Category: DIY Investors

Death, Taxes and Estates: Part 3

RobH1 Comment

I am not a lawyer, accountant or tax expert. Your situation may be a lot different than mine. Seek professional guidance if needed.

Part 1 of this blog is found here, and Part 2 is here.

I’m in the tax season stage of wrapping up my Mom’s estate, who died a little over a year ago, a year and a bit after my father died.

Current status

I decided to hire a pro to do the Final Return and the Estate Return since I couldn’t figure out the fine details1 of doing an Estate Return. The Final Return (that’s the easy one, it’s just a regular tax return, except you have to inexplicably file it on paper) would have been within my skill set, but the Estate Return (the one that you have to file to deal with any income generated by the estate after death) was new and confusing to me.

I knew I was going to have to pay taxes on both returns, and using the tax calculators referenced here, I had a pretty good idea of what tax was going to be owed. In essence,

  • The Final Return takes the full value of the RRIF on the day of death as income. This will mean a lot of tax if the RRIF is sizable.
  • The Final Return also assumes any non-registered assets are liquidated on the day of death, which in the case of equity holdings, typically attracts capital gains and the associated taxes2.
  • The Estate Return is going to have to pay tax on any dividends, interest, or capital gains realized by the assets in the estate. Here the tax rate is high, because an Estate is treated as a Trust, and trusts don’t get personal deductions, meaning you get taxed on the first dollar of gains you manage.

A few wrinkles

Submitting the necessary paperwork to the accountant was the usual tedium of getting scans of T-slips, charitable donations and the like to the accountant. I did encounter a few problems.

BMO Investorline Problem 1: Sending T-slips to invalid addresses

My Mom’s assets were all held with BMO Investorline. Imagine my surprise when her retirement home let me know that snail mail from BMO (not BMO Investorline) had arrived at the home. I changed the address of all communications with BMOI to me nearly a year ago at that point, so you can imagine I was less than happy about having to drive across town to pick up what turned out to be a T-slip for the HISA I bought in her self-directed account. At that point, I was a few steps away from livid.

After spending some time with hapless agents who could not tell me why the mail ended up at an invalid address, I penned a note to the formal complaint department of BMO. I just figured that if there was some systemic issue at play here, that at least I could help those who followed me.

The complaints department ultimately admitted it was a screwup on their part and offered their apology. Whether or not it will happen to someone in my shoes in the future is unknown to me, but beware.

BMO Investorline Problem 2: Not providing an RC249 slip

The RC249 is a CRA slip that covers the losses incurred by a RRIF post-death.

It makes some sense: as mentioned above, the owner of the RRIF is assumed to get income equal the the value of the RRIF on day of death. But the RRIF assets aren’t automatically liquidated; they remain invested in whatever they were invested in. If that includes stocks/ETFs and the like, then it’s possible for the value of the RRIF to actually decline post-death. And that is what happened in my case. This loss becomes a tax benefit to the estate return, but only if you have an RC249 to prove it.

Now, the RC249 is clearly intended to be filled out by the issuer/carrier of the RRIF, in my case BMOI. And so, you would expect that to be automatically provided, wouldn’t you? Wrong again.

Another set of back and forth, first with the standard BMOI agents, and then the BMOI estate department, eventually produced a valid RC249 that I could send to the accountant.

Paying taxes owed

As much as I disliked the entire process of working with BMOI’s estate department, the one thing I did like about BMOI was that their non-registered accounts can be linked with a bank account (AccountLink) against which cheques can be written3. (This is something I set up months ago to help distribute some assets early to the beneficiaries). So once the accountants informed me of the eye-watering tax bill (which was pretty much aligned with what I expected), I was able to write the cheques and drop them off with little fuss. Thinking about how you will do that is something to consider in dissolving the estate.

Final Return Notice of Assessment

This was received in pretty short order, a few weeks after it was submitted, and the tax bill was correct.

Next steps

I await the Notice of Assessment for the Estate Account, at which point my accountant will be able to apply for a clearance certificate from CRA. This certificate essentially tells me that CRA considers all business with my mom and her estate closed. Once I have this, I can fully distribute all funds from the estate without having the CRA come after me for monies owed. This takes “up to 120 days” per the website.

