Saving account ETF | Page 2 | General financial discussion | Discussion forum

Londonguy said

They're very clear in pointing out that an ISA is a deposit and not a mutual fund (nothwithstanding that you have to use their mutual fund order entry module to buy or sell it) but for some reason I've never gotten jammed by them over the early redemption thing.…

Yes, we humans know that units of an ISA are actually a deposit and not units of a mutual fund. But, their account system sees them as a mutual fund.

By design, the ISA's are dressed up as mutual funds. One purchases units of an ISA like units of a mutual fund. They are accounted for like units of a mutual fund. The orders even go through the same order system as the orders for mutual funds.

I strongly suspect the TD ISA's are dressed up as a money market fund in TD Direct Investing's platform and are therefore exempt from their short-term redemption fee.

I think the reason for the short-term redemption fee assessed by dealers, that's on top of the short-term redemption fee levied by the funds, was that the trailers fees were paid at certain intervals, like monthly or quarterly. If units of a fund were held for less than one interval, then no trailer would be paid to the dealer for those units.

Dean said

. . .

Any thoughts ?

.
>> BUMP <<

Update > 'WARNING' . . .

Today on TD WebBroker, I tried to initiate a trade to buy into 'PSU' (Purpose High Interest Savings ETF), but I was Blocked and given this message;

"Not Eligible For Trading Online. Cannot Be Placed Electronically".
.

When I called TD WebBroker for an explanation, all they would say was that it was for security reasons, based on concerns with this ETF ... they wouldn't elaborate any further.

WTH is going on with 'PSU' ?!?!

Norman1 said
RBC Direct and TD Direct Investing refuse to accept orders for the Purpose cash ETF's, according to Stockwatch (2018-07-30): Globe says brokers TD, RBC won't process PSA ETF orders,  

Thanks for that ^, Norman ... well done!

So the person I talked to at TD WebBroker, basically 'Lied' to me! Apparently, there's no 'security' issue at all ... they're just blocking the competition !

I would take it up with the securities regulators, Dean. Challenge them on it! Make them point out under what provision they're legally permitted to block trading in a duly registered (in all provinces and territories) exchange-traded fund or company. In effect, they might as well be saying they bar you from purchasing shares in a specific TSX-listed company because, unlike mutual funds, which they're not legally obligated to distribute, the beauty of exchange-trade companies and funds is that their availability is agnostic as to the investment dealer with which you deal.

Dean said Personally, everything I've seen about TD Direct Investing, including its clunky WebBroker platform, turns me right off. It's nothing like the powerful TD Ameritrade in the U.S., with which TD owns about 40-44%. My "top picks" would be Scotia iTRADE (they now offer fee-free U.S. dollar accounts of RRSPs!).

Having read Doug's comments ^ a second time now, maybe it's time to bring this thread back to it's original subject (HISA ETF's).

I for one, haven't ruled them out. And I"m trying to weigh the pros & cons of HISA ETF's vs HISA ISA's.

I'm beginning to think that it might be a good idea to have 'both'!

Any thoughts ?

In answer to your above questions, aside from what's mentioned, the intraday liquidity is huge, although I didn't know that, @Norman, that with Scotia iTRADE they'll increase your "buying power" within ~1-2 hours or so of your placing a sell order on your BNS ISA "fund". That's a definite advantage to sticking with Scotia iTRADE (it really is a best-in-class brokerage). It's got some issues and may have less GICs and ISAs than, say, Questrade or Virtual Brokers, but they've beefed up their offerings and added CFRA equity research reports.

