Category: Uncategorized

What’s a good strategy for non-registered investments?

RobHLeave a comment

I got an email this week from a reader (who contacted me via comments@moneyengineer.ca, I read all my email) who was asking about ideas for non-registered investments after the tax-advantaged accounts (e.g. TFSA, RRSP) have been maxed out.

I too was in this happy predicament a number of years ago, and some of was, admittedly, a bit ad-hoc. I know a bit better now.

The first thing I’ll mention is that my non-registered holdings are 100% equity1; I don’t see the point in generating interest income since it’s taxed at your highest marginal rate. Interest bearing investments are better off in your RRSP or TFSA, in my view.

The second thing I’ll mention is my non-registered assets are held across TWO non-registered accounts, one in my name, one in my spouse’s name. Since my spouse made less money than I did (and hence lived in a lower tax bracket), I set her up with an investment loan as a form of rudimentary tax splitting.

Lastly, most of my holdings here are in a capital gain situation. There’s no opportunity for tax-loss selling, no opportunity to offset capital gains. That’s just the reality of being a buy and hold investor.

Here’s what the non-registered portfolio looks like (minus the cash cushion2, since those investments don’t really fit the criteria of the initial question):

So what have we got under the hood?

HXT, HXS, HXDM: Horizons “Corporate Class” ETFs

These refer to HXT, HXS, and HXDM, which track Canadian, US, and International equity indices, respectively. These three funds make up about 35% of my non-registered investments. Under the hood, they are structured in such a way as to avoid paying out dividends and income, instead burying that income in the per unit price of the ETF3. This works pretty well. Here’s what HXT versus XIU looks like, which both track the Canadian S&P/TSX 60 index.

As you can see, the total return is practically identical assuming all dividends thrown off by XIU are reinvested4. I see these Horizon funds as a way to potentially reduce your current tax bill. Even though Canadian dividends get special tax treatment, these may not apply to your particular tax situation if you are in a high enough tax bracket. If this is the case, deferring tax on dividend income (by buying HXT instead of XIU) may pay off later in life when you instead have to pay tax on capital gains and are potentially in a lower tax bracket.

The Horizons funds are also good choices for the lazy investor who doesn’t like keeping track of ACB; since there are no dividends to reinvest, there are no new unit purchases happening every quarter. (Of course with a tool like adjustedcostbase.ca, tracking your ACB is quite straightforward).

XIC: A Solid Canadian Equity Fund

XIC creates low-cost exposure to the total Canadian Equity market. It’s different from the aforementioned HXT because it generates dividends, and instead of just covering the largest 60 Canadian companies, it covers the whole Canadian market.

SCHF: A very low-cost international fund in USD

I have a lot of investments in USD. One of the big reasons was the MER of an ETF like SCHF. Yes, 0.03% for a basket of international stocks, which is lower (far lower) than any Canadian ETF out there. It’s still hard to beat the rock-bottom fees of some of these large US funds. So if you have access to USD, and don’t mind the complexity (and added FX volatility) of dealing with USD, it’s another solid way to round out your international holdings. VT (global fund) and VTI (total US market) are also frequently cited by index investors for this reason.

TEQT, XEQT, ZEQT: All-in-one 100% Equity funds

These are a small but growing portion of my non-registered holdings. “Growing” because free money delivered by Questrade (a new client bonus) has to go somewhere. XEQT I’m not adding to because I like to hold different ETFs in non-registered and registered accounts to avoid any “superficial loss” problems with the CRA. ZEQT and TEQT are both solid 100% equity with slightly different proportions of Canadian/US/International equity.

  1. It wasn’t always true, but it is now. ↩︎
  2. The cash cushion is a third non-registered account that holds income investments (ZMMK and ICSH) which smooths out my monthly salary. You can read about how I decumulate my holdings over here. ↩︎
  3. I’ll reiterate: the only thing I care about is TOTAL growth. Dividends or unit price growth, it makes no difference to me. ↩︎
  4. And hopefully also clear by comparing the two charts is that XIU generated about $9000 in dividends during the 16 year backtest period. ↩︎

XEQT, TEQT, VEQT, ZEQT, HEQT Fee Showdown

RobHLeave a comment

Summary: Although iShares(XEQT/XGRO) and Vanguard(VEQT/VGRO) get all the love, the all-in-ones from BMO and TD are actually the current winners in the “lowest all-in-one fee award”. Given how similar they are to their competitors, I see no reason not to park money there.

