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News: Questrade changes how RRIF payments work

RobHLeave a comment

Questrade is my main provider of online brokerage services. They recently (this month) made a change to how periodic RRIF payments work. They unfortunately made no formal announcement about this, and the only reason I know it to be true is thanks to a helpful answer to my Reddit question from (presumably) an employee.

Questrade allows you to set up automatic withdrawals from your RRIF with (sigh) a form that provides options to withdraw monthly, quarterly, semi-annually or annually. As I’ve mentioned previously, I choose to use monthly withdrawals1 since that more closely approximates how I got paid when I was working.

Anyway, every month, Questrade sends you an email reminding you to make sure you have enough cash in your RRIF to make the payment. (Of course, they don’t actually tell you what that amount may be; they assume you know, probably after calling support early in the year.)

Prior to this month, they advised that cash needed to be in the account three working days before the withdrawal date (a date they never mentioned; I guess you’re supposed to know that too). Why three working days were required I have no idea2. Perhaps there’s an abacus powered RRIF processing centre in some corner of Questrade HQ?

All this to say if you didn’t happen to have enough cash in your account on the appointed RRIF withdrawal day Questrade used to:

  • Take the amount you were supposed to withdraw, let’s call it X
  • Divide X over the number of periods remaining in the year (e.g. you missed your February monthly payment: there’s 10 months left in the calendar year, so X/10, let’s call that Y).
  • Add Y to your old monthly payment amount going forward. Y is the new monthly amount.

Which, although a bit unexpected, has some logic to it.

Last week, I got another one of these reminder mails from Questrade, except the wording had totally changed. Now the notion of missing a payment was addressed directly:

If cash is unavailable:
We may still process your required payment on the scheduled date. If your cash balance is insufficient, your account will go into a debit cash balance. If you don’t take action to satisfy the debit balance, we may close positions in your account. If we need to close positions for you, we will charge a $45 fee for each trade we make.

— Questrade email from October 2026.

This is, I would venture, a rather significant change, yes? And the weaselly wording “may close positions….if we need” gives me zero information as to what rules are being applied here and when or if they would ever apply to me. The response to my Reddit post “the payment goes to our risk team for approval” means nothing to me. Will I get paid or won’t I? Will I get charged for my misstep or won’t I?

Anyway, I consider this another black mark for Questrade in the ever-evolving RRIF Support Showdown universe. It’s not the policy itself which annoys me; it seems fair enough, assuming “may” means “we will”. It’s the means in which it was communicated (or more accurately, not communicated) that leaves me cold.

With so many brokers throwing money at you to move funds, it’s hard to justify loyalty to ANY online broker, especially one whose loyalty bonus is coming to an end!

  1. I like monthly withdrawals; it allows me to keep a pretty manual process top of mind since I’m doing it every 30-odd days or so. The other benefit of going monthly is there’s not a huge number of shares being liquidated, so if the market is the midst of some temporary meltdown, I’m not risking a large amount of my net worth at any one time. . ↩︎
  2. When you’re comparing a hipster online broker’s SLA to be less attractive than that of one of Canada’s big banks, you know your bar is awfully low. ↩︎
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News: US Interest Rates on the Rise

RobHLeave a comment

As was expected, the US Federal Reserve raised interest rates by 0.25% yesterday. It’s now set to a target range of 3.75% to 4.00%.

This hasn’t caused any changes to the HISA and short term bond table — yet. I’d expect the HISAs to raise their rates in the coming days. Typically increases in the US rate without corresponding changes in the Canadian rate lead to additional weakness in the Canadian dollar. This no longer matters much to me as I’ve completed my task of Kicking USD out of my retirement portfolio, but it may be of interest to you.

The US Fed next sets interest rates on October 28, 2026.

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CAGE versus XEQT: what’s the deal?

RobHLeave a comment

It’s not that often an ETF launch causes so much buzz, but my usual feeds are all talking about Avantis CIBC CAGE. So what is it? Per its fact sheet it

Invests primarily in equity securities from developed and emerging markets through a portfolio of ETFs. The fund selects companies based on value and profitability characteristics, using a broad set of company financial fundamentals such as book value, earnings, and cash flow, together with current market prices. Designed to provide diversified global equity exposure in a single investment option.

https://www.cibc.com/content/dam/cibc-public-assets/personal-banking/investment/etfs/pdfs/cibc-fund-snapshot-cage-en.pdf

So let’s break that down:

“Invests primarily in equity securities…through a portfolio of ETFs”

Translation: CAGE is a fund of funds that’s 100% equity. Sounds a lot like XEQT/ZEQT/TEQT/VEQT. Looking a little deeper, it holds

  • CAUS: A US Equity ETF
  • CACE: A Canadian Equity ETF
  • CADE: An International Equity ETF
  • CASV: A Global Small Cap ETF
  • CAEM: An Emerging Equity ETF

Seems pretty normal so far.

“The fund selects companies based on value and profitability…using financial fundamentals”

Translation: This isn’t an index fund. CAGE is picking which companies to invest in based on balance sheet metrics. This starts to sound like a typical managed fund that typically underperforms the index it’s supposed to be measured against1.

I’m skeptical. Index (aka passive) investing has proven that it works over time.

What’s inside CAGE?

So, let’s see what’s actually inside this fund and compare it to XEQT2. As it turns out, this isn’t easy. Figuring out what’s inside CAGE requires you to navigate to each of CAGE’s holdings and look at what’s there. Irritating, but that’s not the worst of it — the constituent funds only show top 10 holdings each. That leads to a tremendous blind spot as to what you’re actually purchasing when you buy shares of CAGE. I hope CIBC fixes this, and soon. Anyway, I took XEQT’s top 10 and compared it to CAGE’s allocation.

