Category: Audience

What’s in my retirement portfolio (July 2025)

RobH4 Comments

This is a (hopefully monthly) look at what’s in my retirement portfolio. The original post is here. Last month’s is here.

Portfolio Construction

The retirement portfolio is spread across a bunch of accounts:

  • 7 RRIF accounts (3 for me, 3 for my spouse, 1 at an alternative provider as a test)
  • 2 TFSA accounts
  • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint)

The target for the overall portfolio is unchanged:

  • 80% equity, spread across Canadian, US and global markets for maximum diversification
  • 15% Bond funds, from a variety of Canadian, US and global markets
  • 5% cash, held in savings-like ETFs.

You can read about my asset-allocation approach to investing over here.

The view as of this morning

As of this morning, this is what the overall portfolio looks like:

Retirement holdings by ETF, July 2025

The portfolio is dominated by my ETF all-stars; anything not on that page is held in a non-registered account and won’t be fiddled with unless it’s part of my monthly decumulation. Otherwise I’ll rack up capital gains for no real benefit.

There weren’t big changes this month. My monthly decumulation from my RRIF accounts involves selling enough XGRO to meet RRIF-minimum payments, and the rest of my retirement paycheque is funded by my non-registered accounts. This month, given the run in the US stock market of late, that involved a sale of some shares of HXS1.

Plan for the next month

The asset-class split looks like this

The bond portion of the portfolio is a little smaller than I would like. The targets for my portfolio are unchanged:

  • 5% cash or cash-like holdings like ICSH and ZMMK
  • 15% bonds (almost all are buried in XGRO and AOA)
  • 20% Canadian equity (mostly based on ETFs that mirror the S&P/TSX 60)
  • 36% US equity (dominated by ETFs that mirror the S&P 500, with a small sprinkling of Russell 2000)
  • 24% International equity (mostly, but not exclusively, developed markets)

The change in the bond portion of the portfolio was amplified because I hadn’t updated the asset split of AOA in my multi-asset tracker in a while. AOA has drifted quite a bit since it only rebalances twice a year (next time in October). More on drifting in multi-asset ETFs here.

Overall

The retirement savings look quite healthy; even though I’ve been drawing a monthly salary for 7 months, I’m now ahead of where I was when I started my retirement journey. This is aligned with what my retirement planner told me to expect, but as you can see, the journey has had some interesting ups and downs already.

Monthly retirement savings, as percentage of Jan 2025 value

My VPW-calculated salary has hit a new high this year, a dizzying 0.77% higher than my first draw in January. This stability is thanks to the built-in shock-absorber of the VPW model (a 6-month cash cushion which smooths out the market gyrations considerably). I also think it’s an endorsement of my choice to take retirement payments monthly; my exposure to short-term market hiccups is greatly reduced since I’m not making big sales of ETFs to fund a year of spending all at once.

Monthly salary, as percentage of Jan 2025 salary
  1. Which particular ETF I sell from my non-registered portfolio is based on what asset class is the most overweight at that point in time. If it’s US Equity, then I sell US Equity. If it’s Canadian Equity, then I sell Canadian Equity. ↩︎

Dealing with Drift in Asset Allocation ETFs

RobH1 Comment

I rely a lot on asset-allocation ETFs in my retirement portfolio, mostly XGRO in the CAD side of the portfolio and AOA on the USD side1. These ETFs (about 70% of my overall retirement portfolio, as you can see here), like all asset-allocation ETFs, rebalance their holdings periodically in order to stick to their asset allocation targets. This aligns perfectly with my way of investing; I’ve always tried to stick to my asset allocation targets portfolio-wide, assisted by tools like my multi-asset tracker spreadsheet. (If you aren’t familiar with asset-allocation as an investment strategy, you could give this article a read.)

XGRO’s asset allocation targets are written right in the prospectus2:

  • 80% Equity, with 36% US equity, 20% Canadian Equity, 20% International Developed Market Equity, 4% Emerging Market Equity.
  • 20% Bonds, 16% being held in Canadian bonds. The other 4% are designated “non-Canadian” but seems like it’s always US bonds.

