Buying US Mutual Funds from Canada - II
How is your deal with waterhouse coming along? I plan to do the same, any further words of wisdom??
Don't know if this qualifies as "wisdom," but here's some status:
Bylo,I'm sure that you know that the Vanguard Value Index Fund tracks the S&P500/BARRA Value Index.You can see the historical returns of the various BARRA indices at the following website:
You can also catch the action in slo-mo on the Yahoo VIVAX channel.
Rick and Bylo, you may want to visit, every second Friday, the Committment of Traders Report at http://www.fundlibrary.com/thread.cfm?threadid=7002&messages=7 for the S&P 500 BARRA VALUE INDEX COT. It pays to know what the Pros are doing. Long term they are NEVER wrong.
Ralph,thanks for the COT reference.You lost the link in your copy/paste attempt so I'll repeat it below:
Rick, I still can't figure out what i did to mess up my message however here is the correct URL http://www.cftc.gov/dea/cot.html (go to Chicago Mercantile Exchange for the S&P 500 BARRA VALUE INDEX COT). It must have been the coffee... Thanks for the reference to Silicon Investor.
Actually I am in the process of opening an account. I should receive the waterhouse package this week.
Note: BRK.B is berkshire hathaway , n'est pas ??
Sorry,the above site is a very good discussion forum on COT.
The COT reports can be found at:
Thanks Ralph,I've found the specific info on the S&P 500 BARRA VALUE INDEX COT...now I'll have to figure out what it all means!!!
Yes, BRK.B is Berkshire Hathaway class B shares, currently about US$1,618 each. BRK.A is class A shares at a mere US$48,400 each. BTW, 30 Bs = 1 eh?
Ralph & Rick,
That futures and options rocket science stuff is too high falutin for me. I may regret asking this, but please explain what I should be watching out for.
Do you have a poiter to performance of the BRK.B shares versus the S&P 500 for example?? What is the the minimum number of shares that can be bought (given that one shares come cheap at 1600 US + !!)
Roughly (very!) speaking, over the past decade the S&P500 went up in value about 5 times. Shares of BRK.A went up in value 11-18 times.
BRK data came from Waterhouse's website (you have to be a client to get free S&P reports) which indicates that in 1987 the share price varied from a low of $2,635 (48000/2635 ~= 18) to a high of $4,290 (48000/4270 ~= 11.)
The S&P500 data came from the BARRA website that Rick referenced above. It shows a 10 year CAR of 18.05%.
As far as I know, you can buy as few as one BRK.B share at a time from Waterhouse for a flat US$12 fee providing you do it online.
Ok Thanks Bylo, the information is much appreciated.
Bylo, I just read your comments. I have to go out for the evening now, but if Rick does not reply to you tonight I will get back to you tomorrow.
BYLO WOULD BE INTERESTED IN YOUR OPINION OF CANADA TRUST EVEREST BALANCED FUND . SERIOUSLY THINKING OF DUMPING IT AND PICKING UP PH&N BALANCED OR PERHAPS BISSETT RETIREMENT.
although i do all my banking at ct, i don't have any of there mfs. never been impressed by their funds' performance or mers.
I have another question pls..
Waterhouse Securities is in NYC. Does the choice of discount broker (and the state they're in) affect the tax rates ?? I mean perhaps there is another office in a different state that will have a more advantageous accounting.
Another thing I would like to ask. Does Vanguard mail you their statements ?? Or you receive statements only from the broker.
Thanks again for your help, Regards, -investor-
Re tax. As I understand it this is only a federal issue. When you open an account with a US broker you should include an IRS W-8 form to declare yourself a non-resident foreigner. They'll still deduct a 15% withholding tax on dividends and income, but it's a credit on your Canadian tax return. At yearend you'll still get the US equivalent of a T-3 and you still have to pay regular Canadian taxes on this income, but at least you're not double-taxed.
Waterhouse have numerous branch offices around the US. When they opened my account they automatically assigned me to their Detroit (not Buffalo?) office. I've even got an official account rep there, although I've never had contact with him.
