Tag: finance

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! ↩︎

ETFs for parking your money safely

RobH21 Comments

Since my new DIY broker (Questrade) does not support the purchase of high interest savings accounts (HISAs), I need to find a free-to-trade alternative. 5% of my retirement portfolio is invested in what is characterized as “cash”, but I expect that money to earn some sort of return with essentially zero risk. (Another 15% of my portfolio is in the bond market, which, as we all learned in the last few years, has its downsides1.)

Questrade (like Wealthsimple) offers free trades of all ETFs. So it makes sense for me to go looking for ETFs that invest in safe havens. Here’s what I turned up for investments in Canadian dollars, based on some Google searches and some reading of similar questions posted in the public domain. Not all of them are what I would call “equivalent” to a HISA.

Fund SymbolFund CompanyWhat it invests inMERCurrent annual yield2Commentary
CASHGlobal X“high-interest deposit accounts with one or more Canadian chartered banks”0.11%2.68%This invests in the HISAs I currently invest in
CBILGlobal X“short-term Government of Canada T-Bills”0.11%2.88%Not a HISA but a safe investment
HISAEvolve“high-interest deposit accounts”0.15%2.71%Equivalent to CASH but with a higher MER
MCADEvolve“Canadian dollar high-quality short term debt securities (with a term to maturity of 365 days or less)”0.20%3.17%Very short term bond fund. 18% of holdings have due dates of less than 30 days
ZMMKBMO“high-quality money market instruments issued by governments and corporations in Canada, including treasury bills, bankers’ acceptances, and commercial paper. 0.13%3.6%Not a HISA but a very short term bond fund3. 31% of holdings have due dates of less than 30 days.
CAD ETF Candidates for investing Canadian dollars

Based on this quick analysis, ZMMK looks pretty attractive — a lot of very short term (and hence safer) debt as compared to MCAD, excellent returns. It is clearly a riskier investment than something like CASH or HISA. Between CASH and HISA I lean to smaller MERs every time, so CASH wins. CBIL might be a sort of happy middle ground…a T-Bill ought to be as good as a bank. All of these ETFs have a pretty stable NAV, either $50 or $100 per unit, so there should be little to worry about in terms of capital gains.

Since I hold a lot of USD, (not convinced this is a good idea), I need to do the same exercise for USD safe havens.

Fund SymbolFund CompanyWhat it invests inMERCurrent Annual Yield4Commentary
HISUEvolve“primarily in high interest US dollar deposit accounts”0.11%4.05%This invests in the HISAs I currently invest in
HSUVGlobal X“primarily in high interest U.S. dollar deposit accounts with Canadian banks…not currently expected to make any regular distributions”0.2%n/aGlobal X “corporate class” ETFs convert interest payments into capital gains. This sort of ETF makes sense in a non-registered account to minimize taxes.
ICSHBlackRock“broad range of short term U.S. dollar-denominated investment-grade fixed- and floating-rate debt securities and money market instruments”0.08%4.31%Not HISA but 46% is invested in debt with less than 30 days maturity
MUSDEvolve“primarily in U.S. dollar-denominated high-quality short term debt securities (with a term to maturity of 365 days or less).”0.20%3.49%Similar in strategy to ICSH, but only 20% in debt with 30 days maturity and only 40 holdings.
UCSHGlobal X“primarily invests in high-interest U.S. dollar deposit accounts, which provide a higher interest rate than a traditional USD savings account.”0.16%4.08%HISA-like, based on term deposits
USD ETF Candidates for investing US dollars

ICSH is the clear winner in terms of return, but, like ZMMK, a little riskier than a simple bank account. It has a nice broad portfolio (363 individual holdings) which makes it feel safer. HISU looks like the straight-up HISA replacement.

What ETFs do you use to park your cash? Let me know at comments@moneyengineer.ca.