To Norman's earlier speculation about BNS ISA being potentially subject to short-term trading fees if sold less than 30-90 days, I can confirm that's old verbiage on the Scotia iTRADE platform and have previously confirmed (via telephone conversation with Scotia iTRADE reps) that ISAs are not part of that short-term trading fee applicability. Now, if you were to buy and sell mutual fund wrapper of, say, PSA or CSAV (they're both available in mutual fund form, but again depends on the brokerage and not at Scotia iTRADE to my knowledge), then there'd be a short-term trading fee as those are mutual funds. The ISAs themselves, while they have fund codes, are not mutual funds. You own units directly, though they're registered in the name of the securities clearing company, The Canadian Depository for Securities, Limited, in trust for your investment dealer/registered plan trustee who, in turn, hold them in trust for you (called "book-entry" or "nominee" holding).

FYI: the mutual fund and HISA investment/mutual fund dealer platform is called FundSERV and you can obtain a list of all the "book entry" ISAs available through the platform (though not necessarily through all dealers, as noted), by going to this URL:

https://www.fundserv.com/tools-and-training/tools/fund-profiles/

and entering "Investment Savings Account" in the search box. I just noticed Alterna Savings' (looks like CU, not Bank) has a "book entry" version of its HISA available as fund code NWT099, distributed by Northwest & Ethical Investments, L.P., so that's interesting. Presumably, it's available through Qtrade, since Qtrade and NEI share a common owner in Aviso Wealth. You can also vary your search by searching for "High interest savings".

Note also the "product type," which helps to differentiate whether short-term (30-90 days usually) trading fees would be applicable through some brokerages. For example, searching for "High interest savings" nets you some additional ISA possibilities but also some mutual fund HISA funds that may have that short-term trading fee Norman mentioned.

The DB GICs "trade" through a similar system called gicSERV, and you can get more details on that here:
https://www.fundserv.com/content/uploads/2015/12/20160216_GICserv_ENG_digital.pdf

I wish they had a complete list of GICs available through gicSERV to participating dealers, but sadly, they do not.

Nevertheless, I find the fund profile lookup tool helpful for getting the fund code which I can then easily plunk into Google, DuckDuckGo, or similar, and obtain the ISA product literature and current rates.

Cheers,
Doug

If investment dealers really are required to provide full access or no access, then Wealthsimple Trade could end up closed. They have a whole list of exchange listed securities that they block. No preferred shares. No warrants. No exchange-traded debentures. No LP units. No stocks under 50,000 of daily volume.

I don't think there is any obligation to provide full access. Even the kinds of orders that can be placed is not the full set available.

Although Norman may be correct in principle, WealthSimple may not be a good example. My understanding of them is that they make the decisions and do the trading, so, for that reason, would never use everything that is available to buy. I wouldn't call that blocking, but rather it's the nature of their service that the individual has signed up for.
In my view, blocking would be when a DIY individual wants to buy a particular item but it is not made available to them.

Doug said

That's true, Norman, but it's somewhat unprecedented for a Big 5 bank-owned discount brokerage to not provide access to an exchange traded fund. …

Yes, it is unprecedented. But, then no-one ever tried to tap into the Big 5 Bank's deposit base through such a backdoor before. Should someone create an ETF holding just 5-year GIC's and term deposits, I suspect that ETF would similarly be blocked.

The Purpose High Interest Savings ETF (PSA) units are available through BMO InvestorLine. It is included in their latest list of dividend reinvestment plan eligible securities.

According to the July 27, 2018 Globe & Mail article Not all online brokers are friendly to investors holding cash, trades for the ETF units need to be placed through a telephone representative and not through their online order system.

The Globe & Mail article indicated that BMO InvestorLine will charge the usual $9.95 online trading commission for the PSA orders, even though a live representative is involved.

Normally, it is minimum $43 commission when a live representative is involved.

It is possible the representative could try to steer the caller to something else. There is a new cash ETF, the CI First Asset High Interest Savings ETF (symbol CSAV), that the writer mentions in his June column This is the place to stash your investing cash.

CSAV holds deposits in Royal Bank, Bank of Montreal, ScotiaBank, National Bank, and CIBC. The Big 5 Bank owners of the discount brokers may find CSAV more palatable.