Re Vanguard. Vanguard's ambiguous answer to my e-mail question about this a while ago: "At present, we will only mail prospectuses and other information to U.S. addresses, and we will only accept new account requests which contain a U.S. address." Perhaps Rick can comment.
-investor- and Bylo:
Your Vanguard mutual fund holdings are held in Waterhouse's street name.Therefore,you will receive only the broker statements.The same thing occurs when you hold mutual funds in your Greenline or Action Direct account.
Thanks Rick and Bylo for the info,
the closest waterhouse office is in Syracuse for me (I am in Ottawa). But I do think it is a good idea to meet the rep so that in case there are issues to resolve, there is somebody to call. Perhaps my wife and I will drive down there sometime in the spring (but that will be well after I have opened the account and made purchases.)
Rick, are you involved in a similar situation (buying US securities or MFs that are inaccessible in Canada ??). Care to tell us a bit about your experience ??
Thanks and regards, -investor-
I'm a tad confused (yeah, so what else is new?).
I currently have both registered and non-registered accounts with TD GL. These accounts hold both stocks and MFs. Presumably all of these are held on my behalf in TD's street name. Yet I still receive annual reports, proxies (stocks), statements (MFs) directly from the corporations and MF companies, although often they show the owner as "Investor Company" rather than me.
Why would my owning US stocks and MFs through Waterhouse be any different, i.e. why wouldn't I receive annual reports, proxies (stocks), statements (MFs) directly from the corporations and MF companies? Do the companies filter out non-US addresses due to SEC regulations?
Bylo, the Commitment of Traders Report is a very useful tool to use to identify what the Commercials (Holders of a large number of contracts) are doing. For the S&P 500 BARRA Value Index (as of 01/13/98) you will read in the first line that Non Commercial Positions are 50 Long and 367 Short, while the Commercial Positions are 1548 Long and 1321 Short. The second line will give you the changes from the previous two weeks. These changes, if substantial should indicate a change in sentiment of both groups. COT report is made publicly available at 3.30pm on the Friday following the release of the data (every second Tuesday). The well financed participants normally represent the commercials and their action in futures markets tells us what the smart money thinks it's fair value. The commercials can assess the supply/demand picture in ways impossible to non commercials (the speculators) and are in the market for hedging purposes only. If they short the futures, they own the cash equivalent. The COT shows how these knowledgeable investors are positioning themselves in relation to the market and by watching what they do we can anticipate major market turning points. If you go to the Silver COT for the same period you will discover that Commercials are betting 4 to 1 that silver prices will be lower in the future while speculators are betting 6 to 1 that prices will be higher. This situation is extreme and even if it will not preclude silver to rally short term, it will put a definite cap on the move.
Bylo,you may or may not recall,when you completed your Greenline application form,there was a page and a half dealing with shareholder communication ---pages 3 and 4 of the RRSP account application. Even though you are a "non-registered security holder",if you choose, you have the right under Canadian securities legislation to receive notices of meetings proxies,annual statements,etc. in respect of securities that you own.You have obviously chosen this option.
With Greenline most of this info is now distributed by Greenline through a clearing house ---you may have noticed this change last year when most of your annual meeting info started to arrive in the same type of envelope,and the proxy labels were enclosed.However,I believe that Greenline still gives your name and address to some companies to deal with you directly.The only mutual fund that I still hold through Greenlie is an Atlas fund and I get the semm-annual and annual repot directly from Atlas.But I don't get any statements from Atlas.Do you get statements from other fund companies that you hold through Greenline?
In para 14 of the Waterhouse Customer Agreement the issue is dealt with as follows:
SEC Rule 14b-1(c)-Communications Between Companies and Shareholders - You will release my name, address and security positions to requesting companies in which I own shares that are held in my account,unless I notify you in writing that I object.
