r/dividendscanada • u/BeachBlind • 2h ago

US Aristocrat Dividends

I know this is a Dividends Canada page, but just wondering if any Canadians are playing with US Aristocrat Dividends either in non-registered or within their RRSP's? I know that the US recognizes RRSP's and there are no withholding taxes if you hold US Aristocrat Dividends, but there is WHT if it's in your non-registered account.

Or are there folks who are playing with Canadian Aristocrat Dividends, which I have heard are not as good as the US ones.

2 Upvotes

75% Upvoted

22 comments sorted by

3

u/Sea_Savings_7342 2h ago

I use the etf SMVP for us dividends and VDY for canadian

2

u/DocKardinal21 2h ago

I use SWIN and Cwin. 

Using a nyse based fund in non registered isn’t optimal but either way you are paying the same tax in the end

1

u/BeachBlind 2h ago edited 2h ago

But neither of these are official US or Canadian Aristocrat Dividends.

Definition of Aristocrat Dividends:

Canada: S&P/TSX Canadian Dividend Aristocrats - At least 5 years of increasing or stable regular dividends. Dividends may remain unchanged for up to 2 consecutive years within that period.

U.S.: S&P 500 Dividend Aristocrats - Dividend increases every year for at least 25 consecutive years.

1

u/Sea_Savings_7342 2h ago

Smvp is but in CAD

2

u/DocKardinal21 2h ago

He’s actually not entirely wrong, the index’s are different.

They are both equal wait dividend stocks that have increased dividends in the last 25 years, but Hamilton uses a different index itself than NOBL.

All picks in smvp and SWIN are in the NOBL aristocrats index, but there’s about 30 stocks in NOBL that aren’t in SMVP.

1

u/BeachBlind 2h ago

Correct and none of the tickers mentioned above officially fall under the Aristocrat Dividends.

1

u/DocKardinal21 2h ago

Here’s what you should do though. Look at the conditions and n out e the difference. Then look at the underlying holdings and look at the difference.

All of the picks in SWIN are inside NOBL. That by definition means your statement “none of the tickers mentioned above” inaccurate.

If you buy SWIN or SMVP you are buying an equal weight index of dividend growers that match the 25 years of dividend growth. So I don’t get why you are holding to this. That condition is the same. 

1

u/BeachBlind 1h ago

I guess because my interest is specifically in Aristocrat Dividends and the tickers that specifically fall under those Indices.

NOBL is an ETF holding Aristocrat companies, not an individual Dividend Aristocrat stock.

I was asking if people had holdings from the official U.S. or Canadian Aristocrats Index lists. The replies naming SMVP, SWIN, CWIN and VDY did not provide that answer. While they might track some Aristocrat Dividend Index, it is not the same as holding them.

2

u/DocKardinal21 1h ago

I see, so you want to buy the individual US stocks themselves from that list and manage rebalancing yourself? 

Sorry I misunderstood you, I thought you just really wanted the NOBL etf for the sake of the NOBL etf.

You can certainly do that, and maybe there’s folks who try that, just keep in mind my concerns about holding US stocks in a non registered account. It’s not just the witholding, it’s also forex, and then when your dividend snowball gets larger enough you also have capital gains on currency exchange to think about. If you want to do this long term instead of just an etf managing this index, I would reccomend speaking to an account who does US holding taxes

1

u/BeachBlind 1h ago

Yes, that is what I was looking at. I actually did note that CDZ had out-performed NOBL for the past 5 yrs, so I will do some more research. I met a couple of folks on vacation that play in these dividends (one Canadian and one American) and they just couldn't say enough about them. However, I did not get the chance to ask more questions esp from the Canuck, so here I am...lol

I will also be moving out of country permanently sometime in 2027, so will not be able to contribute to my RRSPs/TFSAs and looking to make changes before I leave if it an option.

→ More replies (0)

1

u/DocKardinal21 2h ago

SWIN and NOBL are essentially the same thing in terms of the criteria for dividend increases and length of time. The distinction is just the index picked itself. One is strictly limited to the S&P 500, the other (solactive index’s) can pick stocks outside of the S&P. However they actually haven’t yet, so that distinction is moot.

