In this article:
Overview
Norbert's Gambit is an alternative method for converting large amounts of currency between Canadian dollars (CAD) and US dollars (USD) by avoiding standard foreign exchange fees. It involves purchasing a specific exchange-traded fund (ETF) in one currency and using our journaling feature to switch it to its version in the other currency before selling it.
While standard currency conversion is instant and convenient, it includes a percentage-based fee. Norbert's Gambit can help investors convert larger sums at a lower cost.
By using the journaling feature, you can change the currency listing of the Global X US Dollar Currency ETF (DLR and DLR.U), rather than using standard currency conversion.
- Processing time: Approximately two business days.
- Fee: $9.95 CAD plus tax per journaling request.
- Availability: This feature is available only on the web. It's not supported in the Wealthsimple app at this time.
Eligibility
To use Norbert's Gambit, you must meet the following requirements:
- You must have an active USD account within your Wealthsimple profile.
- You must have enough CAD in your account to cover the $9.95 journaling fee plus tax.
How to perform Norbert's Gambit
The following steps outline how to convert CAD to USD on the web. You can perform these same steps in reverse to convert USD to CAD by starting with DLR.U.
- Log in to your Wealthsimple profile
- Search for the Global X US Dollar Currency ETF (DLR) via the Search tab
- Buy DLR in CAD if you don't already own it
- Go to the security details page for DLR
- Select Journal in the holdings table beneath the stock graph
- Enter the number of DLR shares you want to convert to DLR.U (the US dollar version)
- Select Next
- Confirm the details of your journaling request
- Select Submit
After you submit your journaling request, it takes approximately two business days to complete. Once you see DLR.U in your account, you can sell the shares to receive USD.
Fees and risks to know
The journaling fee
The $9.95 journaling fee plus tax is always charged in CAD. Make sure you have a cash balance available in your CAD account to cover this cost, or the request may fail.
Bid-ask spread and market risk
While you avoid the standard conversion fee, you're still subject to the bid-ask spread (the difference between the buy and sell price of the ETF). Additionally, because the process takes approximately two business days, the exchange rate may shift slightly during that time.
Frequently asked questions
Why should I use Norbert's Gambit instead of the "Convert" button?
The Convert button is instant and includes a percentage-based fee. Norbert's Gambit has a flat $9.95 fee plus tax, which often makes it much cheaper for converting large amounts of money.
What happens to my shares while they're being journaled?
Your shares will be in a Pending state. You won't be able to trade these specific shares until the journaling process is complete.
Why is my journaling request taking longer than two business days?
Journaling can sometimes take longer than two business days, such as if the process happens over a statutory holiday. The two business days we display on the web and in the Wealthsimple app are an estimate of the processing time.
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