I’m a fan of all-in-one1 ETFs in my retirement portfolio. If you’re new to the world of all-in-ones, you might want to start here. There’s at least five competing families of products out there, courtesy of iShares (XEQT, XGRO, XBAL et al), TD (TEQT, TGRO, TBAL et al), Vanguard(VEQT, VGRO, VBAL et al) BMO(ZEQT, ZGRO, ZBAL et al) and GlobalX2 (HEQT, HGRO, HBAL et al). We’ve taken a look at some of them “under the hood”, so to speak, but didn’t really find super-significant differences.

One facet I haven’t looked at yet is the fees each of these companies charge. As I’ve shown elsewhere, small differences can add up if you have significant investments or are holding them for a significant time.

With the news that iShares is reducing their management fees, (BMO did earlier this year) I figured it was time to do a head-to-head fee comparison for the four major families.

Here you have it:

CompanyRelevant TickersManagement Fee3
iSharesXEQT, XGRO, XBAL et al0.17%, effective Dec 18, 2025
VanguardVEQT, VGRO, VBAL et al0.17%
TDTEQT, TGRO,TBAL et al0.15%
BMOZEQT, ZGRO, ZBAL et al0.15%
Global XHEQT, HGRO, HBAL et al0.18%

TD and BMO are the low fee winners at the moment, but the gap has narrowed significantly from earlier in the year. I like low fees, and so I’ve started to invest in these families.

  1. Technically called “asset allocation” ETFs, which is good, since asset allocation is how I view my own portfolio. ↩︎
  2. Formerly known as Horizons, which explains the stock tickers used here. ↩︎
  3. Most of the time I use MER (Management Expense Ratio) to report on fees, but since a few of these companies have lowered their Management fees this year, and since MER is only calculated annually, the MER values only become relevant again on Jan 1. They are a few basis points higher than the management fee, but just a few. Most of the cost is buried in the management fee. ↩︎

News: HISA Table updated, TD adds free-to-trade ETFs

RobHLeave a comment

High Interest Savings Page Updated

As reported last week, the USA cut their prime rates while Canada did not. The latest rates are now reflected in the HISA and short-term bond table (Canada & US). No changes for at least 6 weeks at this rate. Most cash I hold in my retirement savings is invested in an ultra-short-term bond fund, namely ICSH (one of my ETF all-stars) so I can squeeze out a few more basis points on my cash holdings.

TD Cuts Trading fees on 100 ETFs

TD seems to be upping its game. Not only are they throwing free money around, but an observant reader (thanks, big brother 🙂 ) alerted me to a recent change. You can read all about it here, but the skinny is that they cut trading fees on a list of 100 ETFs. Paying trading fees of any kind seems to be a dying business model, so it’s nice to see TDDI join the free club, at least a little bit. Some of these ETFs are even worth holding; I’ll save you the trouble and show you which ones:

NameSymbolWhat it holds
Vanguard S&P 500 IndexVFVLargest US Companies
SPDR S&P 500SPYLargest US Companies in USD
Vanguard 500 IndexVOOSame as SPY
iShares Russell 2000IWMSmall cap US Equity in USD
TD all-in-onesTEQT, TGRO, TBAL, TCON100% Equity, 90% Equity, 60% Equity, 30% Equity. Read more here and here.
TD Aggregate Bond IndexTDBCanadian gov’t and corp bonds.1
TD International EquityTPEDeveloped international market equity.2
TD US EquityTPU/TPU.USimilar to VFV/SPY3
TD Canadian EquityTTP300 Canadian stocks (aka “the Canadian market”)4
TD Cash Management TCSH/TUSD.UUltra short term debt in CAD/USD5
Vanguard all-in-onesVEQT, VGRO, VBAL, VCNS100% Equity, 80% Equity, 60% Equity, 40% Equity
Vanguard Canadian Agg BondVABCanadian gov’t and corp bonds6
Vanguard FTSE GlobalVXCAll equity ex-Canada (65% US Equity)
Vanguard FTSE DevelopedVIUAll developed equity ex-North America7
Vanguard US Total MarketVUN/VTI~3500 US Stocks in CAD/USD (aka “The US Market”)8
Vanguard FTSE Canada VCNTop 200 Canadian Stocks, so similar to TTP9
Newly free-to-trade ETFs at TDDI that are moneyengineer.ca approved

