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How to properly compare the performance of a domestic index fund and an international index fund domiciled in the U.S?

Personal Finance & Money Asked on April 5, 2021

For example, when comparing the performance of IVV (which tracks the S&P500), against the performance of the FTSE Canada RIC Capped Index (which tracks mid and large cap Canadian stocks), the S&P500 index clearly performed better than the Canadian index for the last 5 or 10 years, but is that the end of the story?

I recently learned about Dividend Tax Withholding, which in the case of Canada, is set at 25%. Is the performance of the Canadian Index calculated before or after this tax? If it is after, my understanding is that as a U.S resident, when I file my tax return, I get a tax credit equal to the foreign tax paid. This means, that the tax Canada withholds is of no consequence to me. If all that is correct, I would have to adjust up the performance of the Canadian Index to account for this. So, how would I go about that?

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