Tag: diversification

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! ↩︎

What’s in my retirement portfolio (Feb 2025)

RobH4 Comments

This is a (hopefully monthly) look at what’s in my retirement portfolio. The original post is here.

Portfolio Construction

The retirement portfolio is spread across a bunch of accounts:

  • 7 RRIF accounts (3 for me1, 3 for my spouse, 1 at an alternative provider as a test)
  • 2 TFSA accounts
  • 5 non-registered accounts2, (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 high interest savings accounts (list available to me shown here)

The view as of this morning

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

Overall retirement portfolio by holding, February 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 holdings in HISAs (DYN6004/5 in CAD and 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 a small re-balancing exercise. I replaced some of my XGRO (which is an 80/20 equity/Bond asset allocation fund) with XEQT (a 100% equity asset allocation fund). I do re-balancing any time my asset allocation drifts more than 1% off my target allocations3. The trigger for me was an overweighting in bonds, which had drifted to represent 16% of my portfolio instead of the desired 15%. Upon reflection, the reason was obvious: both AOA and XGRO are 20% bonds, and if I want only 15% bonds, I will periodically need to fund an all-equity alternative. The net effect will be that you will see more XEQT show up in the portfolio over time.

The observant reader will also notice a bit of a shift between DYN6004 and DYN6005. The reason? I raided some USD from DYN6005 to pay my US credit card bill and replaced it with CAD in DYN6004 using the spot FX rate at the time. Seemed the easiest way to get some USD4 without having to resort to my friends at Knightsbridge.

SCHF percentages drifted down a bit since that’s the ETF I’m selling in my non-registered portfolio to augment my monthly RRIF payments. That will continue for the next few months at least since the USD payouts are needed to fund a few holidays5 I’m taking that are billed in USD.

Otherwise, nothing interesting to see in the month to month changes.

Plan for the next month

The geographic split looks like this

Overall retirement portfolio by market, February 2025

The international equity percentage is below my target of 24%, and so I’ll have to fix that. SCHF seems a good choice in USD6 since it’s free to trade with QTrade. XEF would be a perfect fit in the Canadian market.

A quarterly activity that I’ll be performing this month is to shift some of my USD RRIF holdings into my CAD RRIF. This wasn’t something I had planned to do but since my provider has backtracked on allowing me to get paid out of my USD RRIF in USD, I needed a way to keep the USD exposure at a constant-ish level in the overall portfolio. I’ll talk about the USD in my portfolio in a future dedicated post.

One final note: my retirement savings continue to grow even though I’m now actively removing assets out of it. On paper, this makes perfect sense since an 80/15/5 portfolio ought to grow at a rate greater than my rate of removal. In practice, of course, it’s rather stock market dependent. Here’s the monthly returns for the 2 ETFs that make up the lion’s share of my portfolio7.

XGRO and AOA monthly returns so far8
  1. For me, that’s one personal RRIF that has 2 accounts, one for CAD, one for USD, and one spousal RRIF. My spouse has one spousal RRIF in two currencies, and a personal RRIF. The alternative provider RRIF exists because I wanted to give Wealthsimple a try. ↩︎
  2. For me, two because one each for CAD and USD. The 2 joint accounts are my cash cushion accounts for the VPW methodology outlined here and here. ↩︎
  3. Completely spreadsheet-driven. I don’t trade on news, analyses, gut feelings, hot tips, or guesses. ↩︎
  4. I did hesitate a bit because the interest rate on DYN6005 is over 1% higher, but given the amounts involved, I’m clearly overthinking things. ↩︎
  5. All booked before this current tariff nonsense. Sorry. ↩︎
  6. Although it does have a 9% exposure to the Canadian market so not 100% “international”. Hard to beat the MER of this, though. ↩︎
  7. I don’t think this tool accounts for FX so it’s probably not totally accurate. Check out https://moneyengineer.ca/tools-i-use/ for other useful tools. Canadian dollar gained 1.4% against the USD in the past 30 days, per https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates/ so that will reduce the effective return of AOA by the same amount. ↩︎
  8. “Without dividends reinvested” since these two ETFs only pay out quarterly. There haven’t been any yet. ↩︎

Why you can fire your advisor: Asset allocation ETFs

RobH29 Comments

Summary: Asset allocation ETFs1 let you buy exactly ONE fund to meet your investing needs. Buy ONE fund, and forget about it. Really? Really.