  1. Excellent graphic of historical returns available at https://themeasureofaplan.com/investment-returns-by-asset-class/ ↩︎
  2. Take the latest monthly distribution, divide by the unit price, multiply by 12. If BoC holds their interest rates steady for the year, you could expect to achieve this rate for the next year. As of March 3, 2025. ↩︎
  3. “Commerical paper” refers to very short term debts, 30 days average maturity. Like a credit card debt, maybe. ↩︎
  4. US based funds like this one report a “30 day SEC yield”, it represents “interest earned after deducting the fund’s expenses during the most recent 30-day period by the average investor in the fund”. ↩︎

Changing your online broker: a guide

RobH8 Comments

I have succumbed to the offer of free money and am in the process of breaking up with QTrade in favor of Questrade1.

From https://www.questrade.com/about-us/programs-promotions on Feb 28, 2025

I had no illusions about making the switch; I knew it was going to be a bunch of work to get it done. But as a retiree with no other sources of income, I figured I could spare the time2.

Switching DIY brokers, on the face of it, isn’t terribly complicated:

  1. Create a login on the new provider
  2. Open appropriate accounts on the new provider
  3. Fill out transfer forms to move accounts with the former provider to the new provider
  4. Set up ways and means of moving money in/out of your new provider
  5. For RRIFs and TFSAs, make sure the successor/beneficiary information is accurate3.
  6. Wait for step 3 to complete
  7. Resume investing and/or decumulating

Here are the things I needed to complete each of the above tasks as I went through the process of opening ten (yes, 10!) accounts4 on Questrade.

Step 1: Creating the login(s)

You’ll want a unique and strong password to do that, and using a password keeper of some kind is the best way to do that. Most providers also offer (or require) two factor authentication, and they usually require a cell phone number 5that they can text. Do set that up at the same time, this stuff is important to protect as best as you can.

If your spouse is joining in on the fun, you’ll need a second login for that.

Step 2: Opening the accounts

There will be some series of provider-dependent steps you will need to go through to identify what kind of account you want, and who will own it. And in order to do that, you’re going to need to have a full understanding of what kind of accounts are at your old provider — what vehicle (e.g. RRIF, RRSP, TFSA) and what owner (me, my spouse, or joint) ?

The owner(s) of a given account are easy enough to determine if you refer to your (monthly, quarterly, annual) statements: the name of the owner will be right up on top. In the case of a joint account6, both of your names will be visible. I’m not aware of any way to change the ownership of an account in the process of a transfer.

This step will be rather tedious. Lots of repetitive form filling, and depending on the sophistication of your provider (and, I think, your province of residence matters), you may have to print (!) and sign — with a pen — documents. In my case, the amount of printing was minimal at this step because Questrade makes good use of DocuSign. But other providers may make you print/sign/take pictures/upload7 instead.

Step 3: Fill out transfer forms

There is usually some delay — a day or two — between step 2 and step 3 since there’s usually some sort of back-office approval process involved8. This will give you the time to make a list of all the account numbers associated with the existing accounts and their rough market value. You’ll need those for the forms.

For me, this step involved a lot of download/print/sign/take pictures/upload9. So make sure you have a working printer, sufficient paper, a way to get forms back to your computer, and patience.

You will have to make an important choice at this step: whether to move the funds as cash, or whether to move them in-kind. “Cash” means you’re authorizing the receiving institution to sell your stuff at your old provider before moving it10. “In-kind” means you’re wanting to keep exactly what’s in the old account already. You can also choose to do a partial transfer at this step, but that’s not something applicable to me.

I chose in-kind since I hate being in a cash position for any period of time. But if you hold GICs or mutual funds (I do not), you should really check to make sure you are able to move those in-kind; many providers have restrictions on that sort of thing.

After the fact, I discovered that Questrade does not support HISA accounts. I am hoping that this does not create unintended consequences or delays.

Step 4: Set up ways and means to move money in/out of your accounts

Different providers do this differently. In my experience, most support online bill pay to get money into the accounts (like, for example, to make a TFSA or RRSP contribution), and EFT to get money out (like, for example, a RRIF payment, something rather important to me).

