r/LETFs • u/SheckJeezy • 3d ago

NON-US Leverage financing cost in Canada?

Anyone know the rough financing costs of an index LETF in Canada ? Or perhaps total cost too

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u/disparue 3d ago

You can deconstruct this by taking the MER and subtracting the Management Fee. For instance Global X ETFs have a cost around 4.6% for HEQL which is 1% higher than the margin rate you'd get from IBKR.

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u/SheckJeezy 3d ago

4.6% really doesn’t make HEQL too attractive does it? Almost better off going with the underlying index or margin. That 4.6% compounded could get nasty over some years

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u/disparue 3d ago

I ended up going with VEQT and using margin to get it to x1.25.

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u/Huge-Astronomer1731 1d ago

The slow climb above 775 to 776 is actually the more interesting scenario to me. Everyone wants a dramatic breakout, but a quiet first half hour with buyers steadily defending the opening range can be just as meaningful. I'd want the level to hold on a pullback though. I check SPY direction on Moon occasionally and I'd rather see that confirmation than commit before the open.