Algonquin Power & Utilities Corp T.AQN

Quick Question

[Scrivs187]

Looking to open a position with Aqn (Canadian) and noticed the dividend is in US currency. Am i stuck with the US dividend and then pay a fee to convert or do brokerages convert for you? (Currrently with CIBC Investors edge)

Thank you

[itwillbeoknowok]

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[probowler900]

If you are setting up a DRIP for AQN,keep it on the US side of your account.You get a more favourable stock price.Cash,you should get whatever bank conversion rate is.

[MS12345]

Thanks. However, if keeping it in an RRSP, it will automatically convert to CDN. At least that's how RBC does it. Others see the same thing?

[bcsc]

If your brookerage is converting currency you can bet that you are paying for it. Its pretty easy to figure out the exchange rate they use for the transaction versus what the bank of canada rate is on a given date. Its no fluke the banks make billions every quarter.

[masfortuna]

Yes I am.  And if oil keeps increasing, the value of the Cdn dollar will increase. So if you had bought US shares with US dollars in October, you would be down 4.5% from the Cdn increase (.74-.78) and another 1.5% for a total of 6% in 3 months to convert your capital to be able to purchase on the American exchange. Not sure if this poster has done the math...

[probowler900]

Follow Up: I hold AQN in my RRSP.I hold the shares in a US account within that RRSP.This way dividends paid in US funds,remain in US funds.Also AQN is set up as a DRIP.So my shares are purchased in US funds as well.No conversion rate needed. P.S.You mentioned RBC.Ask if you can add a US account within your RRSP and transfer your shares to that side of the account to do the above example.I am with

[masfortuna]

Yes that would work insofar as the divy is concerned BUT your initial purchase was made in US funds which have lost value in the last 9 months (from .65 to .78) and your financial institution would have charged you 1.5% to exchange that currency from Canadian to American.  That's a big hit when you look at the divy rate at  below 4% . ***  It's a 20% haircut on yor initial