  1. More accurately: I couldn’t bear spending hours reading arcane text on various CRA websites hoping I didn’t make a mistake ↩︎
  2. Note that unless directed, the liquidation doesn’t ACTUALLY take place. In my case, I moved all assets to HISA accounts once I gained control of the assets via probate, (a delay of a few months) and then liquidated the assets at the end of 2024. This I did to avoid earning any income from the estate holdings in 2025, which would have delayed the estate return. ↩︎
  3. No matter how hard I tried, I could not convince anyone at BMOI/BMO to send me a debit card for the account, which would have allowed me to “Bill Pay” CRA instead of writing cheques. ↩︎

News: Deal for DIY Retirement Planning

RobHLeave a comment

Disclaimer: I get nothing from pointing out this deal, and I haven’t used the product below myself. But all the same, it might be of possible interest to readers of this blog.

“Cashflows and Portfolios” is one of my top places to get advice. (It’s listed along with other great resources, in the blogroll).

Along with great (and free) advice, the folks behind the blog offer for-fee retirement planning services. But they do have one twist for the hard-core DIYer: they offer access to retirement projection software so you can do your own projections. (Looks like they use Adviice — just like a lot of planners do).

Anyway, their latest newsletter indicates that they’ve lowered the price of their DIY retirement planning service and are offering an additional 10% off. You can get all the details here.

I do recommend paying for some kind of retirement planning service; I did it and it gave me the confidence to set my retirement plan in motion 2 years earlier than I first anticipated. You can read about how I came to the decision to “pull the plug” here.

Example: Using iShares ETFs to Hit Your Asset Allocation Targets

RobH2 Comments

Previously, we talked in broad terms about the categories of what you can invest in, namely Equities, Bonds, and Cash. Having % allocation targets for each of these classes is a necessary starting point for making decisions. Here’s a post that talks about how to get there.

Maybe it’s helpful to take a look at some examples of what you can buy to hit each of these categories. I’m going to use iShares as the guinea pig since it offers a lot of products, but you could play the same game with any provider you like.

So if you visit iShares ETF page (this is what I’m looking at as I write this), you are presented with a list of (and I’m not joking here), 169 different ETFs. Ouch. How can anyone decide which of these is the best fit?

Helpfully, the page includes an “Asset Class” Filter:

iShares “Asset Class” classifcation for their 169 ETF products (May 2025)

…and now you can quickly recognize “Equity” (with 105 different ETFs to choose from). “Fixed Income” is the other term of interest — this will include bonds and probably something that looks more like cash. So this is now looking a little more sane. Wait, what’s this? They each have “sub classes”?

iShares ETFs Equity and Fixed Income Sub Classes as of May 2025

This narrows things down somewhat. Let’s break these down further.

Equity Sub-Classes

The term “Cap”1 comes up here. This is short for “capitalization” or, in plain English, “How big is the company we’re investing in?”. I don’t like to place bets on which companies are the most appropriate, so I would gravitate to the “All Cap” sub asset class here. “Large Cap” is probably the next best bet, since large companies tend to dominate the returns in the markets they serve. So let’s select both2.

We’re still left with 75 ETFs with that filter. Still a lot to take in. I suggest sorting by “Net Assets” with the largest on top by clicking in the appropriate column. I figure if other people are investing in these funds, why shouldn’t I?

So here’s my take on the ETFs I see on my screen:

ETF SymbolClassConsider? Comments
XIU, XICCAD EquityYBoth variations of TSX. I would lean towards XIC because it is cheaper to own.
XSP, XUS, XUUUS EquityYXSP is “hedged” meaning it tries to take away the FX variations, and I normally don’t worry about that. XUU would be my top pick here.
XEF, XFH, XSEM, XECInt’l EquityYXSEM/XEC are solely emerging markets, and I would never just hold it absent something like XEF/XFH as well. If I had to pick one, it would be XEF since it’s unhedged. If I could add a second, it would be XEC because it’s cheaper to own.
XQQUS EquityNThis is too narrowly focused on 100 Nasdaq stocks; the point of buying a asset category is to buy as many companies as possible
XAWUS Equity + Int’l EquityYAn easy way to get non-Canadian Equity exposure with one ETF
XGD, XEI, XDV, XFN, XEG, CPD, CDZ, CIF, XIT, XHCCAD EquityNThese are all too narrowly focused and/or trying to make bets on specific parts of the market. Asset allocation is about buying the whole market.
Everything elseNo ideaNThere are probably funds that I would consider further down the list but there’s only so many hours in the day, ya know?
Assessing the largest iShares All-Cap/Large Cap ETFs

