Tag: investing

Mini-Review: PortfolioPilot

RobHLeave a comment

I discovered PortfolioPilot (https://portfoliopilot.com/), a product of Global Predictions, because it’s mentioned in passing on Passiv’s dashboard. (You can read a bit about Passiv over here — the premium version of Passiv used to be offered for free to all Questrade users, but it’s now part of their shiny new subscription service1.)

So what is PortfolioPilot? Let’s hand it over to their AI assistant to weigh in on that question 🙂

PortfolioPilot AI Assistant v1.3 explaining what it is

On Passiv, the data provided by PortfolioPilot is limited to a portfolio score (out of 1000) and a “Forecasted Return” metric. The Global Predictions/PortfolioPilot assessments for my portfolio as presented on the Passiv dashboard are depicted below.

Global Predictions/ Portfolio Pilot’s scoring of my portfolio, as depicted on the Passiv dashboard23

When I headed over to the PortfolioPilot website, I decided to set up an account and take a closer look.

After an initial set of questions to help figure out my risk profile, I was able to enter my entire portfolio manually, since it’s down to just 12 holdings these days. Pro tip: this is a US tool, so if you enter Canadian stocks/ETF, you have to add “.TO” to the name of the holding in question, e.g. XGRO.TO not just “XGRO”.

So once I did that, it spat out all kinds of pretty data. I do like the visualization per ETF held…this one is showing 3 month returns per ETF. Whether or not it’s including dividend payouts is not known.

3 month return of ETFs held in my retirement portfolio

It also gave me a little more insight into my portfolio score4:

Portfolio Score of my retirement holdings, per PortfolioPilot

This view reminds me of how QTrade does their portfolio assessments, something I thought was a plus of that provider. The downside protection warning indicated that I have too much invested in too few holdings, but since I’m on the free version, no further insight was provided. Both AOA and XGRO are tilted towards large US stocks…I suppose my Magnificent Seven holdings are a non-trivial part of the overall portfolio as a result, but I wasn’t able to delve further into this warning. That’s what you get for paying nothing, I suppose.

So some nice stuff here, nice visualizations, customized news based on what’s in your portfolio, all good. But there are some problems I see with their data.

Example one:

PortfolioPilot Asset class view: 35% “unknown”? Blind spot for Canadian ETFs, maybe?

The asset breakdown is very detailed, which I like, but at 35% “unknown”, it’s kinda useless. No way I can see to figure out what ETFs are causing it trouble. Guess I’ll see what support has to say.

They have specific recommendations, which I also like, but again, I see issues:

PortfolioPilot suggested actions

So here, my issue is with action #2. It was recommending replacing XEQT (an ETF all-star) with VE.

Now, setting aside for a moment that VE and XEQT are pretty different in terms of what they hold, (to start, VE has no Canadian or Far East exposure), the REASON the suggestion was made was to save on management fees. PortfolioPilot claimed that VE attracted no fees, making me a sucker for paying 0.20% to hold XEQT. A quick look at the VE page dispelled that idea immediately — the MER is 0.22%. Following their advice would have led me to pay MORE in fees, not less. Shrug.

Anyway, I spent all of 30 minutes with this tool, and although it shows promise, some of the errors I spotted do not fill me with confidence in recommending it to others.

Anyone out there using it? Got other thoughts? Let me know at comments@moneyengineer.ca!

  1. But per some Reddit threads I have seen, users with more assets with Questrade may get it anyway. I await some sort of official communication before commenting further. As of right now, I still seem to have full access to the tool. ↩︎
  2. I dunno, 95th percentile seems “Excellent” to me.
    ↩︎
  3. Not really sure how to interpret that. Does that mean between 8% and 10% annual return, or does it mean -1% to 19% annual return? I would tend to believe the latter, since that’s more in line with an 80% equity portfolio, but no explanation is offered… ↩︎
  4. I suppose my score is a bit higher because it also includes my remaining QTrade holdings, which Passiv doesn’t support. Or maybe not. ↩︎

What’s in my retirement portfolio (May 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
  • 4 non-registered accounts1, (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.

