easy, but having worked directly with thousands of clients during my career, I can also say that does not matter to some people who would never think of pressing the buy and sell button themselves. 

    Investment professionals are better off working with clients who do not want to micromanage them. Conversely, investors who want to take control of their own portfolios have lots of tools at their disposal. I like to see everyone investing in the way most suited to their situation. Below, I explore two important innovations that have appeared over the past decade that can lower the cost of managing an investment portfolio for retail investors.

    How ETFs changed the game

    The first Canadian mutual fund was introduced in 1932, but it was not until the past 40 years that they became mainstream. The past 10 years have started to show a shift in demand from investors to exchange-traded funds (ETFs), but mutual fund assets still dwarf that of ETFs. In fact, though the ETF market is growing faster, the mutual fund market in Canada is still about five times bigger (about $2 trillion compared to about $400 billion).

    An investor can build an ETF portfolio using individual components like a Canadian stock ETF, a U.S. stock ETF, a global stock ETF, and a bond ETF. They can buy ETFs that track stock market sectors and complement these ETFs with individual stocks.

    There are over 1,100 ETFs in Canada with 40 fund sponsors and easy access to thousands of U.S.-listed ETFs as well.

    The selection is enough to make your head spin and almost necessitates the use of an advisor to wade through the options. More and more advisors are using ETFs throughout their client portfolios, but a new class of ETFs may be better suited to self-directed investors. 

    How to invest using all-in-one ETFs

    Enter stage left the all-in-one exchange-traded fund, also known as asset-allocation or one-click ETF. The idea is simple: choose a single ETF that gives you access to all the asset classes an investor might need in a single product.

    [ad_2]

    Jason Heath, CFP

    Source link

  • How to change a past tax return – MoneySense

    How to change a past tax return – MoneySense

    [ad_1]

    According to the Canada Revenue Agency (CRA), two types of fees are eligible to deduct:

    1. “fees to manage or take care of your investments,”
    2. and “fees, other than commissions, paid for advice on buying or selling a specific share or security by the taxpayer or for the administration or the management of the shares or securities of the taxpayer.”

    So, the second one would generally include a management fee paid as a percentage of your investment account, but not commissions or mutual fund management expense ratios (MERs).

    In addition, the fees must be paid to a person or a company whose “principal business is advising others whether to buy or sell specific shares or whose principal business includes the administration or management of shares or securities,” according to the CRA.

    Can you claim a past expense on your current year’s tax return?

    You generally cannot claim a receipt from a previous year on a current tax filing, Ian—at least not directly. It should be claimed for the year in which it was incurred.

    There are some deductions and/or credits that can be carried forward after reporting them in the correct year to claim in a future year, like donations or capital losses, but these claims should still be reported for the year they arise.

    How to amend a previous tax return

    There are three ways you can adjust a previous tax return you filed.

    1. Submit a T1-ADJ, T1 Adjustment Request to the CRA. This can be done using commercial tax software, or by mailing the form and supporting documents to the CRA tax centre that serves your area.
    2. Send a letter signed by you to your tax centre requesting the adjustment.
    3. Log into My Account, the CRA’s secure online service, and use the “change my return” option.

    How many years back can you go to change your tax return?

    The CRA will generally accept an adjustment request for any of the previous 10 calendar years, Ian. For example, in 2024, you can request adjustments to your tax returns as far back as 2014.

    The CRA may accept an adjustment to an earlier tax return, but you must submit the request in writing. (Read: Can you file multiple years of income taxes together in Canada?)

    [ad_2]

    Jason Heath, CFP

    Source link

  • Webull Canada Review 2024 – MoneySense

    Webull Canada Review 2024 – MoneySense

    [ad_1]

    Is Webull available in Canada? 

    Yes. Webull Corporation, a popular Cayman Islands-owned and -operated digital brokerage, opened for business in Canada in January 2024. Prospective clients are invited to join a waitlist to set up an account at webull.ca. Like some other providers, Webull uses a waitlist to manage the pace of new client onboarding and avoid glitches. Generally after two business days, you can access the app and website with your account.

    Can you use Webull in Canada?

