![Guide: 5 Years Later, is Investing in CDRs Worth It? [Podcast]](/public/default.jpg)
CDRs were pitched as a simple way for Canadians to buy U.S. (and now a few international) stocks in Canadian dollars—with built-in currency hedging.
Five years after their launch, we revisit what CDRs actually are, what they do well, and why the “convenience” story often comes with a price tag investors don’t fully see. If you’re holding CDRs—or considering them—this episode helps you decide if they still make sense for your long-term plan.
Download the FREE and Honest Guide to CDRs!
You’ll Learn
What a CDR really is (and what you actually own): A “wrapped” version of an underlying stock, priced in CAD, that gives you a fractional interest in the real shares. Same cake—different packaging.
Why the lower share price isn’t a discount: Buying 20 “slices” instead of 1 “whole” share doesn’t change your return—percentage performance is what matters.
How currency hedging works—and when it backfires: CDRs can remove CAD/USD swings from your returns, but hedging can work against you (like it did over the last several years if the USD strengthened).
Dividends and withholding taxes: what stays the same: You still receive dividends (paid in CAD), and withholding tax generally applies the same way depending on account type.
The two big drawbacks Mike can’t ignore:
- Annual fees (often ~0.60%–0.80%) for something you can usually buy directly with no product fee
- Wider bid/ask spreads due to lower liquidity—making limit orders more important
A practical alternative to “no currency conversion” marketing: How Norbert’s Gambit can convert CAD?USD with minimal cost (and why DLR is commonly used to reduce volatility risk).
For new investors with small monthly contributions: Why starting with diversified ETFs often beats building a stock portfolio $100 at a time—even if CDRs feel more exciting.
The real takeaway: CDRs can be convenient, but convenience isn’t free—your decision should come down to whether hedging + CAD simplicity is worth ongoing costs.
Related Content
Download the FREE and Honest Guide to CDRs!
Get the full explanation on how to proceed with Norbert’s Gambit to convert CAD to USD.
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This podcast episode has been provided by Dividend Stocks Rock.
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