The view as of this morning

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

Retirement holdings by ETF, May 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 were caused by two events that happened over the past 30 days:

  • I did a small rebalancing exercise to reduce my exposure to the Canadian equity market, selling VCN in favor of XEQT. (XEQT is only 23% Canadian equity per dollar invested; VCN was 100%). This sort of rebalancing happens whenever I drift more than 1% off of my target allocations.
  • I took some cash from a HISA and invested it in ZMMK; for reasons too boring to report here, that money was effectively not being tracked in these pages until this month — that anomaly won’t be repeated in subsequent months since ZMMK and ICSH are where I park the “cash” position of my portfolio.

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)

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.

One thing I may do is to try to make shifts2 to get a little more return out of my cash position. US interest rates are quite a bit higher than Canadian rates, and so if my cash position is held in USD, I stand to eke a few more points of return there. TBD.

Overall

My retirement savings had a nice bounce-back this month, looks like I can cancel the mega-pack of pot noodles I had on order.

Monthly retirement savings, as percentage of Jan 2025 value

The salary I collect month to month recovered a bit, too, although not as quickly. That’s the magic of using VPW’s cash cushion — neither boom nor bust months translate into large changes in the take-home pay.

Monthly salary, as percentage of Jan 2025 salary

  1. That’s up one from the previous month. In order to collect on Questrade’s transfer bonus, (which they have yet to pay me, they are apparently in a world of hurt on the IT front) you have to have a non-registered account to get paid into. The other 3 are “normal” — one non-registered account for me, one for my spouse, and jointly held one that serves as a cash cushion to smooth out month to month variations in my retirement salary. Read more about that over at https://moneyengineer.ca/2025/01/31/im-retired-now-how-do-i-get-paid/ ↩︎
  2. With Questrade, all ETF trades are free to make, so I don’t have any real reason not to make such changes. ↩︎

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. ↩︎

Taxes in Retirement

RobH1 Comment

There’s really no avoiding paying taxes, even in retirement. You probably have to do some budgeting to make sure you aren’t being caught unaware, though.

My retirement today is funded from a combination of my spouse’s part-time salary, my/my spouse’s RRIF, selling off assets from my non-registered account, and interest/dividend income from non-registered accounts.

The big difference, as I’m slowly becoming aware, is that aside from my spouse’s paycheque (which has the usual tax deductions / CPP contributions / EI contributions), there is nothing being set aside to pay my tax bill come April 2026. So it goes without saying that I had better make sure there’s a nugget somewhere that I set aside for the upcoming tax bill.

How much should that be? Enter a tool I use to help figure out that sort of thing, referenced in the “Tools I Use” section of this blog: namely, the Basic Canadian Income Tax Calculator1.

The Basic Canadian Income Tax Calculator, from TaxTips.ca

The basic tool, as implied, is pretty basic. It doesn’t include any sorts of deductions aside from the basic personal deduction and dividend tax credits. There’s an advanced calculator that has a bunch more inputs, but for the purposes of this article, the basic tool is good enough.

For the purposes of this tool, your income is in 4 buckets:

  • Other income: This is how 100% of RRIF payments are treated, as well as interest from non-registered assets (e.g. interest from a GIC, bank account, HISA, some ETFs)
  • Capital gains: This is only applicable to non-registered accounts. Note that many ETFs actually generate capital gains and a corresponding T3/T5 slip even if you don’t touch the fund at all2. Larger capital gains are typically generated when you sell an ETF that you’ve held for a while, which includes everything I hold in my non-registered accounts.
  • Canadian eligible dividends: This includes dividends paid by all public companies in Canada.
  • Canadian non-eligible dividends: I don’t have any of those, but if you own shares in a private corporation, you might.

