Tag: asset allocation

a tree stump on the seashore

Why I’m dubious about the “cash wedge”

RobH2 Comments

The cash wedge, as the name may imply, is a chunk of cash (i.e. liquid assets that are safe to withdraw at any time, in any market, the cash under the mattress being the 0% interest option1) that allows you to survive market downturns. The concept comes up again and again in reading the personal finance blogs and media. Here’s a typical treatment2: https://www.sunlifeglobalinvestments.com/content/dam/sunlife/regional/canada/documents/slgi/810-4986-10-20-cashwedge.pdf

And the article linked above has some quite specific recommendations, which is typical. The details will vary a bit from source to source, but let’s keep rolling with Sun Life.

  • Put about one year of expenses in a money market account (I would add: or HISA)
  • Put another two years of expenses in something slightly less liquid (e.g. GICs, bond funds)
  • Invest the rest “to match your individual investment profile”. This, I think, is supposed to imply some percentage of things that aren’t cash (e.g “equity”), but here is where the vagueness begins…

I have some issues with this first bit, which you may find surprising. After all, doesn’t my own retirement allocation strategy have a “cash wedge”? It does have cash, and it’s true — until I actually stopped earning a salary, I had NO cash in my retirement savings. It was strictly 80/20 (equity/bonds). Once I decided to use VPW3 for my decumulation strategy, I saw I would need to have what they called a “cash cushion”. I formalized it by adding 5% cash to my overall retirement asset allocation.

What I have in my retirement portfolio is 5% “cash” (actually, ultra short term bond funds, but close enough), 15% “bonds” and 80% equity (with targets by geographic region for USA, Canada, and everywhere else). But this 5% cash position isn’t a cash wedge since the amount of cash I hold will vary with my net worth. It’s a fixed percentage. If times are good, I add cash. If times are bad, I subtract cash. Mostly I’ve been adding cash in retirement, since my net worth has also increased. The wedge strategy suggests you keep the amount fixed, regardless of net worth.

This downside of keeping a static amount of cash set aside is that it could become either a vanishingly small portion of your savings (which means more limited downside protection), or a very large portion (which means limited growth opportunities) of your retirement savings over time.

This is, in the end, not the main objection I have. The big problem I have with the “wedge” idea is that too many questions are left unanswered and unaddressed:

  • If you are paying yourself from the wedge, when do you top it up?
  • Some variations of the wedge idea suggest that you pay yourself from the wedge “when markets are down”. “Down” compared to what? How far is “down”. When does “down” become “up” again?
  • In any case, the wedge should be replenished. How frequently? From where?

Maybe some people have figured out rules and procedures to answer these questions. My fear is that new retirees set up the wedge but then are left on their own to make decisions about when, where, and how much to draw down. And this sort of decision making is what I would call “timing the market”. Which, if you’ve been reading this blog for a while, is something that I strongly believe simply cannot be done4.

My retirement methodology, based on VPW, takes all the potential for bad behaviour out of my hands:

  • My cash position is always a fixed percentage of my net worth
  • How much I withdraw every month is based on my net worth. If markets are bad, I spend less. Same as when I worked in sales and had a bad quarter/year: less quota bonus means less spending..
  • There is no temptation to time the market, since every month is more or less the same
    • Sell XGRO from my RRIFs5
    • Sell additional non-registered assets6 to reach my recommended monthly salary
    • Augment or subtract from my cash cushion as needed7
    • Make additional trades to pull my asset allocations back into line if needed8

The longer I live my retired life using VPW, the more I find to like about it. But happy to hear from you if you think you’ve found a way to use cash effectively without trying to guess where the market is headed. Hit me up at comments@moneyengineer.ca!

  1. Or like most big banks ↩︎
  2. And although Sun Life and their financial products are not something I would wish on my worst enemy, the ideas expressed in this article can be found in lots of sources. ↩︎
  3. “Variable percentage withdrawal” which is a methodology that considers age, future pensions and current asset allocation to generate a sustainable income flow. ↩︎
  4. For about 2 years now, I’ve been reading about the imminent market crash. I’m still waiting, now worth 20% more than when the first rumbles started, and so now I can survive a 20% decline in the market and be exactly where I was 2 years ago, except that I’ve been drawing a generous salary the whole time. I’m not saying that there isn’t a crash likely coming at some point, but no one can say when that will happen. If you stay invested, you tend to be rewarded. Leaving money sitting idle means that you have to guess right twice: once that the crash is imminent, and once when the bottom is reached. ↩︎
  5. Which reduces all the asset classes I track except cash. Cash grows rather slowly so every once in a while I have to buy a little more to keep the 5% in line. ↩︎
  6. Here I do exercise some discretion over what asset(s) are liquidated, but normally I just sell the asset class that is the most overweight in my portfolio. ↩︎
  7. The full monthly workflow is described in The Mechanics of Getting Paid in Retirement: 2026 Edition. The VPW methodology tells me exactly how much to manipulate my cash cushion. ↩︎
  8. Trading is free on the platforms I use, but I don’t obsess; as long as the assets are within 1% of targets, I don’t make additional changes. ↩︎
person driving a person flying an aircraft

A new asset tracker

RobHLeave a comment

My entire retirement strategy is built around the idea of maintaining my asset allocation1 within the 5 categories I’ve (somewhat arbitrarily) decided to care about, namely:

  • Cash and ultra short term bonds, which make up 5% of my retirement portfolio
  • Bonds, which make up 15% of my retirement portfolio
  • Canadian Equity, which makes up 23% of my retirement portfolio
  • US Equity which makes up 37% of my retirement portfolio
  • And International Equity (anything that’s not the US or Canada) is 20% of my portfolio.