Anyway, XGRO’s approach to making changes to the portfolio in order to maintain this target percentage is written in the prospectus too:

XGRO’s portfolio will be monitored relative to the asset class target weights and will be rebalanced back to asset class target weights from time to time …XGRO’s portfolio is not expected to deviate from the asset class target weights by more than one-tenth of the target weight for a given asset class

Page 419 of the iShares Prospectus (June 2025)

Now “from time to time” isn’t terribly precise. I thought I’d take a closer look at the history of XGRO’s asset allocations. So I dug through annual and semi-annual reports as well as the website. I focused on the Fixed Income (aka Bond) proportion of XGRO over time because that’s the asset class that’s most likely to drift lower3…equities typically outperform fixed income historically. So this is what I found:

So there is a bit of drift in the fixed income portion of XGRO, but in the past year I haven’t seen it off by more than 1.2%, meaning that the promise made in XGRO’s prospectus is being adhered to.4

Turning now to AOA, the fixed income proportion is clearly stated to be 20%, and rebalancing is stated to happen twice annually, in April and October. After that, things become a bit harder to work out56. The various equity contributions are determined by the target index, namely the S&P Target Risk Aggressive Index, which are constructed by using market capitalization of the various indices used7.

Anyway, like XGRO, what I’m most concerned about is the fixed income portion of AOA, and digging through the various reports, I came up with this:

Of late, the fixed income portion AOA has become small, almost 2% lower than it should be. And given that AOA is about 50% of my holdings, it means that my equity exposure is quite a bit higher than I would let it drift myself.

I suppose the next rebalancing in October 2025 will correct this, but I admit it makes me a little uneasy to see that sort of volatility in the asset allocation8. I could of course just sell some AOA and reinvest it in some bond fund (AOA uses IUSB and IAGG, which seem like fine choices) but then I’m just working around the asset allocation strategy I’m paying for in AOA’s management fees, which seems dumb. Not to mention that anything I do now will almost certainly have to be undone come October.

So I guess this all means I should just let sleeping dogs lie. I have minor bits of money to reinvest every month (I still contribute to my TFSAs) so using those funds to buy bonds are probably what I’ll do. It’s a tiny pre-correction that should be addressed come October…or by the next equity meltdown.

  1. And both are on my “ETF all-stars” page ↩︎
  2. And since detailed targets are clearly stated, these are the percentages I assume for XGRO in my multi-asset tracker spreadsheet. I could continually update the percentages since they calculated daily on XGRO’s page, but it seems like busywork. ↩︎
  3. My retirement decumulation strategy (VPW) relies on knowing what my asset allocation is, too ↩︎
  4. It does mean, however, that my equity exposure Is higher than I thought. ↩︎
  5. Well, or maybe I’m just not that smart — I’m not really sure if one can calculate the market caps needed to work out the allocations. ↩︎
  6. And unlike XGRO, I actually do track (from time to time) the underlying allocations of AOA so that my multi-asset tracker reflects reality. It was through my most recent update that I discovered that the bond portion of AOA was a lot lower than it had been. ↩︎
  7. Namely the S&P500, the S&P MidCap 400, the S&P SmallCap 600, the S&P Developed Ex-U.S. BMI, and the S&P Emerging BMI ↩︎
  8. It’s still within the stated drift that XGRO tolerates, however. So maybe I’m overthinking this. ↩︎

Capped Index Funds: Good Idea?

RobHLeave a comment

One nagging concern I’ve heard about index investing1 is that you can end up overly concentrated in a handful of stocks. For example, as of today, per XGRO’s fact sheet, for every $100 I have invested in XGRO, I’m actually investing almost $5 between two companies, NVIDIA and Microsoft. And for every $100 I have invested in AOA, it’s $7 in these two companies. Although that sounds like it might be a significant concentration, I found a way to test the correlation using https://www.portfoliovisualizer.com/asset-correlations. As you can see, XGRO and NVIDIA are not terribly well-correlated:

Not very strong correlation between XGRO and NVIDIA

…even though perhaps I perhaps wish they were (sigh):

Wishing XGRO was more strongly correlated with NVIDIA…

Anyway, if you’re still not comfortable with having too much concentration in your holdings, there are ETFs that limit exposure to any one stock in an index. iShares launched an ETF last year that tracks the S&P 500 while limiting the contribution of any member of that index to 3%. That product is called XUSC, which serves as a complement to its XUS uncapped S&P 500 ETF2. So when you compare XUS’s top holdings to those of XUSC, you can quickly spot the difference:

Top HoldingsXUS (S&P 500)XUSC (capped S&P 500)3
NVIDIA7.86%3.49%
Microsoft7.09%3.12%
Apple5.90%3.07%
Amazon4%3.07%
Meta2.86%2.93%
Broadcom2.49%2.96%
Alphabet class A2%1.66%
Tesla1.73%2.05%
Alphabet class C1.63%1.35%
Berkshire Hathaway1.62%1.93%
Comparing top % holdings between XUS and XUSC as of July 2025

For the TSX, there’s not a full equivalent. The closest pairing for the TSX is XIC4 and XIU:

TickerIndexCapped?# of stocks
XICS&P/TSX Capped CompositeYes214
XIUS&P/TSX 60No615

XIC holds a lot more companies, and in addition to capping any single company, this has the effect of shifting the emphasis to smaller companies. So does this make a big difference in performance? Let’s check using this calculator.

