“Fractional Shares” allow you to buy less than a single share of the stock or ETF that supports it. Fractional shares ensure that every last penny of cash in your account is actively invested, which, in my view, is a Good Thing. Non-interest earning cash isn’t helping you meet your retirement goals.
Questrade currently holds the majority of my retirement savings, mostly because they were offering free money last year to move accounts over to them1.
They provided support for fractional US ETFs over a year ago, to great fanfare, with Canadian ETFs “coming soon”. It would appear that “soon” is “now”. There’s no way to see which Canadian ETFs have support for fractional trading in any sort of list, but here’s the status of the Canadian ETFs on my magnificent seven ETFs list2, which you can see if you ask for a quote of any symbol you’re interested in.
I’ve tested it out, and the one flaw I’ve found is that you cannot enter a dollar amount for a trade when using the Edge Web version of the Questrade platform. You’re free to do the math yourself and enter a decimal number of shares when using Edge Web4.
Wealthsimple also offers fractional ETFs, and there I have found no restrictions. Questrade is catching up, but still behind Wealthsimple in this regard.
And if you are considering Questrade yourself, you can earn a bit of free money if you use my referral code: 755609544498867 ↩︎
These are the ETFs that make up the lion’s share of my retirement portfolio. ↩︎
Fractional VFV is particularly valuable since its unit cost is north of $100. ↩︎
Which you are forced to do if you want to make trades on accounts for which you are the authorized trader. ↩︎
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, so that’s a good trigger to update this post. On June 30 before the markets opened, this is what it looked like:
The portfolio is dominated by my ETF all-stars, (and if not an all-star, they are probably on the Magnificent Seven ETFs list). But the observant reader will start to see some changes from last month as my strategy to Kick USD out of my retirement portfolio starts to take effect. The contributions of AOA and ICSH (both USD funds) to my retirement portfolio are notably down and SCHF has disappeared entirely — SCHF was the last bit of USD in my non-registered accounts. ZMMK, XGRO and VCN, on the other hand, have gained in importance to make up for the USD-denominated departures. And ZST (ultra short-term bond fund) and VFV (S&P 500 US Index fund) have begun to make an appearance; you’ll see more of these funds in future months. My ETF all-stars post has been updated accordingly.
Plan for the next month
The asset-class split looks like this; you can read about my asset-allocation approach to investing over here.
The moves I made to start reducing USD in my portfolio have quickly allowed me to get to my recently revised target allocations I have for each asset class:
5% cash or cash-like holdings like ICSH and ZMMK
15% bonds/income (most are buried in XGRO and AOA, rest are in XCB)
23% Canadian equity (mostly based on ETFs that mirror the S&P/TSX — HXT and XIC); this is up from the old 20% target
37% US equity (dominated by ETFs that mirror the S&P 500); this is up 1% from the old target
20% International equity (mostly, but not exclusively, developed markets); this is down 4% from the old target
With the asset class splits under control, next month will see more moves to get rid of USD in my portfolio. There’s only USD in my RRIF accounts now, all invested in AOA and ICSH. These positions will be reduced by 1/6th in July as my target is to be fully USD free by the end of the year.
My timing for starting the conversion looks to have been pretty decent; the USD/CAD rate moved significantly in my favour this month. I don’t expect that to last!
Overall
Part of using VPW1 as a strategy is the need to calculate your retirement net worth on a monthly basis. And once again, a new all-time high:
My VPW-calculated salary continues to increase, albeit at a more modest rate, as expected.
Variable Percentage Withdrawal, my chosen decumulation strategy. ↩︎
As a self-directed investor, it can be challenging to avoid the constant noise of the latest and greatest moves in the industry. A sample of the kinds of things that have landed in my inbox lately will hopefully illustrate this point:
“Single stock SpaceX ETFs are coming”
“This 11% dividend is a screaming deal”
“This divvie is the ultimate ‘pick and shovel’ play on Elon, Inc”
“Should we have sold in May and walked away?”
The noise is nearly impossible to avoid; there always seems to be one company, one trend, one segment, one market, one product that’s just booming while your portfolio languishes.
What’s the reason this is so? Beyond the need for news sources to produce content, I mean? A peek at Blackrock’s “periodic table“1 of market performance gave me an answer, maybe.