Tracking these percentages across the multitude of accounts2 me and my spouse hold, across multiple brokers requires some external tool help. For many years, it was based on the multi-asset tracker I have linked on the Tools I Use page. But in the past few months, I’ve migrated to a “new, improved” version of that tracker that has been re-architected so it is now based on pivot tables. Here’s some screenshots:

Pivot tables make maintaining the values in my portfolio much, much easier, and having structured tables makes it really easy to create new ways to analyze my holdings.

For instance, with the old asset tracker, say I wanted to compare the total value of my RRIF accounts with that of my spouse. Since we’re too young for income splitting, I’m motivated to try to keep the values between them relatively equal, so that we’re both withdrawing roughly the same dollar amount every year (thankfully, my spouse and I are the same age).

I could do this with the old asset tracker, but it would involve creating a new sheet, linking to the relevant values, (not so easy when you’re working from a single screen) making the calculations and looking at the result. And I would make it quick and dirty, since I wouldn’t know at the time whether it was something I wanted to track long term or not.

With the new asset tracker, it’s just a pivot table away. Takes seconds.

I’ll be posting a more thorough walk-through of it in the coming days, but if you want to check it out, it’s available here.

  1. If you want to learn more about asset allocation, this is a good starting point: Investment basics: Asset Allocation ↩︎
  2. TFSAs for both. RRIFs and Spousal RRIFs for both. Non-registered accounts for both. An extra non-registered account that serves as a cash cushion, and an extra RRIF at Wealthsimple because I needed a new laptop 🙂 ↩︎
snowball toss in los penitentes mendoza

Review: Snowball Analytics

RobHLeave a comment

Snowball Analytics (link here) is a tool that markets itself as a “Simple and Powerful Portfolio Tracker” with “automated dividend tracking”.

I don’t remember when or where I first kicked the tires of this tool but I figured I’d give it another look. I’m only using the free version of Snowball, since my multi-asset tracker tracks my portfolio and also I don’t really care about dividends.

Startup

Snowball gives you full access to all its feature set for 2 weeks so you can really see if it’s worth paying for. That’s a plus in my view. But even the free version allows you to manually create a single portfolio with up to 10 holdings in it. All the paid-for versions include direct connection to your brokerage, and the ones I’m most familiar with (Questrade and Wealthsimple) are both supported.

For fun, I created a public portfolio that’s sort-of1 based on the percentages in my June 2026 portfolio update. You can see it here. What you see on these public portfolio pages is similar, but not identical, to the screens shown if you create your own login.

Dashboard

Gives a high level overview of what’s going on in the portfolio: what it’s worth, how much you made today/all time, and, atypically, Passive Income aka yield.

One weird thing Snowball does is insist on putting your assets into “Categories” which you can define yourself or let it assign them automatically. It doesn’t really know what to do with ETFs and so it classifies them all as “Funds”, which is about as helpful a category as “Unclassified”. I flagged this with support, but I don’t really expect much. If you click through the pie charts, it does show what’s underneath, so this is mostly a cosmetic issue.

Pie Chart, like the one I show every month

Also shown on the dashboard are the timing and predicted value of future dividend payments, which is nice.

Future passive income from dividends shown on the Dashboard

Dividend tracking

Here we see what Snowball’s focus is. The dividend screen is quite comprehensive, and will warm the heart of the dividend-focused investor. I can’t really comment if the numbers presented on this screen are sufficient for that audience. My portfolio focus is on absolute growth, and I’m completely indifferent as to whether that growth comes from dividends or unit price appreciation. 

Anyway, I’m happy to hear whether others out there find this sort of dividend analysis useful, let me know at comments@moneyengineer.ca!

Analytics

Here you have a bunch of views of the makeup and performance of your loaded portfolio. For the holder of all-in-one ETFs, these pages are a mixed bag of helpful and not-helpful. On some screens, Snowball isn’t able to look deeply enough into what’s actually inside an all-in-one and thus produces unhelpful results. For example, I know my portfolio is 80% equity. Snowball has other ideas, especially when it comes to Canadian ETFs:

Asset class distribution has obvious problems

There’s problems here:

  • XGRO/XEQT/HXT are missing asset classes. Their percentages don’t add up to 100%
  • A lot of Canadian all-in-one ETF asset classes are classified as “Other”, which is wrong. XGRO (for example) should line up exactly as AOA does, with 80% stocks and 20% bonds, more or less. For XGRO, the bond percentage is right, but the other 80% is suspect.
  • XIC/VFV/HXT are 100% Canadian equity, but Snowball seems lost here.