So not much difference; over the past 5.5 years, we see a very slight edge to XIU, the uncapped TSX60 fund.

Whether the relationship between XIU and XIC will be the same as XUS/XUSC is anybody’s guess. In my own case, I don’t own the capped version of the S&P 500, but I do own XIC over XIU, mostly because of its significantly lower MER (0.06% versus 0.18% for XIU).

  1. And my biggest holdings (AOA and XGRO) are nothing more than a collection of index funds: S&P 500, TSX, MSCI EAFE… ↩︎
  2. There’s also currency-hedged variants of these, but I never bother with hedging, it just adds expense and tracking errors. ↩︎
  3. You may wonder why an ETF that advertises itself as capping components at 3% has components that exceed 3%. I also have this question. I suppose they probably only trade when the exception is maintained for a period of time, or perhaps by a more significant margin. Otherwise, they’d trade stocks that hovered around the 3% threshold excessively. ↩︎
  4. The “C” is either for “Capped” or “Composite”, you decide. ↩︎
  5. I can’t explain why a “TSX 60” ETF has 61 assets. Maybe they count cash as the 61st? ↩︎

Give more to charities, less to the CRA

RobH1 Comment

It’s probably not news to most of you that charitable giving in Canada attracts tax breaks that reduce your tax owing to the CRA. It’s a nice deal — support the causes that are meaningful to you while saving a bit of tax owed.

But for those of you with non-registered accounts holding stocks and ETFs, did you know there’s even a better option that can save you even more tax? By donating shares in-kind to your chosen charity, you get the same donation credit AND you avoid paying capital gains tax on the shares donated!

The differences can be sizeable depending on the unrealized capital gains you have in your portfolio.

Here’s a quick example: let’s say I bought $10,000 of XGRO1 5 years ago in my non-registered account. Per this dividend calculator featured in “Tools I Use” I see that it’s currently2 worth $15,850.

Say I want to donate $1000 to a charity — selling $1000 of XGRO today would generate a capital gain of $369. That’s taxable at 22.48% marginal rate in Ontario in 20253, so I have to pay an additional $83 in taxes4.

If I instead donate the shares in kind to the charity, I pay nothing on the capital gain, and I keep $83 either for me, or for additional charitable works.

So how do you do this? Well, it will depend on the online broker you deal with, but generally the steps are something like:

  • Let the charity know you’re intending to do this. Larger charities will have a published process, for example the Ottawa Food Bank’s is here5. Smaller charities can still benefit if you use a service like CanadaHelps6.
  • Let your broker know your intent. Every broker will have a different process, usually including some kind of form. Here’s some examples I found:7

And that’s it. The receiving charity will issue a donation receipt reflecting the market value of the donated securities for your tax filing. The nullification of the capital gain is done using form T11708 when it comes time to file your taxes.

I plan to do this more systematically for the charities I support; it’s admittedly a bit more effort than automated contributions. Since Questrade (my current broker) charges me $25 every time I do this, I’ll have to be a bit more strategic about amounts and timing.

  1. XGRO is a significant part of my portfolio, and as such it is included in my ETF all-stars page. What is also true is that I don’t hold much of it in my non-registered portfolio, but that’s just a historical investing habits showing up. ↩︎
  2. 5 year return, WITHOUT dividends reinvested as of July 17, 2025. Not reinvesting the dividends means my cost base is clearly $10k, useful for the example that follows. ↩︎
  3. Per https://www.taxtips.ca/taxrates/on.htm for taxable income between $114k and $150k. Don’t forget that capital gains are only taxed at 50% of the value of the gain. ↩︎
  4. Ignoring the tax savings generated by the charitable donation in the first place since that’s the same in both scenarios. ↩︎
  5. Googling “donate securities” <charity name> is helpful ↩︎
  6. They do keep a portion of the donation to offset their expenses, so it may not be a good idea for small donations. ↩︎
  7. Sorry Scotia iTrade users, I did my best but could not find their form. Let me know if it’s available somewhere and I’ll update. I’ve successfully used the process with both BMO and QTrade. ↩︎
  8. i’m not an accountant. Consult a professional if you have concerns. ↩︎

Review: Questrade

RobH3 Comments

I switched online brokers a few months ago to take advantage of Questrade’s bonus offer. The amount of money to switch was sufficiently attractive to tackle the not-insignificant hassle of going through with it1.

