When the Canadian asset allocation ETFs were introduced several years ago, the investment community hailed them as “game changers”. That is, the final nail in the coffin for high-fee / low-performance Canadian mutual funds. The asset allocation ETFs are well-diversifed, managed global portfolios available at 5 risk levels. The fees represent about a 90% off sale compared to the typical mutual fund. The fees range from 0.17% to 0.25%. It’s a no-brainer for most Canadians. You can open an account with a discount brokerage, enter one ticker symbol (XEQT for example), enter an amount, press Buy and own thousands of companies around the globe. Are these the best funds available in Canada? Yes, that’s a rhetocial question.
Here’s an ode to XEQT from Loonies and Sense.
Cut The Crap Investing is the only blog that tracks the performance of the leading asset allocation ETF providers. I also sort them by risk level. For example, you’ll see the performance comparison between the balanced portfolios from Vanguard and BlackRock and the rest of the AA gang. You’ll also see the surprising outlier “winner” that includes modest amounts of bitcoin in their offerings.
Check out the ultimate Canadian asset allocation ETF page. Here’s a teaser, the balanced growth models. They range from 80% stocks / 20% bonds to 90% stocks / 10% bonds. The returns listed are average annual.
Build your own portfolio
While the asset allocation ETFs are the easiest, hands-off way to go. You can certainly build your own ETF portfolio. You’ll save modestly on fees, and you will be allowed some flexibility on how you would like to shape the portfolio. I’ve offered examples of core portfolio models.
Here’s the updated (to the end of 2024) total returns for the core Canadian ETF Portfolios on Cut The Crap Investing. The build your own models have outperformed the asset allocation ETFs, in modest fashion.
Friends don’t let friends pay high fees
Cutting your fees and using low fee global portfolios can literally be life changing. Please send friends and family this post. And let them know I’m happy to answer any questions they have on the portfolios or on how to say goodbye to their high-fee mutual funds. It’s a joy. They can use the Contact Form on any post. That sends an email to me, Dale, the Chief Disruptor at CTCI 😉
What happens next for U.S. stocks?
OK, that’s another rhetorical question, but it’s fun to look at past market history. Momentum can be a powerful force, but past performance is no guarantee of future returns.
What happened after back-to-back (near) 25% plus years for U.S. stocks.
There’s no telling of course, as to what will happen it’s a coin flip. But since WWII these strong back to back years were followed up with another solid year. It’s the same, or better, if we look at back-to-back 20%’ish plus years.
Here’s another interesting table sorting returns by return category from 1874. Average returns are a rarity.
And a very interesting (Deep Dive) thread covering some key periods for U.S. stocks
And I’ll repeat this Tweet from last week.
Earnings could be quite encouraging if Trumps gets out of his own way and does not ‘go crazy’ with global tariffs and mass deportations.
In case you missed it, check out last week’s Sunday Reads – Hello 2025. I added a very good report from National Bank that shows the estimates for Canadian stocks and sectors.
New Year. New taxes.
Happy New Year, and not-so-happy new taxes for Canadians in the National Post. On the plus side, especially for a poor blogger like me 🙂 the basic personal amount, the amount of your income that will not be taxed federally now ranges from $14,538 to $16,129 depending on your overall income. On the RRSP front – the contribution threshold is going up to $32,490 in 2025 from $31,560 in 2024, as well as any available contribution room left over from previous tax years.
My top ten performers in 2024
My top ten holdings in 2024. Walmart is a shocker. Also the Canadian holdings returns are greater due to the strength of the U.S. dollar.
More Sunday Reads
At Findependence Hub Mark Seed takes a look at the great things you can do with your TFSA space. Remember you have another $7000 of contribution space in 2025 if you’re age of majority.
On this blog, here’s more on how to use your TFSA account. Be sure to check out the RRSP vs TFSA calculator in that post. While the TFSA is an incredible gift to Canadian investors, you’ll be surprised at how often the RRSP comes out ahead.
Here’s the week in review from Dividend Hawk. We shared some Telus dividends this past week. Though my dividend haul has been cut in half over the last several months. Readers will remember that I sold half of my BCE stock in March. I hung up on the rest of it soon after. I then said goodbye to half of my Telus holding as well. These days, many analysts are suggesting that most of the damage is done. We may be close to a bottom for a sector that just got wrecked. I am keeping an eye on the ‘situation’.
Move on over to the week in review at Banker on Wheels. You’ll find a look at U.S. exceptionalism and U.S. vs global stocks.
Here’s the Loonie Doctor blog highlights for 2024.
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Thanks Partners
Earn a break on fees by way of many of these partnership links.
CANADA’S TOP-RANKED DISCOUNT BROKERAGE
Cut the Crap Investing readers can earn a break on fees at Questrade by way of that partnership link. At Questrade, you can buy ETFs for free. It’s a great place to build your stock portfolio.
Here’s Canada’s top-performing Robo Advisor, Justwealth. You can get advice, planning and low-fee ETF portfolios all at one shop.
Consider Justwealth for RESP accounts. That is THE option in Canada with target date funds that adjust the risk level as the student approaches the College or University start date.
OUR SAVINGS ACCOUNTS
Make your cash work a lot harder at EQ Bank. RRSP and TFSA account savings rates are at 2.5% and 3.0%. You’ll find some higher rates on GICs up to 4.00%. They also offer U.S. dollar accounts. We use EQ Bank, they have been awesome.
OUR CASHBACK CREDIT CARD
We make between $40 to $70 every month! And that’s on everyday spending. There are no fees with …
The Tangerine Cash Back Credit Card
For December we received $52.46 in cash. You can select 3 categories for 2% cash back. The rest pays at 0.50%.
That cash went into my TFSA account to buy some bitcoin and chips / CHPS.TO, ha.
While I do not accept monies for feature blog posts please click here on the mission and ‘how I might get paid’ disclosures. Affiliate partnerships help me (try to) pay the bills for this site. But they don’t, ha. That will allow me to keep this site free of ads and easy to read.
You can’t say you’re the only blog to track the performance of asset allocation ETFs. Rob had this performance review on his blog and it was out before yours. https://boomerandecho.com/investment-returns-for-2024/
Thanks Jim, I was not aware 🙂 There are no cateogory comparisons, but it’s good.
Dale