All the above funds would be worthy of consideration since they adhere to my rules about being passively managed, low cost, and aligned with my asset-allocation strategy. The simplest purchases here would be one of the TD or Vanguard all-in-ones (new to all-in-ones? read about them here) best aligned with your risk profile. There’s a bunch of other ones that aren’t of interest to me — bitcoin, leveraged, actively managed, segment-based…nah, I’m good.

  1. Used in TGRO, TBAL, TCON ↩︎
  2. No “emerging” market exposure. Used in TEQT, TGRO, TBAL, TCON ↩︎
  3. TPU is used in TEQT, TGRO, TBAL, TCON ↩︎
  4. Used in TEQT, TGRO, TBAL, TCON ↩︎
  5. Similar to my use of ZMMK/ICSH ↩︎
  6. Used in VGRO, VBAL, VCNS ↩︎
  7. Used in VEQT, VGRO, VBAL, VCNS ↩︎
  8. Used in VEQT, VGRO, VBAL, VCNS ↩︎
  9. Used in VEQT, VGRO, VBAL, VCNS ↩︎

What’s in my non-registered portfolio? (Oct 2025)

RobH3 Comments

Every month, I try to share with you what’s in my overall retirement portfolio (September 2025 post is here). That retirement portfolio is actually distributed over a bunch of accounts held by me and my spouse and includes RRIFs, TFSAs and non-registered accounts. This is what it looks like at the moment:

Retirement savings as of October 1, 2025 by account type

(My multi-asset tracker is a handy tool to help you quickly create charts that look like the above one).

My current strategy for these three account types looks like this:

  • RRIF: This is 100% invested in my ETF all-stars. I’m currently withdrawing RRIF minimum payments for two main reasons:
    • To avoid problems with attribution. I cover that topic over here.
    • To avoid withholding tax. RRIF minimum payments don’t attract withholding tax, but I am setting aside some of my payments to deal with the unavoidable tax bill come April 2026. I talked about that topic over here.
  • TFSA: This is mostly invested in the ETF all-stars, but there’s a few stragglers in here1 that I really ought to get rid of. Nothing wrong with the funds in there, but it’s a needless complexity. The TFSA continues to get new funds since it’s hard to beat tax-free growth, and I only buy all-stars with those funds. It will get drawn down last in my retirement planning.
  • Non-registered accounts: Here it’s a bit of a dog’s breakfast, with very little invested in the all-stars, mostly because most of the equity found here was bought long ago, and changing what I hold would attract capital gains that I would prefer to take on my own terms. It’s where the majority of my early-retirement decumulation takes place.

Here’s what that breakfast looks like:

What’s in my non-registered portfolio, October 2025

Here’s a look at each holding, from highest to lowest percentage.

HXT: This is a Canadian equity ETF that does not pay dividends, instead using some wizardry to bury it all in the per-unit price of the ETF. This simplifies taxes, and I have held this fund for a long time. Due to increasing costs of this ETF, it’s among the first to get liquidated as I need funds.

XIC: Canadian equity fund, very popular. I think I bought it to create a bit of dividend income. It will get liquidated after the Horizons funds go (HXS, HXT, HXDM).

SCHF: A very low-cost international equity2 fund in USD that I’ve held for a very long time. It’s funds like SCHF that attracted me to investing in USD, which, at present, adds a lot of complexity.

ICSH: This is one of the all-stars. It is what my VPW cash cushion is invested in3. I use ICSH more than ZMMK in the cash cushion because US interest rates are quite a bit higher than Canadian rates at the moment. I talked about that here.

HXS: Same idea as HXT, except it invests in the S&P 500. This one is held only by my spouse who is still working for a living, so this will just stick around a while, until she stops working and can take on the capital gains.

VSC: A bond fund held by my spouse. I may sell this to harvest some capital gains losses.

HXDM: Same idea as HXT, except international equity. It is on the list to liquidate.

ZMMK: An all-star, held in the same account as ICSH.