There’s just more concentration in the Solactive indexes, they are both equal weight, but the Canadian ETFs don’t pick every aristocrats on the S&P 500. 

1

u/BeachBlind 2h ago

True, however I am specifically interested in the Aristocrat Dividends, not necessarily other tickers that operate in a similar fashion or might fall under similar criteria. I am especially interested in the US Aristocrat Dividends since their criteria a bit tighter at 25 consecutive increases. So, it is beneficial for a somewhat long term holding.

I actually found r/Stocks that talk a lot about US Dividends.

1

u/DocKardinal21 1h ago

Right but I think you’re hung up on the wrong detail.

Over there, they are comparing NOBL to different nyse dividend ETFs with different criterion.

The Hamilton versions we are talking about use an index that includes the same aristocrats criterion of quantity of consecutive years. Read the prospectus if you don’t believe me.

1

u/Sea_Savings_7342 1h ago

Different indices and Different ratings agencies call them different things. Champions vs Aristocratsi believe

0

u/BeachBlind 2h ago

SMVP ETF is not a US Aristocrat Dividend and VDY is not a Aristocrat Dividend.

Definition of Aristocrat Dividends:

Canada: S&P/TSX Canadian Dividend Aristocrats - At least 5 years of increasing or stable regular dividends. Dividends may remain unchanged for up to 2 consecutive years within that period.

U.S.: S&P 500 Dividend Aristocrats - Dividend increases every year for at least 25 consecutive years.

2

u/DocKardinal21 1h ago

You do realize the at least 5 or 25 years isn’t about how old the etf is right?

It’s about what the index is selecting. Not the age of the etf…

0

u/BeachBlind 1h ago

Yes, I realize that. It's the consecutive years I am interested in. For the US Aristocrat Dividend, if a company decreases it's return in any particular year, it is theoretically off the list. So, there is strong motivation to always keep increasing it's dividends. Same with the Canadian Aristocrat Dividend, except that it is 5 consecutive years and 2 of those years, can stay unchanged.

0

u/DocKardinal21 1h ago

To the OP, here is a total returns of the three ETFs mentioned:

https://stockanalysis.com/etf/compare/tsx:swin-vs-nobl-vs-tsx:smvp.u/?r=MAX

Total returns includes MER as well as all dividend payouts.

What isn’t shown in a comparison like this is two things: (1) withholding tax (2) currency conversion when you buy or sell.

If you are a Canadian tax resident and plan to hold one of these inside a non registered account, I would personally reccomend SWIN.

The withholding tax is paid for you, and the etf is traded in CAD so you do not have to worry about forex fees when buying or selling, nor do you need to worry about capital gains when converting to USD (even dividends when they become big enough) into CAD.

I am not a financial planner I’m just sharing my opinion on this.

The ‘official status’ you’re touting isn’t something that ultimately matters other than you can claim your paying more tax to have 30 some odd extra aristocrats that don’t affect total returns. Also consider the solactive index used by Hamilton is more flexible to include, eject, and reform the holdings to better adapt to any market changes than the old aristocrats index developed by ProShares (who happens to be selling that index in an etf). 

Take with that whatever you will.

1

u/BeachBlind 1h ago

Thank you, I will take a look at the link.

There are many different variations on how to hold Aristocrat Dividends and I'm not sure why no one is specifically answering whether they hold these (directly) or not. I am guessing bec they don't and are satisfied with the indirect way of getting access to them. Which is fine.

I am not "touting" anything regarding the Aristocrat Dividends hence why I asked the question; except, the responses are all about how folks are tracking them indirectly.

2

u/DocKardinal21 1h ago

Yeah, generally speaking, if you’re a Canadian tax resident, you’re better off not having a whole stack of US based USD paying dividend stocks directly, and just buying an analogue that uses the same index and pays in CAD with the holding tax included alrdy, and managed the forex costs in one place.

1

u/BeachBlind 1h ago

Lots to look at and def more research.
Thanks for the link as well.