Tag: diversification

What’s the deal with XEQT?

RobH3 Comments

***updated this post to reflect the fact that XEQT has dropped XUS from its portfolio as of July 2, 2025***

This post is inspired by my original on the topic, “What’s the deal with XGRO“? XGRO is great, but since my target asset allocation is only 15% bonds, and XGRO’s bond target is 20%, there’s some tweaking I have to do in order to reduce the bond exposure. That tweak is increasingly being provided by XEQT, part of the same iShares family that produced XGRO.

(As mentioned elsewhere, I rely heavily on all-in-one ETFs in my retirement portolio. New to all-in-ones? Read a bit about them here.)

XEQT, like XGRO, is actually investing in thousands1 of different stocks. Unlike XGRO, it does not hold any bonds at all. I thought it would be interesting to see what, exactly, is underneath every $100 you invest in XEQT. See the results below:

FundWhat is it?How much?Compare with XGRO23
ITOT/ XTOT4Broad US stock coverage that tracks the S&P Total Market Index, about 2529 companies (top holdings: Apple, Nvidia, Microsoft, Amazon, Meta)$43.62 of your $100 investment$36.32 of your $100 investment
XEFBroad international (Europe, Asia, Australia) stock coverage that tracks the MSCI EAFE Investable Market Index, about 2500 holdings$25.25 of your $100 investment
$19.76 of your $100 investment
XICBroad Canadian stock coverage that tracks the S&P/TSX Capped Composite Index, about 223 companies (top holdings: RBC, Shopify, TD, Enbridge, Brookfield)$25.71 of your $100 investment
$20.09 of your $100 investment
XEC3000+ emerging market stocks that track the MSCI Emerging Markets Investable Market Index$5.04 of your $100 investment$4.07 of your $100 investment

The top 10 stocks of XEQT as of today looks like this:

TickerCompanyInvestment for every $100
NVDANvidia$2.99
MSFTMicrosoft$2.70
AAPLApple$2.26
RYRoyal Bank$1.67
AMZNAmazon$1.54
SHOPShopify$1.35
TDTD Bank$1.15
METAMeta$1.09
AVGOBroadcom$0.96
ENBEnbridge$0.88
Total$16.59
Top 10 holdings of XEQT as of July 25, 20255

The top stock holding outside North America belongs to Taiwan Semiconductor, at 46 cents for every $100 invested. Additionally, the geographic exposure looks like this:

Geographic exposure of XEQT as of July 25, 2025

One other little tidbit that might be interesting: the distribution yield of XEQT is 2.94% compared with 2.91% for XGRO. This I find a bit surprising, since I would have expected XGRO’s yield to be quite a bit better.

  1. 8,550 to be precise, as of today ↩︎
  2. As of today, might be different from when I wrote https://moneyengineer.ca/2025/01/30/whats-the-deal-with-xgro/ ↩︎
  3. And, if you’re really paying attention, you’ll see that the dollar amounts of this column add up to roughly $80, in keeping with the 80/20 philosophy of XGRO. ↩︎
  4. i lump these together because they hold exactly the same thing. Some loophole that iShares needs to exploit, I gather. ↩︎
  5. On the date I pulled these numbers, cash cracked the top 10 for a holding of $1.34, which is not usual, so I just dropped it. Not sure why that is…perhaps by the end of the month it will resolve itself. ↩︎

What’s in my retirement portfolio (April 2025)

RobH3 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
  • 3 non-registered accounts1, (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.

The view as of this morning

As of this morning, this is what the overall portfolio looks like:

Overall retirement portfolio by holding, April 2025

The portfolio, as always, is dominated by AOA and XGRO which are 80/20 asset allocation funds in USD and CAD, respectively. The rest are primarily either cash-like holdings in two ETFs: ZMMK in CAD and ICSH in USD) or residual ETFs held in non-registered accounts for which I don’t want to create unnecessary capital gains just for the sake of holding AOA or XGRO.

The biggest month over month change was a small decline in AOA and a small uptick in XEQT, about a 1% shift overall. This was because I shifted some of my USD assets to CAD assets in the RRIF using Norbert’s Gambit2. I chose XEQT over XGRO because the contribution of bonds in the portfolio was slightly over my asset allocation target3. XEQT is essentially XGRO, minus the bond holdings (it’s a 100% equity fund).