This table illustrates the performance of thirteen segments of the market on an annual basis. What is evident is that the “hot” segment keeps changing. What was hot last year rarely repeats this year. Take for example this year’s darling, Commodities. This index can be found over at https://www.investopedia.com/terms/c/crb.asp and tracks (among other things) the price of oil, gold, copper, wheat…and I’m sure you’ve noticed the recent uptick in ETFs covering this space (or a subspace):
GlobalX has three new silver-focused ETFs (SLVX, SVCC, and SVCL) and three commodity producers ETFs (COMX, CMCC and CMCL)
BMO launched a covered call gold bullion ETF (ZWGD.T) and a hedged broad commodity ETF (ZCOM.F) this year
TD launched TCOM which looks like it’s achieving exposure to broad commodities markets through swaps and derivatives2
My sense is that all of these ETFs were launched in an effort to attract FOMO investors who are trying to ride the commodities wave this year. Commodities as a category aren’t a terrible thing to invest in, as the Annualized column shows — they have actually performed pretty decently over the past decade — but still behind US Equity, Emerging Market Equity, Japan Equity and European Equity indices.
There’s always going to be some segment that’s on fire in a given year. Predicting which segment that might be isn’t consistently possible, so my advice is to ignore the noise and don’t chase the latest shiny object. Over long periods of time, it’s hard to beat investing in boring index equity funds.
After much consideration, I’ve decided that holding USD-denominated assets during retirement is no longer a good idea. I have been struggling with this question for a while now.
There are a few reasons why I’ve reached this conclusion:
I no longer spend USD. I have two credit cards1 that allow me to avoid foreign exchange fees.
Complexity. The USD in my RRIF accounts needs to be converted periodically since withdrawals are in CAD. The USD in my non-registered account might eventually lead me to have to file a T1135, and I hate new tax wrinkles. And of course the USD funds add to the universe of funds I have to manage in all the accounts. Fewer is better!
Choice. Without USD in my portfolio, the universe of DIY brokers opens up2 and the number of accounts I have to have is also reduced34.
The fluctuating CAD/USD FX rate might be another reason, but that hasn’t really bothered me. In the long term, it’s reasonably stable.
So how to go about doing it, and what impacts will this have? Let’s take a look.
General considerations
So of course, the only real way to convert USD into CAD at Questrade is to use Norbert’s Gambit. Performing the Gambit is a multi-day activity:
Day 1: Sell the USD asset and buy DLR.U with the proceeds; make journaling request to convert DLR.U into DLR
Day 2: Wait for settlement of trades made on day 1
Day 3: Wait for journaling to complete
Day 4: Wait for journaling to complete
Day 5: Sell DLR and buy CAD-listed assets to replace what I sold on day 1
Each time I do this exercise, it makes me a little leery since
I have to pay $9.95 plus GST to journal the shares on Questrade (not a huge deal, but as you have read elsewhere on the blog, I am a cheapskate)
I’m out of the market for 3 days. I really hate being out of the market since big moves can happen over short periods of time. Of course, this cuts both ways; I could miss a big rally or a big meltdown as a result5.
I’m making a bet on favourable FX rates. FX rates don’t typically swing much in short periods of time, but since over 50% of my retirement portfolio is in USD I’m not willing to try to find the “right” time to make such a trade.
As a result, I’ve made the decision to
Sell off 1/6th of my USD portfolio every month for the next six months (or thereabouts). This will allow me to smooth out any FX speed bumps and limits how much of my portfolio is idle at any one time.
Take advantage of a free month of Questrade Plus6 and do a few journaling requests during this month and save a few bucks
I’ll try to start moving my portfolio to these new targets as I make this shift, but given the targets are brand new, I’m in no particular time constraints; I’m expecting the portfolio to slowly move from the old targets to the new ones, finally landing at some point later in 2026.
Kicking USD out of my RRIF accounts
Of the 5 RRIF accounts I have in the household (three for me, two for my spouse), only two of them have USD in it, and the USD portion is 100% invested in either AOA (an 80/20 all-in-one global equity fund) or ICSH (an ultra short-term bond fund that stands in for cash)
AOA can be replaced with XGRO but it’s not an exact replacement. AOA has almost no Canadian Equity content and a higher US Equity content than XGRO. This means that a one-to-one switch will cause my Canadian Equity content to increase and my US content to decrease. I’m expecting this will eventually cause me to need to replace some of my AOA with a pure play US Equity asset. I’ve chosen VFV since it mirrors the S&P 500, an index that won’t be adding the mega-IPOs any time soon 🙂
ICSH can be replaced with ZMMK since they are similar in nature, but I’m not going to do that. Why? Because I hold ZMMK in my non-registered account as a VPW cash cushion, I do make trades in ZMMK from time to time. I don’t want to end up in a situation where I’m selling ZMMK in my non registered account and buying it in my RRIF, since this could deprive me of possible (small) capital losses — CRA does not look kindly on trying to “artificially” generate capital losses in this way.
So after mulling it over a bit, I’ve decided to replace ICSH in my RRIF accounts with ZST. It’s a short term bond fund which is a bit riskier than ZMMK7, but I’m counting on it being cash-like for my purposes. Neither has been around all that long, but it appears they are pretty close on the performance front with a slight edge for ZST.