Fixed Income Sub-Classes

One thing I’ve learned is that Fixed Income is harder to parse than Equity. My quick impression of the names I see on my screen:

  • Credit: No idea what this might mean
  • Flexible: ibid
  • Government: ok, that’s easy, this is only looking at bonds issued by governments. This tends to be the most popular segment of the bond market because (a) there’s a lot of them3 and (b) they are seen as safe investments.
  • High Yield: This is code for “junk bonds”. More risky, but higher rates of interest.
  • Inflation: My guess is that this is what is intended to mean “cash”
  • Multi-Sectors: My guess is that this trying to build a broad universe of bonds.

So, for simplicity, I think I’ll ignore the sub-segments but give you my take on the largest offering here again.

ETF SymbolSub Asset ClassConsider?Comments
XBBMulti-SectorY“Core Canadian Universe” sounds like it’s got a lot of holdings across the spectrum, and it’s cheap to own. Perfect. This is clearly “Bonds” in my nomenclature.
XSBMulti-SectorY“Short Term Bond Index” makes me wonder if this is leaning towards a cash-like investment. The fact sheet puts the loan duration at “1 to 5 years” which isn’t cash-like enough for me. This is “Bonds”, albeit rather conservative ones.
XCB, XSHCreditYThis is just the corporate bond market with no government. XSH is less risky because its bonds have a shorter duration on average.
CMRMulti-SectorY“Premium Money Market” sounds like “Cash” to me, and reading the fact sheet4 makes it sound a lot like ZMMK which was my previous winner in this category.
XGBGov’tNNothing wrong with it, but I don’t buy “just” government bond ETFs. Without some corporate exposure, they don’t generate enough returns for my liking. I’ll take the risk.
XLBMulti-SectorNThis only buys long-duration bonds. This would be ok if you had holdings elsewhere on the shorter side.
Everything elseNo ideaNThere are probably funds that I would consider further down the list but there’s only so many hours in the day, ya know?
Assessing the largest iShares Fixed Income ETFs

I do have to break away from the largest list to mention some ETFs on the Fixed Income chart that I didn’t know you could buy on the Canadian Market: XSTH and XSTP, which track the TIPS Bond Index. The TIPS index is well known to US investors5 because it’s a very cheap way to buy an inflationary hedge — it’s in the name, as TIPS stands for “Treasury Inflation-Protected Securities”. Now, of course, this refers to US Inflation, and unless you’re buying XSTH (which is the same as XSTP, except hedged to avoid FX changes) you’re also buying into a security that will vary with the CAD/USD exchange rate. So, not sure it’s of interest to the average Canadian investor, but it’s something I didn’t know about before.

Other classes in the iShares List

We only looked deeply at the Equity and Fixed Income categories, but what about the others?

  • The Commodity category holds ETFs that trade in one of Gold, Silver or Bitcoin. None of these provide predictable returns and are very narrow bets, so for that reason, I have no interest.
  • The Multi-Asset category contains funds that are a mix of Equity and Fixed Income, with the exact ratios depending on which specific fund you buy. This category contains funds I invest heavily in, namely XGRO and XEQT. I cover “all-in-one” funds like this in this article. Multi-asset funds basically take all the work of trying to balance your Equity and Bond percentages out of your hands for a very low price.
  • The Real Estate Category is just another segment of the Equity category and like other sub-segments, I don’t pay any attention to this one either.

A Final Word

Dividing Investments into asset classes (a short example)

It’s easy to slice and dice the three broad asset categories (Equity, Bonds, Cash) many different ways and you can spend many pleasurable6 hours finding the absolute “best” ETF for any subsegment listed above, or you could invent your own (Ultra Short Term Emerging Market High Yield Bonds Canadian Hedged?). It’s easy to go overboard here, and in the course of simplifying my portfolio, I have restricted myself to 5 broad categories when i think about my investments:

  • Equity: divided into 3 buckets for Canadian, US and International Equity
  • Bonds: There are no sub-buckets here, but the products I buy have broad geographic, segment, and duration coverage. Are they allocated optimally? No idea.
  • Cash: Everything in this category is held in either USD or CAD ultra-short term bonds.

