I transferred my RRSP to my brokerage to make better investments and hopefully better returns.
I decided to start off with international exposure. I decided to go with XAW ETF based in Canada. The ETF is actually called iShares Core MSCI All Country World ex Canada Index ETF. To learn more about this ETF, click here.
I now own 35 units of this ETF. I did not use my own money, except the capital to purchase other positions to help pay for it.
Steps:
- April 24 Purchased 400 shares of SJR.B
- April 24 Sold 4 SJR.B covered calls with expiration May 15 2020 at $23 strike for net premium of $206.05
- May 14 Bought 8 units of XAW ETF at $24.93 for a cost of $199.47 including ECN fees
- Covered call expires worthless
- May 19 Sold 4 covered calls on June 19 2020 $23 SJR.B for net premium of $226.05
- June 10 Bought 9 units of XAW at $27.36 for a cost of $246.27 including ECN fees
-June 19 Option assigned
- June 23 Purchased 400 shares of SJR.B
- June 26 Bought 10 units of XAW at $26.35 for a cost of $263.54 including ECN fees.
- July 2 Sold 4 covered calls with expiration August 21 2020 at $23 strike for net premium of $246.05
- August 12 Option assigned
- August 14 Bought 1 unit of XAW at $28.27 with no ECN fees.
- August 17 Bought 200 shares of Fortis (FTS.TO)
- August 19 Sold 2 FTS.TO covered calls with September 18 2020 expiration at $54 for net premium of $108.05
- August 20 Bought 7 units of XAW at $28.11 for a cost of $196.79.
I received dividends as follows
- May 28 2020 SJR.B $39.50
- June 29 2020 SJR.B $39.50
- June 30 2020 XAW $3.93
- July 30 2020 SJR.B $39.50
I will be receiving the FTS.TO dividend of $95.50 on September 1.
Summary
Options premiums received = $206.05+226.05+ $246.05+$108.05
= $786.20
Dividends/Distributions received = $39.50+$39.50+$39.50+$3.93
= $122.43
Future FTS.TO dividend = $95.50
The total amount is $1004.13
Purchased costs for XAW = $199.47+ $246.27+ $263.54+28.27+196.79
= $934.34
You can see that my purchase of 35 units of XAW have been paid by a future dividend from Fortis, option premiums collected and payouts via both dividends and distributions.
Note: My RRSP is not part of the blog and therefore the dividends, distributions, RRSP portfolio value and option premiums are not part of my portfolio updates or dividend income updates. The market value of my RRSP will appear in my net worth updates.
Disclosure : Long XAW.TO
DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
Nice move. I have heard great things about XAW.TO. Do you think RRSP is the best vehicle to hold international ETFs like this one? U.S. dividend paying companies make up a big portion of XAW. As far as I know, there's no dividend withholding tax on U.S. companies if XAW.TO is put into an RRSP.
ReplyDeleteLiquid,
DeleteI think it would be best for the RRSP, when an investor uses this vehicle. I am assuming there is no taxes on US income. They would have to separate, in this case, the US income from other foriegn companies. I can't see this anywhere on their website about them breaking down the income generated for tax purposes.
Actually, just figured something out. On the distributions section, when you click on calendar year the types of income is separated like capital gains, foreign income, foreign tax paid etc expressed in Canadian dollars. Still doesn't breakdown the dividends received by country in the financial statements for XAW.
Delete