Category: ETFs

abundance of food on table

What’s in my retirement portfolio (October 2026)?

RobHLeave a comment

This is a monthly look at what’s in my retirement portfolio. The original post is here.

Portfolio Construction

The retirement portfolio is spread across a bunch of accounts:

  • 5 RRIF accounts
    • 3 for me (Questrade, Wealthsimple)
    • 2 for my spouse (Questrade)
  • 2 TFSA accounts (Questrade)
  • 4 non-registered accounts, (1 for me, 1 for my spouse, 2 joint, all at Questrade)

The view post-payday

I pay myself monthly in retirement, and the charts that follow reflect the view post-payday, which happens around the end of the month. On October 29th after the markets closed, this is what it looked like:

The portfolio is dominated by my ETF all-stars, aka the Magnificent Seven ETFs list.

This is pretty much the same chart as last month. I’m sort of expecting that to be the case month-to-month. Every month there are small reductions in my XGRO position1 since that’s what I sell to make my monthly RRIF payments. There are slightly larger reductions in the non-registered part of the portfolio to pay my salary, but their contribution to the overall picture is pretty negligible. HXT is the largest non-registered holding I have now, followed by ZMMK and XIC. Everything else you see on the chart above is either in my RRIF or my TFSA.

My asset allocation targets are unchanged, namely:

  • 5% cash/ultra short term bonds
  • 15% bonds
  • 23% Canadian Equity
  • 37% US Equity
  • 20% International Equity

The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.

This chart is an almost-perfect reflection of my asset targets, with all categories within 0.5% of the intended allocation.

Plan for the next month

Nothing looming; no planned changes. My spouse’s RRIF is 0.24% larger than mine, which is a tiny improvement over last month; ideally the values of our RRIFs would be equal so we withdraw the same amount and draw the same RRIF salary. Makes things a bit easier to plan.

I have been looking again at perhaps moving XGRO over to ZGRO.T to take advantage of ZGRO.T’s automated payouts, which would simplify my monthly RRIF routine considerably. Unless I can be reasonably sure ZGRO.T will generate enough income on a monthly basis to fully cover my foreseen monthly payouts, there’s really no compelling reason to do that.

Overall

Part of using VPW as a strategy is the need to calculate your retirement net worth on a monthly basis. My net worth took a small hit this month, but the trend remains positive overall:

My VPW-calculated salary has now increased for 10 straight months; it’s nice getting a monthly raise! I should start to see the salary flatline if the net worth remains flattish (as it has for the past 6 months now).

  1. And 4 times a year, that reduction is VERY small since XGRO pays quarterly dividends which are by default used to purchase more of the same. ↩︎
yellow and white car drifting on road

Bank of Canada Up, US Fed Flat

RobHLeave a comment

Both the Bank of Canada and the US Fed announced their interest rates this week.

In Canada, the rate was bumped up for the first time in quite a while: it’s now a quarter point higher than it was previously, at 2.75%.

In the USA, the rate held steady, with a target in the range of 3.75 to 4.00%.

The only reason this is of any interest to the average DIY investor is that these rates tend to influence the kinds of interest you can earn using HISA (High Interest Savings Accounts). I’ve updated the HISA and short-term bond table (Canada & US) to reflect the new realities; the rates usually take a few days to be updated.

One more meeting for each entity this year, on December 9th.

hill on desert

News: Canadian Financial Summit Kicks Off Tonight

RobHLeave a comment

The annual Canadian Financial Summit starts this evening, and if last year’s event is any indication, it will be a mixed bag: some really good content, and some barely-concealed sales pitches. And, no, I didn’t get a speaking slot 😉

And the best part is, it’s totally free — the summit really pushes their all-access pass, but if you have some spare time over the next few days, you can see most of the content before it goes behind the paywall. All you have to do is register.

The speakers lineup includes certified all-star, the “retired” Rob Carrick. He always has useful information to share. I see BMO has made a bigger splash this year — among Canada’s big banks, they really do have some decent ETF products1, and their speakers are all coming from that side of the business, so that’s a session I’ll definitely check out.

If you attend, let me know what you thought was the best session, I’m always interested in what my readers find useful: you can reach me at comments@moneyengineer.ca.

  1. I hold ZMMK and ZST. ↩︎
illustration of credit concept with money

The bond portion of my portfolio

RobH2 Comments

I’m a bit curious as to what’s under the hood of the category I refer to as “bonds” in my portfolio. I try to keep the level at 15% of my retirement net worth. Bonds have historically acted as a volatility reducer at the cost of overall performance. You can see that pretty clearly by comparing the performance of XEQT (100% equity) with XGRO (which holds the same equity funds, but less of them to make room for 20% bonds).

The drag on total return is pretty clear. And for this reason, 15% bonds is enough for me; adding to this is the other 5% of my portfolio which I call “cash” but is also actually very short term bonds.

But what kinds of bonds do I actually hold? I’m most interested in understanding a few parameters:

  • What kind of interest are they paying?
  • What is the duration of the bonds I hold? “Duration” means “when are these loans due”? The further in the future the loans are due, the more the bonds are impacted by changes in interest rates.
  • What’s the quality of the bonds I hold? “Quality” means “how creditworthy are the entities I’m loaning my money to”? Lower credit rating means higher yields, but greater risk of default. The least creditworthy are usually called “junk” bonds. The lower the credit rating, the more the bond begins to look like an equity ETF, with volatility to match. That’s not really what I’m looking for.