In the run-up to getting ready for retirement, I greatly simplified my portfolio. On the Canadian dollar side, it’s almost all invested in two places: XGRO and DYN6004 (a Canadian high-interest savings account). On the US dollar side, it’s almost all invested in two equivalent places: AOA and DYN6005 (a US high-interest savings account). XGRO is an example of an Asset Allocation ETF that trades in Canadian dollars, whereas AOA is an example of an Asset Allocation ETF that trades in US dollars. The overarching objective of my retirement portfolio is to keep allocations at 5% Cash and the rest in XGRO or AOA. Effectively, this puts me at about 80% stocks.

What’s an Asset Allocation ETF?

Very simply, they are a kind of ETF that allow you to make one investment decision based on your desired risk profile. Risk is a personal decision, based on factors like timeline before needing the money, how much you agonize over stock market fluctuations and so forth.

More risk means better long-term growth prospects means more stocks.

Looking for higher long term growth? Choose an asset-allocation ETF that has a higher percentage of stocks. Looking for lower long term growth with less volatility? Choose an asset-allocation ETF that has a lower percentage of stocks.

There are many Canadian providers out there who provide their own families of asset allocation ETFs.

Which provider you choose may boil down to which is the most convenient / least expensive to buy and sell. For example, BMO Investorline clients can buy and sell the BMO family with no charges, while QTrade clients can trade the iShares family with no charges.

I personally don’t think that there is much to differentiate each of the families. Each provider is just trying to capture your business. So whether you buy ZEQT or XEQT or HEQT or VEQT 2 probably doesn’t matter very much in the big picture.

I summarized them below:

ProviderETF SymbolsRead more
BMO100% Stocks: ZEQT
80% Stocks: ZGRO
60% Stocks: ZBAL
40% Stocks: ZCON		https://bmogam.com/ca-en/products/exchange-traded-funds/asset-allocation-etfs/
iShares100 % Stocks: XEQT
80% Stocks: XGRO
60% Stocks: XBAL
40% Stocks: XCNS
20% Stocks: XIC		https://www.blackrock.com/ca/investors/en/learning-centre/etf-education/asset-allocation-etfs
Global X3100% Stocks: HEQT
80% Stocks: HGRW
60% Stocks: HBAL
40% Stocks: HCON		https://www.globalx.ca/asset-allocation-etfs
TD90% Stocks: TGRO
60% Stocks: TBAL
30% Stocks: TCON		https://www.td.com/ca/en/asset-management/insights/summary/all-in-one-td-etf-portfolio-solutions
Vanguard100% Stocks: VEQT
80% Stocks: VGRO
60% Stocks: VBAL
40% Stocks: VCNS
20% Stocks: VCIP		https://www.vanguard.ca/en/product/investment-capabilities/asset-allocation-etfs

The magic? Reallocation.

The real magic of asset allocation ETFs is that they do the work of reallocation for you. This is subtle, but crucial. Automatic reallocation takes the emotion out of investing, and means you’re buying low/selling high, every quarter. What?

Take for example XGRO. Per the product brief you can see that its target composition is

  • 20% XIC (the TSX 60)
  • 36% ITOT (the S&P total US stock market, about 2000 companies)
  • 20% XEF (international developed stock market)
  • 4% XEC (international emerging stock market)
  • 16% Canadian bonds (XBB and XSH)
  • 4% Non-Canadian bonds (GOVT and USIG)

The observant reader will note that 80% of this list is made of stocks, divided up over multiple geographies. Anyway, the “target composition” is key here. What this means is that every quarter stocks get bought and sold to re-establish the targets. If the US stock market goes on a tear while the Canadian stock market is tanking, the US gains will be locked in and the Canadian market will get picked up at a discount. It’s a perfect system. No emotion. Just ratios. No work on your part.

What’s the catch?

There is a small cost associated with owning an asset-allocation ETF. Most charge you about 0.20% every year. If you instead decided to own the underlying assets you could probably save on the order of 0.10%. (This is, more or less, what I had in place before I started simplifying my portfolio). But that assumes that you do the rebalancing yourself in a timely way, and the trading fees are negligible.

Wrap up

Asset Allocation ETFs are a great way to get a diversified, risk-appropriate, emotion-free, inexpensive investment portfolio. They are the ultimate tool in the DIY investor’s toolkit.

  1. Also known as “all in one” ETFs. Also known as “funds of funds”. They all mean the same thing. ↩︎
  2. Geez, no points for originality on the ETF names… ↩︎
  3. Global X has additional ETFs on the same page that add leverage to amplify returns. I don’t use them, since the amplification works both ways — in good AND bad markets. ↩︎