    The big difference between Webull Canada and the Webull version in the U.S., where it’s been operating since 2018, is the commission structure. Whereas basic trades in the U.S. are free, Webull Canada will charge $2.99 per trade for Canadian-listed stocks and USD$2.99 for stocks listed on American exchanges following a 90-day commission-free period for new clients. 

    “Canada, as a whole, is… more expensive (in the broker/dealer world) in terms of costs and fees to do business than the U.S.,” explains Michael Constantino, CEO of Webull Securities (Canada) Limited. He also noted that Webull charges commissions in most of the countries where it operates. Still, the commissions were a disappointment to a lot of Canadian investors commenting on Reddit. 

    Webull desktop vs. Webull app

    Webull has a phone app you can download via Apple’s App Store and Google Play, and the login process is easy. You get the sense it’s geared for wireless generally. You can also access your account by desktop, which boasts bigger, more readable graphics, but the pages can take a bit of time to load.

    Webull promises 24/7 support by email and phone.

    Webull trading

    Webull Canada only supports stock trading for now, not the award-winning options trading platform available stateside. (Also, cryptocurrency trading is available through a separate app called Webull Pay.) On the positive side, there are no charges for deposits and withdrawals from your Webull Canada account. The company’s clearing firm charges a fee for wire transfers, however. On margin accounts, it charges interest rates a tad below 10%.

    In addition to equity trading, Webull offers users real-time quotes and market data, more than 20 charting widgets and 60 indicators and paper trading for practice.

    Webull is a member of the Canadian Investor Protection Fund, meaning any cash or assets sitting in your account are insured in case the firm becomes insolvent.

    [ad_2]

    Michael McCullough

    Source link

  • How to buy Fidelity ETFs in Canada – MoneySense

    How to buy Fidelity ETFs in Canada – MoneySense

    [ad_1]

    ETFs may have lower management fees than comparable mutual funds. And, with such a wide variety of ETFs with different asset allocations to choose from—including funds that combine equities with fixed income and even cryptocurrency—there are ETFs for a range of investors, from conservative to aggressive. You can choose ETFs that try to replicate an entire stock index, such as the S&P 500, or focus on a specific sector or geographical region. Most ETFs are passively managed, but a growing number of funds are actively managed.

    Plus, you can hold ETFs in both non-registered and registered investment accounts. Examples of registered accounts include the registered retirement savings plan (RRSP), tax-free savings account (TFSA) and first home savings account (FHSA).

    Investing in Fidelity ETFs

    In Canada, Fidelity Investments offers a variety of ETFs for investors with different investment objectives, time horizons and tolerance for risk. Investors can consider ETFs in the following categories:

    • Equity ETFs invest in stocks across a broad range of sectors, market capitalizations and geographies.
    • Fixed income ETFs invest in bonds and can be used to generate income, with the potential for capital preservation. 
    • Balanced or multi-asset ETFs invest across asset classes, including stocks and bonds.
    • A sustainable ETF that invests in companies with favourable environmental, social and governance characteristics.
    • Digital asset ETFs have direct exposure to cryptocurrency, such as bitcoin and ether.

    Fidelity ETFs are available through financial advisors and online brokerages. Learn more about Fidelity ETFs.

    Learn more about ETFs

    On this page, we’ll share articles to help you learn about and evaluate ETFs for your investment portfolio. Check back often for more insights.

    • How many ETFs can Canadian investors own?
      ETFs offer Canadian investors an appealing combination of convenience, diversification and low fees. But how many ETFs should you own, and which ones?
    • What investments can I put in my TFSA?
      The TFSA contribution limit for 2024 was recently announced. TFSAs can hold more than just cash. Get to know your TFSA investment options, including some Fidelity All-in-One ETFs that offer portfolio diversification.

    Know your investing terms

    Brush up on investing basics with helpful definitions from the MoneySense Glossary.

    This article is sponsored.

    This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers and approved by the client.

    Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual funds or ETF’s prospectus, which contains detailed investment information, before investing. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

    The statements contained herein are based on information believed to be reliable and are provided for information purposes only. Where such information is based in whole or in part on information provided by third parties, we cannot guarantee that it is accurate, complete or current at all times. It does not provide investment, tax or legal advice, and is not an offer or solicitation to buy. Graphs and charts are used for illustrative purposes only and do not reflect future values or returns on investment of any fund or portfolio. Particular investment strategies should be evaluated according to an investor’s investment objectives and tolerance for risk. Fidelity Investments Canada ULC and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.

