Tag: aoa

News: Upcoming changes to S&P 500, S&P/TSX Composite

RobH1 Comment

As a dedicated low-fee ETF investor (new to ETFs? read more here), most of my holdings are actually tied up in various index funds; as of right now about 26% of my retirement savings are tied up in the S&P 5001 (largely by holding AOA and XGRO, two of my ETF all-stars), and another 11% are tied up in the S&P/TSX capped composite2 (a lot of which is due to holding XGRO)3.

Beyond making sure I keep my asset allocations in line (read more about that concept here), there’s not much to do. But this doesn’t mean that what I ultimately hold isn’t always changing!

I was reminded of that fact when I noted the latest announcements from S&P, who on a quarterly basis, rejig their indices to add new stocks and drop others. It’s not something I’ve typically paid any attention to, but I share it with you because I found it interesting.

S&P 500: AppLovin, Robinhood & Emcor added, MarketAxxess, Caesars and Enphase deleted

Effective, September 22, 2025 per the press release.

Newly added: AppLovin seems to deal in the world of online advertising, Robinhood is a notorious4 online broker, and Emcor looks to be a construction company.

Newly booted: Marketaxess sells a platform to financial services companies, Caesars operates casinos, and Enphase is a solar energy product company5.

S&P/TSX Composite6: 5 added, 2 deleted

Effective September 22, 2025 per the press release.

Newly added: Aris, Discovery, Perpetua and Skeena who are all involved with precious metals production7 and Curaleaf which is a weed dispenser.

Newly deleted: Enghouse (software and services, based in Markham) and Pason (products and services for oil and gas based in Calgary).

If ever you want to see what’s in either of these indicies, then check out this chart for the S&P 500 and this chart for the TSX composite.

  1. You can read about this index right from the source if you like. ↩︎
  2. There’s another 6% in the S&P/TSX60 index, which are the 60 largest Canadian firms. The 10 year return of these two indicies is nearly identical — 7.98% for the capped, 8.06% for the TSX 60. You can read about the capped composite here. ↩︎
  3. You may wonder where the rest of holdings are. There’s 15% in various bond indices, 5% in cash, and the rest are in an assortment of international indices (largest are MSCI World ex-US at 10% and MSCI EAFE IMI at around 5%) and lesser-known US/Canadian indicies (like FTSE all-cap Canada or S&P total market US). In the Canada/US case, I’m rather certain that an all-cap index has a very high correlation with the large-cap indices; I could have bundled it all together I suppose. ↩︎
  4. Notorious because they are associated with meme stocks. ↩︎
  5. It’s probably not a good time for any US company in the renewables business, sadly. ↩︎
  6. I wondered when the last change to the TSX 60 was. I couldn’t find one after September 2019! ↩︎
  7. Perhaps a “why I don’t need to buy gold bars from Costco” comment is apropos here ↩︎

What’s in my retirement portfolio (Aug 2025)

RobH1 Comment

This is a 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 post-payday

I pay myself monthly in retirement, so that’s a good trigger to update this post. At market close, August 22, this is what it looks like:

Retirement holdings by ETF, August 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.

The most noticeable change is a growth in the importance of ICSH to my portfolio at the expense of ZMMK. I did the math to justify performing a Norbert’s Gambit of the CAD generated by selling ZMMK and picking up ICSH. The amount of HXS remaining in the portfolio is dwindling, and may be gone altogether by next month. I choose which assets to sell out of my non-registered accounts by simply determining which asset category needs to be trimmed based on my multi-asset spreadsheet.

I also have a new way to track my AOA splits; since it rebalances itself twice annually, it seems to me wiser to fix its bond contribution at 20% in my multi-asset tracker. The equity splits between US, International, and Canadian are still dynamically calculated at least monthly using a properly weighted formula.

Plan for the next month

The asset-class split looks like this

It’s looking pretty close to the targets I have, which 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)

I don’t really see a need to make changes based on what I see here. Cash flowing in to the account (bonus payments, regular TFSA contributions) will be re-invested in one of XEQT or XGRO1, typically2.

Overall

The retirement savings had a great month. Overall, I’m ahead of where I started even though I’ve been drawing a monthly salary since the beginning of the year. 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, 2.41% higher than my first draw in January3. This is also expected, since it tracks the value of the retirement portfolio, albeit in a much more controlled way. The VPW “cash cushion” smooths out the ups and downs of the monthly returns. I suppose I really should see an increase in my salary on par with inflation so that I maintain my spending power. I’ll have to think about how to track that4.

Monthly salary, as percentage of Jan 2025 salary
  1. I have purchased some TEQT lately since it has a lower MER. I covered TD’s family of all-in-ones here. ↩︎
  2. Since my target is 15% bonds, and XGRO is 20% bonds, I have to offset some of the XGRO purchases with 100% equity purchases. ↩︎
  3. Not a bad raise. ↩︎
  4. Looks like https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes is a good place to start. ↩︎

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. ↩︎

What’s in my retirement portfolio (June 2025)

RobH4 Comments

This is a (hopefully1 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 accounts2:

  • 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, June 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.

The biggest changes over the last 30 days was due to a small rebalancing exercise I executed. I sold off some AOA in order to pick up more ICSH. The stock market has been roaring lately, and it caused my target allocations to become a bit cash-poor; ICSH is not, strictly speaking, “cash”, but for my purposes, it’s close enough. (You can read about my cash thoughts here). I could have instead sold XGRO to pick up more ZMMK, but US interest rates are a lot better than Canadian ones at the moment, so I figured I’d enjoy the extra few percentage points of return on my cash holdings.

Plan for the next month

The asset-class split looks like this

This looks to be pretty close to my target percentages which haven’t changed:

  • 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 pie is looking almost perfect at the moment. I don’t see any near-term need for fiddling with what’s there.

Overall

The retirement savings look quite healthy; even though I’ve been drawing a monthly salary for 6 months, I’m now ahead of where I was3 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 aready.

Monthly retirement savings, as percentage of Jan 2025 value

My VPW-calculated salary has gone back to more or less where I started at the beginning of the year. And even with the crazy market swings we’ve seen, it’s stayed remarkably stable4. That’s 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. I know it’s July 7, but the numbers are accurate for June, more or less. ↩︎
  2. I treat retirement savings as firewalled from my day to day chequing account. ↩︎
  3. Just barely, but I’ll take it ↩︎
  4. I changed the vertical axis of this chart to align with the other chart; it makes its stability much clearer. ↩︎