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Written by Tony Dong, MSc, CETF® at The Motley Fool Canada
Between Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and First Home Savings Accounts (FHSAs), Canadians have plenty of tax-sheltered room to work with.
But even the most diligent savers will take time to max out those accounts. If you’ve already filled them, the next step is usually a non-registered account. These are far more flexible – no limits on contributions or withdrawals – but every dollar of income is taxable, and not all income is treated the same.
That creates a challenge for exchange-traded fund (ETF) investors. Some ETFs are simply less efficient in a taxable account than others. One option that stands out for its tax profile is the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY).
VDY is designed to track the…