So when all is said and done, my RRIFs should have three holdings: XGRO (mostly), VFV (some), ZST (about 2.5% of overall portfolio),
Kicking USD out of my non-registered accounts
Here there are two holdings
ICSH in my VPW cash cushion account
SCHF, an international equity fund I’ve held for years and years
The ICSH replacement is easy — move it to ZMMK. I’ll do that all at once. It will mean a loss of over a percentage point in gains at the moment, but this is the price of simplicity, I guess.
The SCHF sale is a bit like selling 6 months of RRIF payments all at once, which will attract a capital gain. I’m ok with that, but I’d prefer to avoid more capital gains for the rest of the year (I didn’t budget for that when I tried to work out my likely tax bill for 2026). Since selling SCHF is actually helpful in getting my new asset allocation targets right, I don’t need to replace it with another International Equity fund. My calculations tell me that I’ll probably need to replace it with a Canadian Equity fund. Here I’ve chosen to use VCN since it uses a different index provider8 and would be considered different from my other non-registered Canadian equity funds, namely XIC and HXT9. Buying VCN and selling it in subsequent months to fund my retirement salary should result in minimal capital gains for the remainder of the year.
So when all is said and done, the VPW cash cushion account should be 100% ZMMK and the other non registered account will be 100% CAD-listed ETFs, mostly tied up in Canadian Equity.
This Friday (June 12, 2026) SpaceX (which, as it turns out, doesn’t just make rockets — it also encompasses Starlink and Twitter — er, X) will launch its mega-IPO. It’s expected to immediately become a top 10 company in terms of market capitalization, putting it in the same stratosphere as Nvidia, Apple, and Microsoft.
There’s a lot of chatter over how (and even if) this will impact the boring old index investor. It might help to review what the major US Indices are. The major US indices1 that show up again and again in ETFs are
S&P 500 — this is the index used by ETFs like VFV, XSP, ZSP and HXS
CRSP US Total Market Index — VUN, VUS and VEQT for example
The ETFs that track indices don’t have discretion over when or if to include a stock in their ETF. When the index changes, so does the ETF. It’s totally mechanical. The indices also have published rules on how and when to include stocks, but because SpaceX is anticipated to be so exceptionally large, there was pressure on the index providers to tweak their rules to make sure SpaceX was included. If you’re keeping score, only Nasdaq made changes to accommodate SpaceX. S&P did not.
After much anticipation, here’s the state of play as of June 9, 2026:
Many of the indices use the float-adjusted amounts; this means a lower weighting for SpaceX than its full market-cap, which means a lower weight in any index that uses float. In the coming months, I’ll take a peek at how much SpaceX I hold, and how it’s changing, just for my own education.
So, for me, it looks like I’ll be owning some SpaceX in the not-too-distant future since the vast majority of my US holdings are in XEQT/XGRO/AOA. And, the odds are, it will lose value post IPO. That kinda sucks.
Of course, as BMO correctly points out, nobody will be immune from this kind of market movement — why, you may ask? Given SpaceX is going to be included in the popular Nasdaq 100, funds that mirror this index are going to have to make room for the new arrival, selling off shares of things they already hold, like Nvidia, and Microsoft. This will create downward pressure on the prices of these tech stocks, and hence it will also create downward pressure on any ETF that also holds Nvidia, and Microsoft. The S&P 500 holds many of the Nasdaq 100 companies, so you can expect some price erosion of ETFs mirroring the S&P indices as the Nasdaq ETFs do their rebalancing act.
In the grand scheme of things, I don’t think I really care. I don’t love SpaceX, or any other stock for that matter. The S&P indices have historically rewarded the patient investor, and I see no reason to change my strategy based on one IPO, no matter how splashy. It won’t be the last — both Anthropic and OpenAI are probably close behind with their IPOs.
The small cap Russell 2000 is also popular, but I don’t mention it in the main list since SpaceX is too big to be a small cap ↩︎
This is a CAD ETF and holds things beyond “just” the S&P index. See more here. ↩︎
This is a USD ETF, and holds things beyond just the S&P index. See more here. ↩︎
The most famous Nasdaq 100 ETF trades in USD and is QQQ. This would explain the not-very-original names chosen by the Canadian management companies. ↩︎
I think only TD uses this one, but since I’ve written about TEQT in the past, I figured I’d include it. ↩︎
and likely longer, since there is a profitability screen imposed as well for inclusion in the S&P 500 ↩︎
Over time, the size of the SpaceX float is expected to increase as insiders unload their shares; the timing of this is not known. I’d expect the SpaceX % to increase over the first year of inclusion on the S&P Total index. ↩︎