    Portions © 2023 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC.

    The presenter is not registered with any securities commission and therefore cannot provide advice regarding securities.




    About Jaclyn Law

    Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities and freelancing for The Globe and Mail, Report on Business, Profit, Reader’s Digest and more. She completed the Canadian Securities Course in 2022.

    [ad_2]

    Jaclyn Law

    Source link

  • Taking an active approach to ETF investing in Canada – MoneySense

    Taking an active approach to ETF investing in Canada – MoneySense

    [ad_1]

    Although ETFs are often considered instruments for passive or index investing, actively managed ETFs are on the rise. If U.S. investment trends are a bellwether for what’s in store for Canada—and they often are—then active ETFs may have a bright future here.

    In the U.S., the share of ETF inflows that went to active ETFs in the first half of 2023 was about 30%, more than double the amount for all of 2022. A decade ago, active ETFs accounted for just 2.3% of fund inflows. How does the growth of active ETFs compare to that of passive ETFs? In the first half of 2023, passive ETFs grew at an organic rate of 3%, while active ETFs grew much quicker, at a rate of 14%. They’re gaining popularity in other global markets, as well. In Asia, active ETFs grew 78% in the first half of this year.

    Clearly, active ETFs are also attracting a lot of interest from investors. But how do active ETFs work, are they right for you, and how can you buy these ETFs in Canada for your registered retirement savings plan (RRSP)?

    The benefits of active ETFs

    In the investment world, there’s plenty of debate over which management style—active or passive—is better for investors, but both have their merits. If active ETFs fit your investment objective, time horizon and strategy, they could offer you the following benefits:

    1. Opportunity to invest in specific strategies: Active funds could offer investors a convenient way to invest in a certain sector or implement a particular investment strategy. While this can be achieved with passive ETFs too, the active ETF option could be used by investors who want to try to outperform the index in a particular sector.
    2. Possibility of outperforming the market: Although passive ETFs typically have lower fees than active ones, some investors are unsatisfied with simply getting market exposure; they want to outperform the market, which is primarily what active ETFs try to do.
    3. Easy to buy and sell: ETFs offer greater flexibility of trading intraday than mutual funds. You can buy and sell ETFs on a stock exchange anytime during trading hours. Also, unlike mutual funds, you’ll know the purchase or sale price of the ETF units when you place the order.
    4. Downside protection: Active ETF managers can prepare for or react to market events, including corrections and crashes. Unlike with an index fund, which mimics what the index itself does, the manager of an active ETF may increase their cash or fixed-income holdings in anticipation of a market downturn. In doing so, they attempt to limit their investments’ decline in value.

    Because of the above features, active ETFs could be the “core” portion of an investment portfolio (and, if held inside a registered account such as an RRSP, your investments can grow on a tax-deferred basis). Active ETFs could also form part of a “core and explore” portfolio in which passive ETFs could be the core. As the “explore” part of the strategy, active ETFs could be used to explore a particular sector or to attempt to outperform a market index.

    How to buy Fidelity Active ETFs

    If you decide that active ETFs are suited to your portfolio and investment style, there are two ways to access them.

    • A financial advisor: Financial advisors can access Fidelity’s ETFs and add them to their clients’ investment portfolios. A financial advisor can help you decide whether active ETFs are a good fit for your portfolio, which one(s) to buy and how much to invest.
    • An online brokerage: For self-directed investors who don’t work with an advisor, Fidelity’s ETFs are available through most online brokerages (also known as “discount”  brokerages). When logged in to your online brokerage account, search for the ticker symbol of the ETF you’re searching for—as you would search for a stock.

    In investing, one size doesn’t fit all. While some investors may prefer a passive-only portfolio of ETFs, others may want to implement specific strategies with the potential for higher returns. Also, many investors do both—hold passive ETFs as well as experiment with active options.

    Learn more about Fidelity Active ETFs.

    [ad_2]

    Aditya Nain

    Source link