There was also a noticeable reduction in the contribution of ICSH to the portfolio; this was largely due to the unfavourable change in the USD/CAD exchange rate over the course of the month, and not due to any change in the holdings there.

Plan for the next month

The asset-class split looks like this

Overall retirement portfolio by market, April 2025

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)

So, the plan for next month is, do nothing out of the ordinary. Reinvest cash (dividends, TFSA contributions) in one of AOA, XEQT/XGRO, ICSH or ZMMK depending on the asset category most in need on the day of the reinvestment. All these ETFs are covered on my ETF All-Stars page.

Overall

My retirement savings declined 5.75% over the month (down 7% since January) due to the continuing meltdown in the equity markets. It’s not a pretty picture!

Net worth of retirement savings compared to start of retirement

This has not translated to a the same degree of change in my monthly salary. Why? My retirement payouts are calculated by Variable Percentage Withdrawal (VPW), which I cover here. VPW has a built-in cash cushion, which serves to dampen month to month swings in my net worth, either up or down. As you can see in the chart below, my monthly salary has stayed within a 1% band of the first salary I drew in January.

Month over month salary, as compared to start of retirement

  1. Since Questrade combines USD and CAD assets under the same account umbrella, I was able to reduce the number here. ↩︎
  2. I shift funds from the USD to the CAD side of the RRIF more or less quarterly since all RRIF payments are currently coming out of the CAD side of the portfolio. ↩︎
  3. That’s the optimistic point of view; it’s perhaps more accurately stated as “bonds haven’t melted down quite as much as the equity portion of my portfolio”. ↩︎

How I think about investing: Asset classes

RobH9 Comments

Passive investing while ensuring good diversification has been my strategy for decades. But how do I define “diversification”? For me, it’s always been about paying attention to how much of my total portfolio was invested in each of five1 asset classes and keeping them aligned with my targets:

  • Cash or cash equivalents
  • Bonds2
  • Canadian Stocks
  • US Stocks
  • International Stocks3

I got this idea from my last financial advisor who provided me with a lovely Cerlox4 bound annual report showing me how hard they were working on my behalf5. The report included a pie chart of how my investments broke down. This is what that pie chart looks like in my portfolio this morning:

Retirement portfolio by asset class, March 28, 2025

This pie chart has been my guiding principle: have a target percentage for each asset class in mind, and adjust your portfolio as needed to keep the percentages in line. This simple principle has been adopted by so-called asset allocation ETFs aka “all-in-ones” like (my personal favourites) XGRO6 and AOA7.

But are these even the right asset classes? Where are REITs8? Where’s precious metals? Where’s Bitcoin9? What’s your bond duration? Do you have enough exposure to high-growth geographies?

Short answer: just like I’m too lazy to pick stocks, I’m too lazy (and not smart enough) to pick a “winner” of a given asset class. The “periodic table” of investment returns by asset class is a must-read for DIY enthusiasts out there: https://themeasureofaplan.com/investment-returns-by-asset-class/ (go ahead, take a look, I’ll wait).

The folks at Measure of a Plan agree that trying to figure out the “hot” asset class is a very difficult task:

It’s no easy feat to pick the winner in a given year. The asset class rankings appear to be randomly tossed about over time, with the top performer in one year often falling down to the middle or bottom of the table in the next year.

https://themeasureofaplan.com/investment-returns-by-asset-class/

By keeping an eye on the pie chart, and shifting investments to align with my targets, I’m never at risk at being overweight in any one asset-class, and beaten-down asset-classes naturally get more funds to get the percentages right. It’s naturally causing “buy low, sell high” behaviour.

So: what about the asset classes I’m using? Are 5 asset classes too many? Too few? I don’t know. “Good enough” is sort of my philosophy in the spirit of trying to keep things simple.

The spreadsheet I’ve used to help me track my portfolio breakdown is found here. In future posts, I’ll talk a bit about how to make it work for you.

