Canadian Money Forum banner

1 - 6 of 6 Posts

·
Banned
Joined
·
91 Posts
Discussion Starter #1
Are these areas needed in a portfolio, if so why? from what I am reading they are better off in a RRSP not in a taxable account (correct?)

I currently have VTI and VEA, they seem very much on the low risk side of US and International equity (if there is presently such a thing)

would I be better off keeping these two ETFs, maybe reducing the monies in them and expand my Canadian Equities or just sell them all and invest in other areas?
 

·
Banned
Joined
·
91 Posts
Discussion Starter #2 (Edited)
the term balanced portfolio, does that refer to all investments in all accounts (e.g. RRSP, TFSA, non-registered) or is each account need to be balanced

according to the literature I have been reading, an aggressive portfolio has up to 50% of US and International Equities, does this sound correct?

is it advantageous to have a larger number of ETFs in an aggressive portfolio or keep number smaller, I am guessing smaller to keep overall MER lower, is there a disadvantage to have maybe 4-5 ETFs making up a balanced portfolio (for all accounts, RRSP, TFSA, non-registered)
 

·
Banned
Joined
·
424 Posts
I would recommend diversifying to Canadian and Emerging Markets also. Value and smaller style funds have higher risk and usually higher return. REITs or real estate ETFs would add further diversity.

When you get into any of these areas (Canada, Emerging, value, small) you will end up paying a little more in fees, but you get some exposure to higher growth. However, when you diversify among these classes the diversification will give your portfolio lower overall risk.

I tend to distrust cap weighted indices because of their vulnerability to bubbles like the two we had in the past decade; and I want to diversify away from large caps, so that takes me away from the lowest MER funds. Today I bought PDN (Int Mid Value, .75%), SCZ (Int Mid Balanced, .40%) and DGS (Emerging Mid Value, .63%).
 

·
Banned
Joined
·
424 Posts
Regarding balancing between my accounts, I put 3 Canadian income trusts in my TFSA. My margin account is a hodgepodge, but it should be dividend payers to pay the interest, or high growers for capital gains. In my SDRSP I hold my US, international and emerging ETFs. Also I do all my rebalancing in the tax sheltered accounts so I am not triggering capital gains all the time.

When the TFSA gets bigger it will need to be balanced on its own.
 

·
Banned
Joined
·
424 Posts
I consider small cap, value and emerging markets to be aggressive. Investing heavily in large cap blend US and international stocks is a bet that what did poorly in the last ten years will do well in the next ten, and it is no more aggressive than investing in Canada.
 

·
Registered
Joined
·
3,197 Posts
the term balanced portfolio, does that refer to all investments in all accounts (e.g. RRSP, TFSA, non-registered) or is each account need to be balanced

according to the literature I have been reading, an aggressive portfolio has up to 50% of US and International Equities, does this sound correct?
Each account does not have to be balanced separately, and you will find discussions on this forum about how it is better to keep some types of assets in Tax-sheltered accounts if you have the choice. But it is simpler, particularly as you cannot move funds between registered & non-registered accounts.

Definitions of aggressive vary. The ratio of Fixed Income to Equity is usually the determinant, simply the percentage of foreign equity.
 
1 - 6 of 6 Posts
Top