Shortly after getting started, I posted a short “unboxing” review, but now that I’ve been using Questrade for a few months I can provide a bit more detail.

It’s probably worth stating that my needs for an online broker are pretty simple and straightforward.

  • I hate paying fees.
  • I’m a buy-and-hold investor: I buy pretty much only what’s on my ETF all-stars list.
  • I hold USD denominated ETFs.
  • I need to easily (and preferably quickly) move money to and from my bank account. My “how I get paid in retirement” scheme necessitates at least monthly money moves.
  • I need a way to cheaply convert USD to CAD. Because I have a fair bit of retirement holdings in USD.
  • I need to be able to easily manage accounts that are held in my spouse’s name
  • I have a bunch of different accounts (RRIFs, Spousal RRIFs, TFSAs, non-registered accounts) and being able to quickly see which is which is highly desirable.
  • I’d like the ability to use a mobile app to do the tasks I need to do.

The TL/DR here is that Questrade meets my needs, but there is certainly a lot of room for improvement, especially in the domain of managing accounts for which you have been granted trading authority.

With that in mind, let’s see how Questrade stacks up.

Platform General Thoughts

I spend about half my time using the web interface2, and half using the mobile app. I have not bothered with the “desktop” app3 because I move from computer to Chromebook too frequently for that to be useful.

Questrade serves two rather different market niches. Investors like me are one, and high-frequency traders are another. There are two different web interfaces for these two audiences, called “My Portal” and “Edge Web”, respectively. I’d be happy to stick with “My Portal” (it’s the prettier interface) but am forced to use Edge Web in order to access accounts in my spouse’s name. The integration of the two is very clunky. Useable, but not pretty.

I’ve experienced a few issues with the web platform, and I don’t seem to be the only one:

  • There are random, reasonably frequent logouts (or partial logouts, where you can’t see any of your accounts)
  • Saving banking information for EFT deposit/withdrawal gets broken pretty frequently

The mobile app is more polished, but only offers a subset of the features of the web interface. Whether this impacts you or not will generally only be discovered when you want to do something and can’t find it in the mobile app. (e.g. currency conversion, accessing accounts your spouse owns). In my experience, lots of development time and effort goes into improving mobile apps, so shortcomings reported here may be gone by the time you try them out.

A quick word about security. Questrade offers the option to do 2FA using an authenticator app4 which I appreciate. Phone discussions with agents also rely on 2FA, but here you need to have access to your mobile phone since they only do SMS.

Fees: Excellent

Questrade charges no fees to buy or sell any stocks or ETFs. This is most excellent. They do charge a $9.95 journaling fee which is required in order to pull off a Norbert’s gambit but since this is not something I do frequently, it’s a small annoyance. It’s still way cheaper than converting USD to CAD using Questrade’s “Exchange” feature.

One quirk that I found annoying is that Questrade charges $25 if you want to donate shares to a charity. Seems a little mean-spirited, and discourages smallish donations, something I had been wanting to do.

And the other quirk is that there is no way to buy HISAs without paying a transaction fee. Of course there are substitute ETFs you can buy instead (e.g. CASH, HISA) but they skim off MER fees. That’s the main reason ZMMK and ICSH are now in my portfolio.

Trading interface: Meh

It works well enough, but it feels like I have to click around a lot to get things done. And there are some annoyances:

  • Good: The web interface allows you to automatically set a limit price equal to either the Bid or the Ask price, which is a nice touch. That’s not offered in the mobile app.
  • Bad: The interface won’t calculate the max number of shares of your chosen ETF you can buy with cash on hand5.
  • Bad: For margin accounts6 the interface favours displaying “buying power” over “cash on hand” which of course encourages margin trades. I suppose this is understandable, but not what I want to see.
  • Meh: for all the web space Questrade dedicates to fractional trading, none of the ETFs I routinely buy and sell are eligible for fractional trading7. This isn’t a big deal to me but figured I’d mention it since Questrade likes to promote this capability so heavily.