So the first thing to figure out is where my bonds are. Looking at my handy dandy asset tracker, (download a template here), I can check on my overall retirement allocation by ETF:

So from memory, I know that my bonds are held in XGRO (20% of that fund), and XCB. Let’s take a look at XGRO first. Heading over to the ETF fact sheet, you can quickly see what’s inside:

So to get to the bottom of this analysis, I have to look up what’s inside each of XBB, XSH, GOVT and USIG. I also hold XCB which is not a fund of funds, and by referring to its fact sheet so we can easily add construct the table below:

ETF symbolNamePercentage in portfolio Current yieldWeighted avg maturityQuality
XBBCanadian bond universe6.56%3.55%9.4 years89% A or above
XSHCanadian short term corporate bond1.55%4.01%3.24 years57% A or above
GOVTUS Treasury Bonds0.99%5.04%7.44 years100% A or above
USIGUS Broad investment grade0.98%5.97%9.70 years50% A or above
XCBCanadian Core Corporate4.4%4.26%7.96 years56% A or above
total/ weighted average14.5%4.08%8.18 years74% A or above

So a few comments on the results:

  • The percentage of bonds is actually sitting at 14.5%. I don’t track how closely XGRO keeps to its 20% target, I just assume that on average, that’s where it will be. But this calculation shows that there’s a bit of drift.
  • The Current Yield is as of October 14, 2026.
  • The weighted average maturity is meaningful because the longer the duration here, the more sensitive the bonds are to interest rate changes. 8 years isn’t super long, but in a rising interest rate environment, these holdings will suffer.
  • The quality is universally pretty high, with 75% rating A or above.
  • Missing in action are any bond holdings outside of the US and Canada, and even the US exposure is quite small.

My impression overall is that my bond holdings are quite conservative. Which I suppose is what they should be, but I am a little surprised how little the overall picture looks from what I consider cash, namely ZST. Here’s the table again, comparing my average bond holdings to ZST/ZMMK.

ETF symbolNameCurrent YieldWeighted avg maturityQuality
Average of bond holdingsXBB/ XSH/ GOVT/ USIG/ XCB4.08%8.18 years74% A or above
ZMMKMoney market2.38%0.22 years100% A or above
ZSTUltra short term2.59%0.36 years71.5% A or above

So here you see the improved yield picture compared to my “cash” holdings, which looks a bit better. I suppose I could look into adding some lower quality bonds1 to goose the yield a bit, but I’m not so keen on expanding the number of ETFs I hold. Less complexity is better than more, right?

  1. For example, ZJK (great ticker symbol, by the way) invests in much lower quality bonds. ↩︎
salesman discussing real estate to a senior couple

What’s it cost to manage your own retirement?

RobH2 Comments

One of the big reasons I became a DIY investor in the first place was to stop paying the typical 1% to 2% annual charges professional money managers charge.

Now before you start scoffing at “small” numbers like 1%, you have to consider a few things

  • 1% of one million dollars1 is $10,000. Retirement savings generally involve relatively large numbers, and small percentages translate into large real dollars. The lineups I see at the gas pumps to save a buck or two on a tank of gas tell me that real dollars are generally more meaningful to people than percentages.
  • Compound interest. Throwing away $10,000 on management fees every year means you’re $10,000 poorer every year. Fast forward ten years at an assumed 6% rate of return, and that $10,000 annual hole turns into (roughly2) ~$135,000 hole
  • …and the most annoying thing? A 100k portfolio is charged the same percentage as a $1M portfolio, meaning the $1M portfolio attracts 10x the fees of the 100k portfolio. Is the $1M portfolio ten times harder to manage? No!

But ok, even a DIYer doesn’t invest for free.

  • If you hold any kind of asset, there’s potentially3 commission fees every time you buy and sell
  • If you hold ETFs (as I do) then the FER4 will cost you, although not explicitly. FERs kick in before you see your own returns.
  • You might pay interest if you borrow money to trade (aka using margin)5
  • You may pay FX fees if you trade in currencies other than CAD6

So let’s look at what my retirement portfolio is actually costing me. For me, that’s now down to FER costs. Using my latest What’s in my retirement portfolio? article, it’s easy enough to calculate. I track in real time how much of each asset I hold, so by looking up the FER and multiplying by $1,000,000, you can get the annual cost :

It’s a bit higher than I expected, admittedly. $1902 is a far cry from the $10,000 I talked about earlier, but it’s not nothing.

I wonder what my rock bottom costs would be? If I were to eliminate all-in-ones (which are convenient, but costly) and just focused on 5 funds, one for cash, one for bonds, one for Canadian equity, one for US Equity and one for International equity, what would I end up with given my asset allocation targets? Here’s that table:

I chose ZAG over XCB because ZAG is a broader bond fund than XCB and diversification is good. I use XCB today because I get broad bond exposure via XGRO. I picked ZST over ZMMK for this exercise, but in reality I would probably still hold ZMMK and ZST in equal proportion. That would lower my overall costs ever so slightly.

I suppose this experiment shouldn’t surprise me: I covered the costs of all-in-ones in a previous post. But this shows that I could cut my annual costs in half should I choose to forgo the convenience of XGRO and XEQT. XGRO would be hard to give up because it makes managing my RRIF accounts (the only place I hold XGRO) much easier. I only sell XGRO to cover my RRIF minimums at the moment, no decisions necessary.

But XEQT I only hold in my long-duration7 TFSA account. There I could possibly make the switch with no real impact other than reducing my fees by about 0.01% or $100 on a million. Something to think about. What about you? Do you pay close attention to MERs/FERs of assets you own? Let me know at comments@moneyengineer.ca!