The rest (XEQT, TEQT, XGRO) are all new arrivals in the portfolio, purchased using dividends4 from the other funds as well as the bonus payments I keep collecting from Questrade for switching to them.

My non-registered accounts are only a small portion of my retirement holdings, but there’s a fair bit of complexity there. Over time, these accounts will go to zero other than the cash cushion portion (ZMMK, ICSH or whatever replacements I discover) which will remain as long as VPW is my decumulation strategy.

  1. Mostly pure Canadian equity funds. This is to offset AOA that has next-to-no Canadian equity component. ↩︎
  2. 0.03% MER. Cheap! ↩︎
  3. VPW = Variable Percentage Withdrawal, an absolutely brilliant strategy for making sure you don’t run out of money in retirement and don’t leave a lot on the table. Read all about it here. ↩︎
  4. With all ETF trades being free, I hold very little actual cash in any of my accounts. ↩︎

Can I take advantage of higher US interest rates?

RobH4 Comments

I have a dedicated non-registered account in my retirement portfolio that is the cash cushion for VPW’s decumulation strategy. You can read about the details of how I currently get paid in retirement here.

That non-registered account holds about 85% Canadian dollars, invested in ZMMK, with the remaining 15% invested in ICSH. Both of these ETFs are very short-term bond funds and give me a slight advantage over investing in zero-risk HISAs. ZMMK and ICSH are part of my ETF all-stars lineup, and I track HISA rates on a monthly basis.

The fact is that US interest rates are a lot higher than Canadian interest rates, almost 2% higher as of July 2025. It seems to me that I should take advantage of that fact. Taking advantage of this situation would mean selling some ZMMK, performing Norbert’s Gambit with the resultant cash, and then buying ICSH. There are costs involved at every step of the way1:

  • Selling ZMMK means I’ll get dinged with the bid/ask spread2
  • Performing Norbert’s Gambit costs $9.95 plus HST on Questrade to do the necessary journaling
  • There will be bid/ask spreads to pull off the Gambit…once when buying DLR, once when selling DLR.U
  • Buying ICSH means another bid/ask spread

So at what point is it worth it? Let’s do a bit of math using the following assumptions:

  • The delta between US and Canadian rates is 1.8% in favor of the US rate. That’s an annual rate, and I’ll just divide by 12 to get a monthly rate3.
  • The bid/ask spread for DLR per the ETF fact sheet is 0.1% on the CAD side and 0.07% on the USD side
  • The bid/ask spread for ZMMK is 0.02% per its fact sheet
  • …and the bid/ask spread for ICSH is 0.02% as well per its fact sheet
  • No change in the FX rate for the duration of this exercise4
  • No fees to trade DLR, DLR.U, ZMMK or ICSH5

So for various amounts, the time to profitability6 of doing the Gambit looks like this.

$ CAD changedJournaling Fee7DLR Spread Fee8ZMMK/ICSH spreadTotal costTTP9
$1k$12$1.70$0.40$14.10~10 months
$10k$12$17.10$4$33.10~10 weeks
$100k$12$170$40$222~6 weeks

So clearly, for amounts around $1k this isn’t such an attractive proposition as the costs will take a fair bit of time to be negated by the bump in interest rates. For larger amounts, I’d say it’s worth it. Given ZMMK hasn’t yet paid out its dividend for the month, I guess I’ll wait until I’m ex-dividend (July 30, 2025, per the fact sheet) before doing this transaction.

  1. I’m also ignoring the tax on any capital gains I might pull off. It will be quite small, and will be close to 0. ↩︎
  2. Bid/ask spread is the difference between what the price holders are willing to sell at versus the price offered by a buyer. For ZMMK this is typically 1 cent. ↩︎
  3. Whether this delta continues to hold is anybody’s guess. ↩︎
  4. Which, admittedly, has no hope of being correct. If you do this sort of thing frequently enough, it ought to even out over time. ↩︎
  5. This is true at Questrade. YMMV with your broker. ↩︎
  6. Henceforth “TTP”, naturally ↩︎
  7. Adding HST and rounding ↩︎
  8. Buying DLR is 0.1% and selling it is 0.07% ↩︎
  9. Investing all holdings at 1.8% annual rate of return ↩︎