Since my 2025 strategy is to simply collect RRIF minimum payments, I already know what that dollar amount is. I also execute non-registered asset sales monthly to fund my retirement, as I mentioned here. This generates capital gains every month; the exact amount this will sum up to in 2025 is unknowable in advance since it depends on factors like:

  • what specific asset I choose to sell
  • the price of the asset at the time I choose to sell
  • how many shares of the asset I sell at that price

I do track a metric I call “capital gain dollars per dollar of asset sold3” so I can compare the capital gain impact of generating (say) $1000 cash for every asset I own in my non-registered account. So I have a bit of control over the capital gain metric for a given year, but not a lot. My spouse also has non-registered assets in her name, but since she’s earning a salary, I’ll let that be for now.

Some examples might help illustrate the different tax impacts of different withdrawal strategies.

Let’s consider 4 examples, all of which give you 100k gross salary, before taxes:

  • The “RRIF and interest only” strategy: All income for the year is generated by either RRIF payments or interest payments from non-registered accounts.
  • The “non-registered asset sale only” strategy: All income for the year is generated by selling assets in non-registered accounts that create 70 cents of capital gain for every dollar of income thus generated4.
  • The “Dividends only” strategy: All income for the year is in the form of dividends. You’d need a pretty large portfolio to generate 100k of dividend income, just sayin’.
  • The “Blended Approach” strategy: Income comes from a mix of RRIF payments, non-registered asset sales, and dividends. You could play with the percentages yourself; this is an excellent way to see how different liquidation strategies generate (in some cases) very different tax bills.

The table below uses the basic tax calculator to generate the tax bill of the different payment strategies.

Withdrawal strategyRRIF + Interest incomeIncome from asset salesActual Capital GainDividendsTotal Gross IncomeTotal Tax Bill (ON)Avg Tax Rate
RRIF and Interest only100k000100k21.4k21.4%
Non Registered asset sales only0100k70k0100k3.9k5.6%
Dividends only00100k100k3.3k3.3%
A blended approach50k25k17.5k25k100k10.6k11.5%

Fair warning: don’t try to use this table to estimate your own situation. I chose 100k to keep the math easy, but since Canadian tax brackets have different tax rates, the overall gross salary chosen makes a huge difference in the tax bill — enter the numbers yourself!

My retirement planner advised me to target an average tax rate of no more than 15%, and besides the “RRIF and interest only” approach, all of the withdrawal strategies in the table accomplish that. The other takeaway is that on an income of $100k, all of the approaches generate a tax bill in excess of $3k — which happens to be the magic number CRA uses to determine whether or not you have to pay tax in installments.

As a result of doing this exercise, I’ve started a monthly automated contribution to a separate “tax” account5 so that I have money at the ready to pay my tax bill next year. All DIY retirees may want to do the same!

  1. You will probably have to close a bunch of ads before ultimately getting to the page that matters. It’s a forgivable tax to for this useful site, IMHO. ↩︎
  2. If you prefer to avoid annual capital gains, dividends and interest payments, then Global X has ETFs that are designed to do just that. I hold HXT (for Canadian Equity) and HXS (for US Equity) in my non-registered accounts for this reason. ↩︎
  3. This is just the per share capital gain divided by the current share price. I use Adjusted Cost Base to keep track of my capital gains. ↩︎
  4. This is a bit higher than the average of my portfolio, which is about 60 cents for long-held assets. You could choose a different number based on your own holdings. You only pay tax on half of your capital gains, and the calculator knows this. ↩︎
  5. I used Wealthsimple for this since it’s stupidly easy to create a new investment account. And they pay a reasonable amount of interest. ↩︎

Death, Taxes and Estates: Part 3

RobH1 Comment

I am not a lawyer, accountant or tax expert. Your situation may be a lot different than mine. Seek professional guidance if needed.

Part 1 of this blog is found here, and Part 2 is here.

I’m in the tax season stage of wrapping up my Mom’s estate, who died a little over a year ago, a year and a bit after my father died.

Current status

I decided to hire a pro to do the Final Return and the Estate Return since I couldn’t figure out the fine details1 of doing an Estate Return. The Final Return (that’s the easy one, it’s just a regular tax return, except you have to inexplicably file it on paper) would have been within my skill set, but the Estate Return (the one that you have to file to deal with any income generated by the estate after death) was new and confusing to me.