CompanyXEQT Holding (%)CAGE Holding (%)
NVIDIA3.07%1.89%
Apple2.52%1.88%
Microsoft1.92%1.45%
Royal Bank1.81%1.88%
Amazon1.64%1.51%
Alphabet Class A1.42%0.96%
TD Bank1.30%1.44%
Broadcom1.25%<1%3
Alphabet Class C1.13%0.77%
Shopify1.07%0.99%
Total ex Broadcom15.88%12.77%
Comparing top holdings of XEQT versus CAGE

What’s immediately obvious is that CAGE doesn’t place as much money in the trillion dollar market cap companies as XEQT does.

A more interesting (?) exercise might be to take a look at CAGE’s top holdings as compared to that of XEQT.

CompanyCAGE Holding (%) / RankXEQT Holding (%)/ Rank
NVIDIA1.89% / 13.07% / 1
Apple1.88% / 22.52% /2
Royal Bank1.88% / 31.81% /4
Amazon1.51% /41.64% /5
Microsoft1.45% /51.92% /3
TD Bank1.44% /61.30% /7
Shopify0.99% /71.07% /10
Alphabet Class A0.96% /81.42% / 6
Canadian National Resources0.91% /90.72% / 16
CIBC0.86% /100.75% /14
Total14.56%17.00%
Comparing top holdings of CAGE versus XEQT

And again, not too much of interest here — CAGE holds less of the trillion dollar companies than XEQT, but the differences aren’t massive.

High level metrics

Well, since we can’t get a good feel on what’s inside CAGE, maybe looking at other vital signs are helpful?

MetricCAGEXEQT
MER0.28%40.20%
Number of underlying holdings692658475
Dividend Yield2.18%60.82%7
Target allocations8US Equity: 39.4%
Canadian Equity: 30%
International Equity: 17.6%
Global Small Cap Equity: 8%9
Emerging Equity: 5%		US Equity: 45%
Canadian Equity: 25%
International Equity: 25%
Emerging Equity: 5%
Comparing CAGE metrics with XEQT

This shows that CAGE is more expensive, holds fewer underlying stocks (we think), has a higher dividend yield (unsurprising, given its focus) and invests more in Canada than XEQT at the expense of International Equity10.

Performance

Comparing performance isn’t going to be very useful since CAGE is new, but CAGE inherits its strategy from an older US-based fund, namely AVGE. Now, to be clear, AVGE and CAGE aren’t quite the same thing. CAGE, as a Canadian fund, will tilt more to Canadian Equity holdings. But the approach used by AVGE and CAGE is the same: find quality companies and invest in them, wherever they are. So to me, comparing AVGE to its benchmark, the MSCI all-country investable market index, is a fair comparison. That index can be purchased by buying ACWI, an ETF that I’ve never heard of. I have heard of VT, so I’ll throw that into the mix since that seems to be a similar idea. Here’s what https://dqydj.com/stock-return-calculator/11 had to say about that:

Comparing performance of VT, ACWI and AVGE to gauge effectiveness of Avantis’ stock picking techniques

AVGE doesn’t have a hugely long track record either (less than 4 years in existence) but, regrettably, it’s coming up on the short end of the stick as compared to the passive index funds. Not by a lot, though.

My take

Buzz or no, I don’t think this product is for me. I buy passively managed ETFs, for the most part12. The lack of transparency on CAGE’s holdings is irritating (I am hoping/assuming that CIBC will fix this) and there’s nothing about the performance of its US sister that leaves me with FOMO. I’ll stick with The magnificent seven ETFs for now.

  1. Canada’s own CPP fund is, sadly, one of those ↩︎
  2. As of April 30, 2026 for both. I note that XEQT provides daily updates on one screen to see what’s inside. For CAGE, you have to resort to spreadsheets. ↩︎
  3. The constituent ETFs of CAGE only show top 10 holdings; Broadcom doesn’t crack the top 10 of CAUS which is 40.13% of CAGE. ↩︎
  4. Per https://usegreenline.com/en-ca/articles/cage-etf-explained. ↩︎
  5. 1782 for CAUS per https://www.investing.com/etfs/caus-toronto-holdings, 299 for CACE per https://www.investing.com/etfs/cace-toronto-holdings, 2403 for CADE per https://www.etfrc.com/CADE.TO, 1316 for CASV per https://www.investing.com/etfs/casv-toronto-holdings, 1126 for CAEM per https://ca.investing.com/etfs/caem-toronto-holdings for a total of 6926. For reasons unclear, CIBC doesn’t seem to think it’s worthy of them to publish this information themselves. ↩︎
  6. As of end April 2026, the latest thing published ↩︎
  7. As of end May 2026. ↩︎
  8. For CAGE, refer to https://www.cibc.com/content/dam/cibc-public-assets/personal-banking/investment/etfs/pdfs/cibc-fund-snapshot-cage-en.pdf. For XEQT, refer to https://www.blackrock.com/ca/investors/en/literature/product-brief/core-etf-portfolios-product-brief.pdf ↩︎
  9. 60% is US Equity, 4% is Canadian Equity per https://www.cibc.com/en/personal-banking/investments/etfs/avantis-global-small-cap-value-etf.html ↩︎
  10. XEQT is a bit of an outlier here; read Are my portfolio’s asset allocation targets “correct”? ↩︎
  11. It seems that my formerly preferred tool has gone to a registration process; I’ll have to revisit Tools I Use I guess… ↩︎
  12. Bond funds are often actively managed. ↩︎

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

RobH2 Comments

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. ↩︎