  1. For a long time, “cash” was not part of the consideration. Leading up to retirement, I started to carry a 5% cash weighting to help cushion market swings. ↩︎
  2. In years past, I did try to keep track of short-term versus mid-term versus long-term bonds. I gave up on that. ↩︎
  3. In years past, I did try to keep track of developed markets versus emerging markets. I gave up on that. ↩︎
  4. I had to look up how this was spelled. https://www.collinsdictionary.com/dictionary/english/cerlox ↩︎
  5. The fact that this report looked the same as the reports generated by two other advisors led me to the conclusion that my hard working advisor was perhaps being assisted by commercial software. ↩︎
  6. Overview of XGRO’s asset allocation strategy: https://www.blackrock.com/ca/investors/en/literature/product-brief/ishares-core-etf-portfolios-brochure-en.pdf ↩︎
  7. Overview of AOA’s asset allocation strategy: https://www.ishares.com/us/literature/product-brief/ishares-core-esg-allocation-brief.pdf ↩︎
  8. My first list of asset classes prepared circa 20 years ago did include REITs but I dropped that class, figuring (perhaps incorrectly) that the bond portion of the portfolio was good enough. Doing a bit of digging, I see that both AOA and XGRO hold REITs, and both consider them “equity” investments. ↩︎
  9. It’s actually obligatory for any article on investing to mention one (or more) cryptocurrencies, and/or one (or more) meme stocks 😉 ↩︎

Questrade Bonus Capability: Passiv

RobH5 Comments

**** Update: Per email communication on October 24 2025, as of January 31, 2026, Passiv will not be offered at all by Questrade, as they are planning to launch their own “integrated portfolio monitoring and rebalancing tools”.

**** Update: As of June 1, 2025, Passiv Elite is no longer offered for free for Questrade Clients. It’s now part of a subscription service called Questrade Plus***

As you may have heard, I’m in the middle of a transition between online brokers1. And so I’ve been spending some more time getting to know what Questrade offers to the DIY investor besides free buying and selling of stocks and ETFs.

One thing I looked into lately was Passiv, a service that is offered for free for all Questrade clients.

In brief, Passiv is a 3rd party web application2 that allows you to track your investments from a single screen, no matter if they are found in multiple investment vehicles (e.g. TFSA, RRSP, RRIF) or if they are found across multiple providers (full list of supported brokers is here)3.

What’s more, it also evaluates your portfolio against a model that you define. For example, if you (like me) have an investment portfolio with a target allocation of 5% cash, 15% bonds, 20% Canadian equity, 36% US equity, and 24% international equity, Passiv can assess your current holdings against these targets, and even do the trades to rebalance the portfolio!

Astute readers will note these are a lot of the same benefits I’m a fan of — and one of the big reasons most of my portfolio is invested in all-in-one asset allocation ETFs. (Are these ETFs unfamiliar? You can read about them here.)

I tried to use Passiv to model my own portfolio, but discovered that all-in-one asset allocation ETFs aren’t really supported by the tool4. Once I thought about it some more, it’s clear why — Passiv really markets itself as an ALTERNATIVE to using all-in-ones. Here’s a clear marketing pitch from Passiv that demonstrates its approach: https://passiv.com/feature-posts/model-portfolios-that-cost-less-than-all-in-one-funds-or-robo-advisors.

So to get the full benefit of Passiv, instead of holding XGRO, you would instead hold the constituent components of XGRO, a fund I’ve broken down previously. This would save you some management fees over time. Passiv helpfully does the math to calculate how much here5.

As a certified cheapskate, I’m always interested in saving a bit of money. But there are some downsides I could see in the Passiv approach:

  • You have to actually DO the rebalancing now and then. Not a big deal, but a fund like XGRO does this as part of their offer6.
  • You have to do the rebalancing no matter what. By this I mean that you have to buy when others are selling, and sell when others are buying. You can’t get overly attached to any one segment of your portfolio, because then you start making bad decisions based on “gut instinct”. Humans are notoriously bad at this7.

On the plus side, you will definitely save on management fees, and you could certainly tweak the contents to avoid products you wouldn’t normally buy (e.g. XGRO has some hedged funds, which I don’t like, typically).

An unknown for me is how foreign exchange is handled. That’s always something I consider since a lot of my retirement savings are in USD. Some experiments required 🙂

Anyway, it’s given me something to think about. I’ll have to see how easy it is to use in practice once all my accounts are back in place. Any Passiv users out there? I’m interested in your take — just drop a line to comments@moneyengineer.ca.