The performance widget seems to be a lot better; here you can backtest your portfolio against a bunch of benchmarks. Unfortunately, none of the included benchmarks includes bonds, but you can see how my portfolio stacks up against a global equity pool, namely the MSCI World index:

Growth charts are helpful to see how your portfolio compares to a benchmark

I did see a few problems here, too:

  • Not all of my portfolio holdings have been around for (for example) 5 years. So how is the tool generating 5 year return charts?
  • When you select “all” as a timeframe, my portfolio shows a one year performance. Puzzling.

The fact that my portfolio lags the MSCI World is unsurprising since my portfolio has 20% bonds, and the MSCI World has none. Bonds add stability to a portfolio at the expense of growth. Sometimes I wonder if that stability is really worth it.

Conclusion

Snowball, like many tools, struggles with understanding what’s actually inside an all-in-one ETF like XEQT or XGRO. For me, that sort of shortcoming is a deal-breaker. If you were a holder of individual stocks that cared about passive (dividend) income, it might be worth your time.

What do you think? Let me know at comments@moneyengineer.ca!

  1. “sort of” because I have more than 10 holdings in my portfolio. I got most of them, and scaled it to start as a 100k CAD portfolio. ↩︎

black and white photo of a woman holding birdcage

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. ↩︎

crop sportswoman checking information on tracker

Mini Review: Portfolio Tracker

RobHLeave a comment

Over the years I built my own portfolio tracker (the multi-asset tracker) and I’ve shared it on this website1. I’ll be the first to admit it’s not terribly user-friendly, which is somewhat understandable since I built it for myself.

If you want to take a look at another Google Sheet tracker that is fully documented and more user friendly, then you might want to take a look at Portfolio Tracker.

I’m not sure where I first encountered this tool; possibly on Reddit or perhaps the Financial Wisdom Forum.

Anyway, the brains behind this tool are substantial, and I bow to the organization and wizardry of the author. For people who adhere to the idea of asset allocation as a way to make investment decisions, you won’t find a better fit.

So, in a nutshell, what does it do?

  • It allows you to track the value of your portfolio across multiple brokerage accounts using multiple data sources for near-real time quotes2
  • It allows you to set up your own asset classes to track and to set individual targets for each, both at the portfolio level and at the account level3.
  • It will show you how far off you are from your targets and make high-level recommendations for where (what account) to buy/sell to get back on track

One very nice feature of Portfolio Tracker is that a given asset can be divided up into multiple asset classes. For fans of asset allocation funds (like me) this is a critical feature. With this feature you can accurately depict that (say) XEQT is 25% Canadian equity and 45% US Equity.

Once I figured out the terms used in Portfolio Tracker, it was pretty straightforward to enter my own portfolio across the 5 RRIF, 2 TFSAs and 3 non-registered accounts.

What confused me at the beginning about Portfolio Tracker is that it has more layers than I’m used to:

  • It starts with asset. Like XGRO, AOA or ZMMK. So far so good.
  • Assets belong to one (or more) asset classes. If more than one, the percentage has to add up to 100%. Asset classes are where I focus my attention: Portfolio Tracker has more of them than I need4 by default but you can define as many or as few as you like.
  • Asset classes in turn belong to a unique Asset Category)5.; a given Asset Category can be the parent of multiple asset classes (e.g. US Small Cap and US Total Market asset classes are both included in the US Equity Asset Category)
  • And asset categories roll up into Parents (stocks, bonds, short-term)

One minor point of confusion to the Canadian user is the inclusion of TIPS which is a uniquely US investment vehicle. In Canada you can buy real return bonds or buy ETFs that hold TIPS if you wish. I don’t bother with either myself.

The only limitation I could find in this tool was that it didn’t support multiple currencies. If you hold USD assets (as I do), that is a very serious limitation, but one that I could (and did) correct myself pretty easily with a few changes. When I sent a note to the provided support email on that limitation, the author promptly replied and admitted it was not the first time someone had asked about it.

I recommend this tool as a user-friendly introduction to tracking your own portfolio.

  1. I’ve built a new version based on pivot tables; on my to-do list is to make it generic enough to share. The new design lifts some ideas from Portfolio Tracker, in fact. ↩︎
  2. At one time my own tracker did this too but as it requires web scraping code it breaks pretty frequently, and in the mean time googlefinance() has become much more reliable ↩︎
  3. I’ve only really cared about portfolio level, but I have some broad rules about what goes where at the account level. TFSA: Equity only. RRIF: only place outside of the cash cushion where cash can be held. And the only place I hold bond funds. Non registered: equity only. ↩︎
  4. It divides US Equity into small cap (“US Small Cap”) and total market (“US Total Market”). This particular example I found a bit weird since logically “US Small Cap” is normally considered part (albeit a very small part) of the “US Total Market”. ↩︎
  5. Asset Categories for me are a level of detail I don’t need. If you set them to be the same as your Asset Classes then they effectively aren’t used. Although probably best to given them “AC”names so you don’t get mixed up, e.g. US Equity asset class belongs to US Equity AC asset category. ↩︎