To set up an EFT transfer, you’ll need your banking details (institution number, transit number, account number) and a void cheque. Most banks have a way to do this directly online, no need for an actual physical cheque, if anyone still uses those.

An increasing number of providers11 seem to support direct credential connection between their platform and your banking platform using a third party like Plaid. I freely admit this sort of thing gives me serious heebie-jeebies, and will default to using upload of void cheques whenever possible.

Step 5: Make sure successors and beneficiaries are named for RRIF/RRSP/TFSA accounts

This will make the life of your heirs much easier and deny the government some of the $$$ associated with estate administration fees since properly documented successors and beneficiaries are NOT considered part of the estate. Read all about it in my previous post.

Step 6: Wait

The claim I am getting from Questrade is to allow 20 days for assets to move. This seems totally ridiculous on the face of it. I’ll report back on how long it actually takes. 1-2 weeks is more typical in my limited experience.

While waiting, I’ll complete the forms to make sure I have trading authority over my spouse’s accounts. This should allow me to see all the accounts she owns from my login. This is handy, since I’m the one who does most of the mechanics of making this whole “getting paid in retirement” thing work.

Step 7: Resume investing/decumulating

After making sure everything moved from your old provider to your new provider, as expected, of course.

You’ll probably want to ask your new provider to refund you any transfer-out fees charged by the old provider at this step.

Given Questrade doesn’t support HISAs, I’ll have to find an ETF alternative, which, thankfully, are plentiful. Other than that, I’m not anticipating big changes in the portfolio or the approach.

At this point, I’ll also have to (probably) close out the QTrade accounts and figure out how I’ll get my tax slips from them next year.

All this probably took 8 hours over the course of a few days. So not a trivial amount of time, but the promotional bonus will make it worthwhile12.

  1. And while both brokers start with the letter “Q” and are frequently confused with one another, I can assure you they are different. ↩︎
  2. And the resultant hourly rate if all goes well is better than what I made when I was paid a salary… ↩︎
  3. I covered that topic in this post. ↩︎
  4. For me: Investment account, RRIF account, Spousal RRIF account, TFSA. Same for my spouse. And then there’s one more joint firewalled investment account that we use for VPW’s cash cushion. That retirement decumulation strategy was covered in a previous post. And a family RESP. ↩︎
  5. Not the most secure or even convenient option; Questrade also offered using a standalone app like Microsoft Authenticator, which made me happy. ↩︎
  6. Here I hit a bit of a wrinkle: QTrade has joint non-registered accounts, but Questrade only has joint non-registered margin accounts. I am hopeful (but unsure) that I can successfully transmogrify one to the other. ↩︎
  7. My workflow for this: take picture on iPhone, Airdrop to Macbook, convert .HEIC files to pdf (and possibly, re-export to reduce file size), upload. This step alone would defeat many folks. ↩︎
  8. In my case, TFSA/non-registered was almost immediate, but 2 days in, I’m still waiting for the RRIFs to be approved. There are some extra regulations involved with registered accounts, it seems. ↩︎
  9. This is probably dependent on both providers involved as well as the type of account involved. The RESP transfer requires some CRA form to be filled out. ↩︎
  10. Possibly attracting high transaction charges — you may want to liquidate the assets yourself instead. ↩︎
  11. Questrade and Wealthsimple to name two ↩︎
  12. Note to the political class — maybe it’s time to take a look at the regulations here to streamline this process? Eight hours of effort to change a provider does not seem like it’s in the consumer’s best interest ↩︎

What’s the deal with AOA?