You can see the specific holdings in my portfolio by looking at any of the “What’s in my Portfolio” posts (April 2025 is here or a series of 3 videos is found here) or you can just see the 4 ETFs I hold for the long term here.

And in the course of writing this article, I discovered this fun Asset Mixer you can use to experiment with different asset allocations yourself. It’s like making cocktails, except with money 🙂

  1. Bill Barilko disappeared… ↩︎
  2. Full disclosure: I cheated here. I couldn’t figure out why I wasn’t seeing TSX funds under “all Cap” but that’s because the usual TSX 60 fund is listed as a large cap fund. ↩︎
  3. Governments do love deficit spending ↩︎
  4. In Feb 2025, CMR added commercial paper to its holdings, making it look a lot more like ZMMK. I’ll have to take a closer look at this one. ↩︎
  5. Especially Bogleheads. Look it up. ↩︎
  6. Well, for some of us ↩︎

Investment basics: Asset Allocation

RobH19 Comments

We’ve talked about asset allocation / asset classes before in this space, most recently here. But while watching a recent post1 from one of my favourite experts, The Loonie Doctor2, it occurred to me that it might be helpful to start right from the beginning.

And to me, that beginning is understanding WHAT to invest in. Broadly speaking, you can choose between three categories: “Equity”, “Bonds” and “Cash”.

“Equity” refers to stocks of publicly traded3 companies. Owning stock means you own a piece of the company you invest in. This allows you to collect dividends if and when the company pays them out. If the company fails/goes bankrupt, the stock becomes worthless.

“Bonds” are essentially loans to companies or governments4. When you buy a bond, you’re buying into a stream of interest payments that stop when the bond is paid off. If a company who issued the bond fails/goes bankrupt, bond holders legally get first dibs on whatever assets remain in an effort to get their money back, but it’s possible that there isn’t anything left to fight over. Bonds can be fully paid off in various timeframes, from very short (30 days) to very long (20 years).

“Cash” is the money that’s left. Cash can be invested in things like high interest savings accounts, GICs/Term Deposits, Treasury bills (aka T-Bills), or stuffed under a mattress5. There is definitely a grey area between “Cash” and “Bonds” since both involve lending money to an entity. Shorter duration loans are more cash like. Lending to governments and large corporate entities (like banks, which is what you’re doing when you buy a GIC) is more cash-like. Money under a mattress is absolutely cash, albeit not really an investment at that point.

Using the data tabulated here, you can build a chart like the one below to see how much the $1000 investment you made in each of these categories would be worth 50 years later6.

The chart shows that Equities outperform Bonds and Cash by a wide margin when looking at an investment time period of 50 years. Bonds also outperform Cash substantially.
Historical returns for Canadian equities, bonds, and cash (as of December 2024)

Looking at this chart, it should be reasonably obvious that equities, represented here by Canadian Stocks, over time, generate the best bang for your invested buck. The “over time” phrase is very important, because otherwise, one could rightly ask, “why would anyone ever invest in anything other than stocks?”. The reason is volatility — in any given short time period, your returns could look very, very bad indeed. Just one example (of many) — the TSX has LOST money in 3 of the last 10 calendar years per https://en.wikipedia.org/wiki/S%26P/TSX_Composite_Index.

Bonds, generally speaking7, have a much steadier and predictable return, often uncorrelated with stocks. When stocks go up, bonds often move in the opposite direction. And cash, well, its benchmark is the inflation rate. If cash is returning the inflation rate8, then at least you’re standing still.

In my investment portfolio, my target allocations are 80% Equity, 15% Bonds, 5% Cash. Using products like all-in-one ETFs and my handy-dandy multi-asset tracker spreadsheet make this relatively easy to track. In my next post, I’ll show how to identify ETFs in each of the categories.

  1. Which provides further justification that using all-in-one ETFs is really the best approach. ↩︎
  2. Which, while positioning itself as being for doctors, has a ton of useful information for those of us who are not physicians as well. ↩︎
  3. And of course it is possible to buy stock in private companies (so-called private equity) but since I don’t know very much about that world, I figured I’d keep it simple and just talk about things that are available to the general public. ↩︎
  4. And the financial stability of those companies and governments can vary a lot. That’s where bond rating services can point you to higher quality entities (with a low risk of not paying) or lower quality entities (with a higher risk of not paying, but a better interest rate — the bottom of the barrel here are called “junk bonds”). ↩︎
  5. AKA “the chequing account of most major banks”, which don’t pay any interest ↩︎
  6. For “Canadian Stocks” this is the TSX Composite index (former name: TSE 300). “Canadian Bonds” is 10 year Government Bonds. ↩︎
  7. Let’s forget 2021-2 ever happened to the bond market. ↩︎
  8. And it doesn’t always do so! ↩︎

News: HISA Table for May, Questrade Plus, WealthSimple Self-Directed RESPs

RobH2 Comments

Happy May to all, here’s some news from the world of Canadian DIY investing.

