5 Years Later, is Investing in CDRs Worth It?

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.

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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.