RobH6 Comments

***Updated numbers February 2026***

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

Previously ,I covered what’s in XGRO, which is an all-in-one you can purchase on the Canadian market. Because I also happen to have a lot of US dollar-based retirement savings, I have the majority of those funds invested in AOA. AOA is an 80/20 fund 1 offered by BlackRock. It seems that this sort of all-in-one is not as popular in the US as Canada, not sure why2. I see offerings from State Street that sound similar. BlackRock has other members of their asset allocation family with different equity percentages — there’s something for everyone!3

I thought it would be interesting to see what, exactly, is underneath every $100 you invest in AOA. So by reading AOA’s ETF description, following the ETF descriptions of what’s inside AOA, and doing a little math, I came up with the following breakdown4:

FundWhat is it?How much?Colour Commentary
IVV US stock coverage that tracks the S&P 500 Index, 500 of the largest US companies $44.53 of your $100 investment

(of which ~3.50$ is in Nvidia, ~$3 in Apple, and ~$2 in Microsoft, with ~$1 in Amazon, Alphabet, Meta, Broadcom and Tesla)		The Magnificent 7 and 493 other companies
IDEVBroad international (ex-US) developed market stock coverage that tracks the MSCI WORLD ex USA IMI Index, about 2250 companies $23.02 of your $100 investment

(of which ASML gets 42 cents, Roche gets 26 cents…)		This also includes a tiny slice of Canada…top holding is RBC at 18 cents of your $100
IUSBBroad US Bond market exposure, about 16,000 bonds from government and corporate entities$16.36 of your $100 investment

(of which $6.45 is in US Treasury, $1.44 is in the Federal National Mortgage Association…)		12 month trailing yield is 4.18%, not too shabby
IEMG3500 or so international companies from emerging markets, following the MSCI Emerging Markets Investable Market Index $9.29 of your $100 investment

(of which $1.06 is in Taiwan Semi, 42 cents is in Samsung..)		23% China, 22% Taiwan, 16% South Korea, 14% India, …
IAGGAbout 5800 international bonds tracking the Bloomberg Global Aggregate ex USD 10% Issuer Capped (Hedged) Index5$2.83 of your $100 investment

(of which 30 cents is Japanese T-Bills)		Trailing 12 month yield = 3.27%, has lost a full point in the last year
IJHUS Midmarket stocks that track the S&P MidCap 400 Index$2.59 of your $100 investment (of which 2 cents is in Lumentum, who I’ve never heard of)25% Industrials, 15% Financials…
IJRUS Small Cap stocks that track the S&P SmallCap 600 Index $1.22 of your $100 investment
(largest holding is Solstice Advanced Materials)		IJH+IJR+IVV is sort of similar to ITOT
Main components of AOA as of February 2025

Like XGRO, investing in an all-in-one like AOA provides you with exposure to a bunch of different asset types across many different geographies in one product, including all of the “hot” stocks you read about ad nauseam. Diversification under one banner.

The big difference from XGRO is the very tiny representation of Canada overall. I worked it out to about 2.5% of the overall number, which makes sense given the size of Canada on a global scale.

I came across the “Three Fund Portfolio” popularized by Bogleheads over 15 years ago. AOA and its family members is more or less that concept.

  1. Shorthand for “80% equity, 20% bonds”. There remains a lot of disagreement about the appropriate asset allocation, e.g. https://www.bogleheads.org/forum/viewtopic.php?t=210178 ↩︎
  2. Instead, I see a lot of “target date” retirement ETFs, which are in some ways similar, but lower the equity percentages as you get closer to the target date. ↩︎
  3. There’s also AOR (60% equity), AOM (40% Equity) and AOK (30% Equity) ↩︎
  4. Compare with the XGRO breakdown at https://moneyengineer.ca/2025/01/30/whats-the-deal-with-xgro/ ↩︎
  5. That’s a mouthful. ↩︎

USD Assets in the retirement portfolio. Good idea?

RobH9 Comments

I’m not sure when I first made a purchase of a USD-denominated ETF. Probably over 10 years ago. Clearly, I thought it was a good idea, because as of today I find that 57% of my retirement savings1 are denominated in US Dollars.

And unlike other people I’ve talked to, there’s no underlying rationale for that. I’ve never earned employment income in USD and I don’t own property in the US. So why?

I’m a cheapskate.