CAD/USD support: Good

Questrade’s accounts (e.g. TFSA, RRIF) allow you to hold both CAD and USD assets simultaneously. The interface is very flexible on how your assets are displayed in your accounts:

  • You can show JUST CAD assets by selecting “CAD” (and this hides the USD ones)
  • You can show JUST USD assets by selecting “USD” (and this hides the CAD ones)
  • You can show ALL your assets in CAD or USD by selecting “”combined in CAD” or “combined in USD”

Two things I have not tried

Moving Money: Good

Moving money between accounts and moving money to my USD and CAD bank accounts is easy with EFTs. I use Bill Pay from my bank account for TFSA contributions. All seem to work quite well, as long as the interface doesn’t “forget” your already linked bank account, which is a problem that’s cropped up a few times in the past few months.

Using trading authority: Terrible

Setting up trading authority in Questrade was a royal PITA…forms to fill out and upload, and then special enablement links, secret passwords…very labour-intensive. And then? From the web interface, you are forced to use the Edge Web platform if you want to trade on your spouse’s accounts. This interface hides the carefully crafted nicknames you’ve chosen in the “My Portal” view of things, so this is just barely usable.

You are also not able to move money involving your spouse’s accounts, even if the bank account is jointly held. This isn’t how my former provider (QTrade) handled things, and this feels like a significant downgrade.

If you use Passiv, it’s actually a much better view of you/your spouse’s combined accounts. Passiv Elite is moving behind the paywall of Questrade Plus, so you won’t be able to trade using Passiv unless you pony up for the subscription fee. But the combined view is nice, something you can’t get with Questrade’s own platform.

Forms: Meh

Although most of the forms are now done with (trading authority were the last ones I had to deal with), there are still forms for day to day management. RESP withdrawals for instance require a form. Searching for forms you need is reasonably straightforward but auto-population of form fields that Questrade knows (e.g. like account number, sometimes names/addresses) isn’t a thing. So it’s just busywork.

What’s nice is you can see the status of submitted forms from the web interface (not mobile) and you get prompt notification when forms are processed via email.

One big annoyance with the account setup process is that the automated emails generated by the document workflow do not reference the account number. So if you’re submitting multiple forms for multiple accounts, there’s no way of knowing which one is having a problem unless you log in to the web, and even then you are generally given a one liner description of the problem that may or may not be meaningful to you.

And you cannot submit forms on behalf of your spouse.

Support: Meh

Although I was initially excited about a support feature based on chat, the day to day use of it has been less than stellar. I always feel that the agents staffing chat are less knowledgeable. So now I rely on the phone when I need to talk to somebody.

Questrade Reserve exists if you have a larger balance and trade frequently which gives you access to a “better” support team. Although I don’t qualify since I don’t trade enough, I think I’ve somehow been included in this service. (It might be temporary, part of the transition time as Questrade Plus rolls out. I covered that here).

During their promo it was downright painful, to get a hold of someone, but in “normal” times it’s generally pretty easy to get a hold of someone who can help. Perhaps avoid calling during busy times of the year (promos, RRSP deadline, end of year).

Reporting: Meh

The Questrade built-in reporting is pretty basic, but it’s fine. I don’t really rely on it. The included access to Passiv is a much better tool for visualising your portfolio across multiple accounts. QTrade (my former broker) had much better tools in this domain.

All in all, the money involved with making the switch more than outweighs the new annoyances I have to deal with. I have found the Questrade subreddit a good place to keep tabs on what’s going on at Questrade. Questions? Your thoughts? Let me know at comments@moneyengineer.ca.

  1. As a retired person, I don’t pull in a traditional salary so I look at form-filling for cash as a way to contribute to our household’s net income. ↩︎
  2. Various browsers, various platforms with no real discernible difference in user experience. There are actually TWO web interfaces that are jerry-rigged together — the pretty one (Portal) and the “powerful” one (Edge). ↩︎
  3. AKA “Edge Desktop” per https://www.questrade.com/self-directed-investing/active-trader#advanced-platforms-and-tools ↩︎
  4. Including MS Authenticator, Google Authenticator, Apple’s Passwords ↩︎
  5. Unlike Wealthsimple. ↩︎
  6. And I had to open margin accounts in order to get a joint non-registered account with Questrade. On my to-do list is to see whether I can convert them to non-margin joint accounts or not. ↩︎
  7. Unlike Wealthsimple, if you’re keeping score ↩︎
  8. And it looks like you CANNOT convert between USD and CAD from the mobile app. Annoying. ↩︎