I don't know if this U.S. rule applies to mutual fund unitholders.But from e-mail correspondence I have had with Janus Funds,they will not mail anything to a Canadian address.So I don't expect to receive anything info directly from Janus unless I give Waterhouse a Canadian mailing address for my account with them.On the other hand,Waterhouse seems to have no difficulty communicating with me at a Canadian address.My response from Janus was very similar to your response from Vanguard,except that Janus went further and gave me the address of the Ontario Securities Commission to voice my dissatisfaction at not being able to buy Janus Funds.I chose to let sleeping dogs lie,and bought through Waterhouse.
Incidentally,its relatively easy to overcome the problem if you live near the U.S. border (eg. Lewiston,N.Y.).You simply rent a post office box and visit periodically to clear it out.
Thanks -- I think :-)
Thanks also. Your TD explanation agreees with my experience. FWIW I get statements from 3 of the 4 MF companies that I have through TD.
Yes, I saw the SEC stuff on the Waterhouse application and assumed it was equivalent to Canadian rules. It is less important for me to receive (duplicate) statements from Vanguard, but it would be nice to receive their newsletters, etc. They are available on the web, though apparently only after the printed vesions are sent.
Re US postal addresses, not surprisingly there are companies that will clear and forward such mail back to Canada.
Bylo, the historical record is heavily in favour of commercials. I never bet against them when they are heavily short or long. I have been watching the CTO for twenty years and it has never given me a wrong signal. If traders choose not too pay too much attention to the CTO they do so at their own peril. Of course the CTO is only one of many indicators. Relative Strength Index, Volume and Open Interest, Moving Averages, Stochastics etc. all contribute to give you an indication of the direction of the market.
What is the 'CTO'. Also what is a reliable company to do the mail transfer at a reasonable rate. Thanks, -investor-
In today's Globe & Mail
"Last month, Montana completed regulations on a new law that makes it the first US state to open its doors as an offshore[sic] banking haven. Depositors cannot be US citizens or convicted felons. They must deposit at least $200,000(US)."
Years ago we used TNT Mailfast to process incoming US responses our direct-mail campaigns. Don't know if they provide this service for individuals.
You might try someone like Mail Boxes Etc. If they don't provide such a service then they're missing a golden opportunity (e.g. the 1,000s of Canadians who get their satellite TV from the US.)
CTO stands for Commitment of Traders Report. You can read this thread if you want to know more about it.
Ralph,thanks for the info on how you interpret COT Reports.
Are you aware of any websites similar to timely.com that generate stochastic charts and/or RSI charts for individual Canadian stocks?
Rick, not for Canadian stocks. I am sure that very shortly the features you are inquiring about will be made available by Canada Stockwatch and similar sites. For major futures contracts you can get RSI and Stochastics from the following sites (S&P500 is included): http://router.minot.com/~bohl/ http://www.digisys.net/futures/chart/fstwin58.gif
Wow! Heady discussion.
I'm somewhat confused - I assume that the primary reason for buying Vanguard Index (vs equity mutual fund) allows you to buy "insurance" (via futures market).
Do I understand this correctly?
Any thoughts on the fate of the Canadian $$ and entering the US market at this time? ie better to wait until the loonie firms up (gulp, or down?).
Not in my case Kate,
Even the better managed funds performance will not beat the indices (Case in question: European funds). So why not buy the index. the product is not available in Canada but in the US. That's where the logic is ..
Kate, in my case I use the S&P futures contract to hedge my stock positions, but I would not recommend this strategy unless you have experience with futures markets. With the introduction of the Mini S&P many more traders have now the possibility to use this contract. Regarding our comatose loonie,IMHO it is oversold and due for a small rebound. Will it happen tomorrow? To know that you will have to polish your crystal ball ;0)
I bet with my wife that good old Howard would appear on this thread saying that he just recently opened an account with Waterhouse is is thinking about buying a significant amount of BRK.A.
Guess I lost. ;-(
just opened an account with Waterhouse.buying more Pfizer.but they will not sell me Altimira bond. buffett is a buffoon. guess U lost kernel klinck after all
Thank you Mike. I knew I could count on you.