HISA rates are stable

HISAs, for those in the know, are “High Interest Savings Accounts” and offer a nearly zero risk1 way to earn some interest on your cash holdings. Read all about them here. “Class F” funds are usually available via your online broker, often bought and sold in the same module as mutual funds, although they are NOT mutual funds.

The periodically updated HISA table I maintain has been updated for May. No changes seen from last month, which is unsurprising, given both Canada and the USA have held interest rates steady over the past month. Here it is:

ProviderFundLinkRate SheetRate
RBCRBF2011, RBF2021, RBF2031, RBF2041RBCLink2.55%
ScotiabankDYN6004, DYN5004, DYN3065, DYN3055, DYN3075ScotiabankLink2.70%
Equitable BankEQB1001, ETR1001Equitable Bankn/a2.55%
TDTDB8151, TDB8156, TDB8158, TDB8160TDn/a2.55%
RenaissanceATL5071Renaissancen/a2.55%
Home TrustHOM101,
HOM201		Home TrustLink2.65%
B2BBTB101B2B Bankn/a2.75%
ManulifeMIP610, MIP810Manulifen/a2.40%
National BankNBC200, NBC6200, NBC8200NBI Altamira CashPerformern/a2.55%
Canadian HISA rates, last updated June 9, 2025

Here are the USD rates offered:

ProviderFundLinkRate SheetRate
RBCRBF2015RBCLink4.15%
ScotiabankDYN6005,
DYN5005		ScotiabankLink4.15%
Equitable BankEQB1101,
ETR1101		Equitable Bankn/a3.80%
TDTDB8153TDn/a4.15%
RenaissanceATL5075Renaissancen/a4.15%
ManulifeMIP611Manulifen/a3.30%
National BankNBC201NBI Altamira CashPerformern/a4.15%
USA HISA rates, last updated June 9, 2025

Questrade Plus Launches: Meh

In other news, Questrade launched a new subscription service2. Dubbed “Questrade Plus”, $11.95/month gets you free journaling, better quote data, and a subscription to Passiv Elite.

As a newly-minted Questrade user (got my first bonus payment yesterday, yay!) I see this as a net negative. Let’s look at why.

Passiv Elite is no Longer Free

One nifty (and unexpected) bonus I discovered being a Questrade client was getting access to Passiv’s advanced features. Questrade Plus means that particular freebie is coming to an end. Passiv’s “community” (i.e. free) service is still somewhat useful, but if you want automated rebalancing, you’re going to have either pay Questrade (and subscribe to Questrade Plus) or Passiv (currently $99/year) for that privilege in the near future.

Unlimited Journaling of Limited Use

The unlimited journaling feature of Questrade Plus targets people like me who do Norbert’s Gambit to convert USD to CAD on the cheap, but since I don’t do this sort of thing super-frequently (maybe 5-6 times a year at most), I’d rather pay-as-I-go (currently priced at $9.95 per request).

Real Time Data Streaming of No Interest

The “real time data streaming” feature targets the day trader. Other providers include this sort of thing for free (QTrade, Interactive Brokers). That’s not my thing. It does make me wonder who Questrade sees as their ideal client. Are they trying to be Wealthsimple? Or are they trying to be Interactive Brokers?

Wealthsimple Self-Directed RESPs, coming soon

Wealthsimple continues to chip away at the gaps in their self-directed portfolio offerings. RESPs were one of those gaps, but now it’s been filled, and the main website has been updated to reflect this. I can confirm that I have been offered a spot on the beta launch, so its release to the general public is imminent. Wealthsimple has offered robo-advisor RESPs for a while, but the DIY investor has been forced — until now — to look elsewhere for this.

  1. Unless banks fail. We are all in a lot more trouble if that happens. ↩︎
  2. Because, we all know, you can never have enough subscriptions, right? ↩︎