I started investing in USD based ETFs simply because they were a much better deal than their Canadian equivalents. This is less true now than it used to be, but it’s still true. Take for example the comparison between comparable USD and CAD ETFs that track the same index:

IndexWhat’s in itUSD ETFMERCAD ETFMER
S&P 500Top 500 US stocksIVV0.03%VFV, XUS0.09%
Russell 20002000 mid-market US StocksVTWO0.07%XSU2, RSSX30.36% for XSU, 0.25% for RSSX
FTSE Developed ex USGlobal stocks outside of the USASCHF0.06%VDU0.22%
USD versus CAD ETFs tracking the same index4

The Canadian market has become more competitive, and MERs have come down, but given the size of the US market, it’s still cheaper to invest there.

I’m not a very savvy cheapskate.

So although the MERs of US ETFs were stunningly attractive, I failed to consider the cost of currency conversion. For this I blame naivete as well as a lack of transparency on the part of my provider. It was not possible for me to easily figure out how much each CAD to USD transaction was costing me. A good estimate is about 1.5% the cost of the transaction, but some providers make this much cheaper5.

I also had USD investments in my TFSAs, which, from a tax perspective, isn’t the best idea.

Over time, I discovered the joys of Norbert’s Gambit to do currency transactions on the cheap and I became more savvy. And I eliminated all US holdings from my TFSA.

Preparing for Retirement

In preparing my portfolio for retirement (steps I took are outlined here), I did seriously consider converting everything to CAD in the interest of keeping things simple. I did not, and here’s why:

  • I figured that having ready access to USD would be rather useful to retired me, since I do vacation there. And I had made other preparations in light of that, setting up a USD credit card and USD savings account for RRIF payments to go to.
  • Although I knew that having USD RRIFs would make getting paid in retirement more complicated, I thought I had worked out a plan with my provider6 that would make extracting USD RRIF payments achievable, with some effort on my part.
  • I sort-of liked having some of my investments in USD since it’s a stable currency. Usually.
  • I also liked the additional boost I got from USD HISAs. (That’s probably an anomaly but one I’m happy to take advantage of)
  • I could change my mind at any time.

Current Reality

This isn’t working like I thought it would.

My provider decided to backtrack on allowing me to extract USD from my USD RRIF;7 we’re still going back and forth on that front, but my friends at QTrade are on my naughty list as a result. I’m not hopeful.

What it means practically is that although the value of my USD RRIF is used to calculate my RRIF minimums, I can only withdraw RRIF payments from the Canadian side. At present, the Canadian side of my RRIF will fund my RRIF minimum payments for a while, but at some point I’ll have to use Norbert’s Gambit to move funds from the USD RRIF to the CAD RRIF.

My Advice

I don’t think that holding USD assets in retirement — especially in a RRIF — is a great idea for the DIYer. Unless platform providers give really clear processes8 for how to extract that money from a USD RRIF, expect trouble.

At some point, I will either switch providers to find one that supports my requirements9, or I will convert everything to CAD. Right now, I have a process that works, but older me I expect will find it too complicated.

  1. Majority of the USD holdings are in my / my spouse’s RRIF; small portion is in my non-registered account. ↩︎
  2. Not an apples to apples comparison, admittedly. This ETF is hedged so it’s less impacted by changes in the CAD/USD exchange rate but this comes at a cost. ↩︎
  3. This is ALMOST the same thing; RSSX uses a capped version of the index ↩︎
  4. And try as I might, I couldn’t find a USD ETF that invested in the TSX/S&P 60. Not really surprising, and my USD retirement holdings have very limited Canadian exposure. AOA has about 2.4% Canadian exposure. ↩︎
  5. Notably, Interactive Brokers and lately, Wealthsimple especially if you hold more than 100k with them. ↩︎
  6. Involving multiple phone conversations and multiple emails ↩︎
  7. You may ask, “what’s the point of having a USD RRIF if you can’t extract USD from it”? I had the same question… ↩︎
  8. RBC says they support it and so does Questrade. ↩︎
  9. I had sorely hoped Wealthsimple could be that provider, but (sigh) they don’t support spousal RRIFs at the moment. ↩︎