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By Jason Heath, CFP on February 19, 2025
Estimated reading time: 4 minutes

By Jason Heath, CFP on February 19, 2025
Estimated reading time: 4 minutes

Converting between U.S. and Canadian dollars can be costly. This technique can reduce the cost from 2% or more of the transaction to just a few dollars.

Canadian investors can get burned if they frequently convert their Canadian dollars to U.S. dollars in their investment accounts, because brokerages sometimes charge over 2% of the transaction to fulfill the request. The cost is somewhat hidden, in that brokerages typically use a foreign exchange rate that’s slightly higher than the “spot rate” you see when you look up the current exchange rate. However, a technique known as Norbert’s Gambit can help investors avoid some of those currency conversion fees.

Norbert Schlenker, the president of Libra Investment Management, reportedly came up with the idea for Norbert’s Gambit nearly 40 years ago. The concept became more prevalent over the past 20 years.

Schlenker used his idea to convert currency between Canadian and U.S. dollars using inter-listed stocks. For example, some Canadian stocks listed on the Toronto Stock Exchange (TSX) are also listed in U.S. dollars on the New........

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