  1. And some (not all) of the funds are now showing up in Questrade, about 3 weeks after starting the process. Switching providers is not for the impatient. ↩︎
  2. WARNING: they don’t have an app. But someone named “Pasiv” does, and it looks very similar. ↩︎
  3. Other benefits include tracking of dividends, performance charts, etc. All stuff Questrade is apparently not very good at. ↩︎
  4. One asset class per stock symbol. My home-grown spreadsheet supports dividing symbols by asset class. ↩︎
  5. The calculation doesn’t include Passiv’s fees for the service, which are waived if you are Questrade client. ↩︎
  6. Per BlackRock “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 at the discretion of BlackRock Canada and/or BTC. Generally, 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.” [source] ↩︎
  7. If you’re interested in how behavior shapes investing, https://www.looniedoctor.ca/2024/12/13/etf-investor-behavior/ is a very good introduction to the topic. ↩︎

What’s in my retirement portfolio (March 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 accounts1:

  • 7 RRIF accounts (3 for me, 3 for my spouse, 1 at an alternative provider as a test)
  • 2 TFSA accounts
  • 5 non-registered accounts, (2 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.

The view as of this morning

As of this morning, this is what the overall portfolio looks like:

Overall retirement portfolio by holding, March 2025

The portfolio, as always, is dominated by AOA and XGRO which are 80/20 asset allocation funds in USD and CAD, respectively. The rest are primarily either cash-like holdings in two ETFs: ZMMK2 in CAD and ICSH3 in USD) or residual ETFs held in non-registered accounts for which I don’t want to create unnecessary capital gains just for the sake of holding AOA or XGRO.

The biggest month over month change is due to switching brokers. My old broker (QTrade) allowed the purchase of HISAs, but my new broker (Questrade) doesn’t seem to offer them4. So I replaced DYN6004 with ZMMK and DYN6005 with ICSH. I made these changes in my QTrade account to avoid any problems with doing an “in-kind” transfer to Questrade.

I’m still in need of USD to pay off some vacation bills, so there is a small hit to SCHF to help out.

Plan for the next month

The asset-class split looks like this

Overall retirement portfolio by market, March 2025

The international equity percentage is below my target of 24%, and so I’ll have to fix that5. VEU looks like it provides exposure to both developed and emerging markets at a rock-bottom price6. XEF would be a perfect fit in the Canadian market, although I should probably also consider XEC to get some emerging markets exposure.The cash position is artificially high because I already did the necessary transactions to get paid out of my RRIF and non-registered accounts (if I did this exercise at the beginning of the month, rather than mid-month, that would disappear). That extra cash will flow to my bank account in the coming days.

A quarterly activity that I’ll be performing this month7 is to shift some of my USD RRIF holdings into my CAD RRIF. I do this to make sure I’m not overexposed to changes in the CAD/USD exchange rate. My current provider reportedly allows me to make RRIF payments natively in USD, so that may be another option to consider. I’ll make an attempt at some point!

One final note: my retirement savings declined 3%8 over the month due to the wild (mostly downward) swings in the stock market, but this leaves me roughly even since my retirement started at the beginning of the year. Here’s the monthly returns for the 2 ETFs that make up the lion’s share of my portfolio9.

XGRO and AOA monthly returns so far
  1. The list is sort-of accurate. I’m in the middle of changing online brokers and since Questrade combines USD and CAD assets in one account, the number of accounts is diminishing. ↩︎
  2. Current 12-month yield: 3.6% ↩︎
  3. Current 30-day SEC yield: 4.61% ↩︎
  4. This specific topic addressed at https://www.financialwisdomforum.org/forum/viewtopic.php?t=125308. ↩︎
  5. The observant reader will note I also said this LAST month. That was before I decided to switch brokers. Once my holdings settle at Questrade, I’ll revisit. ↩︎
  6. MER = 0.04%. VEU has some Canadian exposure too, which isn’t ideal, but I don’t think there’s a USD ETF that excludes both Canada and the USA. ↩︎
  7. And should have done last month, sorry. ↩︎
  8. It would have been worse, except the USD also went up versus the Canadian dollar in the time period. Diversification works 🙂 ↩︎
  9. “Without dividends reinvested” since these two ETFs only pay out quarterly. There haven’t been any yet — next month! ↩︎