2 US-Traded ETFs That Can Help Canadians Save Big Money!

There is a time and place for US-traded ETFs in the Canadian portfolio, and while it’s not the quickest or easiest way to gain broad exposure to a sector, theme, sector, index or international market, there are significant savings to be made (think expense ratios). Of course, such savings on ETF fees don’t mean much if you have to pay your bank or broker to exchange currencies, plus a 2% surcharge (use Norbert’s Gambit if you can)!

That’s why I’d say it’s worth going after US-traded ETFs, if it really makes sense. Maybe you want to avoid US dividend taxes with an RRSP, or you want exposure to the most opportunistic sector in the market, or you want to bet on an active ETF from a star manager you deeply respect. Whatever the reason, it’s worth exploring what else is out there in the ETF markets.

As a Canadian, if you broaden your horizons, you can pay dividends not only in stocks, but also in ETFs. And when it comes to very specific ETFs, I think it makes sense to consider what’s traded on the NYSEARCA or Nasdaq exchanges. If you have access to the US stock exchanges, you virtually have access to a world of investments that span the globe, given the ETFs that allow you to bet on countless markets around the world.

However, in this piece we focus on cutting costs. And of course, we don’t charge currency fees when you exchange your Canadian dollars! So if you can minimize your FX costs (preferably to zero), the following US-traded ETFs are worth looking at for their low expense ratios (or fees).

Invesco QQQ Trust ETF

Firstly, we have the Invesco Nasdaq 100 ETF (NASDAQ:QQQM), which trades on the Nasdaq stock exchange. It’s a bet on the Nasdaq 100 Index at the absolute lowest price with a net expense ratio of 0.15%. Of course, there are more convenient options on the TSX Index that allow you to stay in Canadian dollars.

But if for some reason you have a lot of US dollars and want to keep them in dollars, the QQQM stands out. With shockwaves working their way through technology, the QQQM has been a choppy ride, and while there is a chance of a technical glitch, I think the tech-heavy index is worth keeping a close eye on.

SPDR Gold Mini Stocks

It can be expensive to bet on gold, especially if you want to secure physical bullion. Of course, gold ETFs can also cost quite a bit, especially when it comes to Canadian gold ETFs. In any case the SPDR Gold Mini Stocks (NYSEMKT:GLDM) stands out as one of my favorite ways to bet on gold while minimizing costs.

Whether you pay 0.4% or closer to 0.6% in MERs for your gold ETF, the GLDM really shines as a money saver on a relative basis, with a gross expense ratio of just 0.1%. That is indeed a new low!

That’s shockingly low for a gold ETF. And while there are notable differences between GLDM and some of its more expensive counterparts (think liquidity, the custodian, fees, CEFs versus ETFs and the like), I think the GLDM is a name that is a perfect fit for a Canadian investor who wants gold on the USD side of their portfolios with a very low expense ratio.

A few basis points saved over the years can be a big deal. And that’s why investors need to stay on top of MERs (or net expense ratios in the US) and how they change over time!