I knew I was going to have to pay taxes on both returns, and using the tax calculators referenced here, I had a pretty good idea of what tax was going to be owed. In essence,

  • The Final Return takes the full value of the RRIF on the day of death as income. This will mean a lot of tax if the RRIF is sizable.
  • The Final Return also assumes any non-registered assets are liquidated on the day of death, which in the case of equity holdings, typically attracts capital gains and the associated taxes2.
  • The Estate Return is going to have to pay tax on any dividends, interest, or capital gains realized by the assets in the estate. Here the tax rate is high, because an Estate is treated as a Trust, and trusts don’t get personal deductions, meaning you get taxed on the first dollar of gains you manage.

A few wrinkles

Submitting the necessary paperwork to the accountant was the usual tedium of getting scans of T-slips, charitable donations and the like to the accountant. I did encounter a few problems.

BMO Investorline Problem 1: Sending T-slips to invalid addresses

My Mom’s assets were all held with BMO Investorline. Imagine my surprise when her retirement home let me know that snail mail from BMO (not BMO Investorline) had arrived at the home. I changed the address of all communications with BMOI to me nearly a year ago at that point, so you can imagine I was less than happy about having to drive across town to pick up what turned out to be a T-slip for the HISA I bought in her self-directed account. At that point, I was a few steps away from livid.

After spending some time with hapless agents who could not tell me why the mail ended up at an invalid address, I penned a note to the formal complaint department of BMO. I just figured that if there was some systemic issue at play here, that at least I could help those who followed me.

The complaints department ultimately admitted it was a screwup on their part and offered their apology. Whether or not it will happen to someone in my shoes in the future is unknown to me, but beware.

BMO Investorline Problem 2: Not providing an RC249 slip

The RC249 is a CRA slip that covers the losses incurred by a RRIF post-death.

It makes some sense: as mentioned above, the owner of the RRIF is assumed to get income equal the the value of the RRIF on day of death. But the RRIF assets aren’t automatically liquidated; they remain invested in whatever they were invested in. If that includes stocks/ETFs and the like, then it’s possible for the value of the RRIF to actually decline post-death. And that is what happened in my case. This loss becomes a tax benefit to the estate return, but only if you have an RC249 to prove it.

Now, the RC249 is clearly intended to be filled out by the issuer/carrier of the RRIF, in my case BMOI. And so, you would expect that to be automatically provided, wouldn’t you? Wrong again.

Another set of back and forth, first with the standard BMOI agents, and then the BMOI estate department, eventually produced a valid RC249 that I could send to the accountant.

Paying taxes owed

As much as I disliked the entire process of working with BMOI’s estate department, the one thing I did like about BMOI was that their non-registered accounts can be linked with a bank account (AccountLink) against which cheques can be written3. (This is something I set up months ago to help distribute some assets early to the beneficiaries). So once the accountants informed me of the eye-watering tax bill (which was pretty much aligned with what I expected), I was able to write the cheques and drop them off with little fuss. Thinking about how you will do that is something to consider in dissolving the estate.

Final Return Notice of Assessment

This was received in pretty short order, a few weeks after it was submitted, and the tax bill was correct.

Next steps

I await the Notice of Assessment for the Estate Account, at which point my accountant will be able to apply for a clearance certificate from CRA. This certificate essentially tells me that CRA considers all business with my mom and her estate closed. Once I have this, I can fully distribute all funds from the estate without having the CRA come after me for monies owed. This takes “up to 120 days” per the website.

  1. More accurately: I couldn’t bear spending hours reading arcane text on various CRA websites hoping I didn’t make a mistake ↩︎
  2. Note that unless directed, the liquidation doesn’t ACTUALLY take place. In my case, I moved all assets to HISA accounts once I gained control of the assets via probate, (a delay of a few months) and then liquidated the assets at the end of 2024. This I did to avoid earning any income from the estate holdings in 2025, which would have delayed the estate return. ↩︎
  3. No matter how hard I tried, I could not convince anyone at BMOI/BMO to send me a debit card for the account, which would have allowed me to “Bill Pay” CRA instead of writing cheques. ↩︎