Checking in on Canadian portfolios on the Sunday Reads.

Canadian stocks are hanging in there, all considering. In the early stages of a global trade war with Canada as a main target, the Canadian equity market is outperforming U.S. stocks, and the Canadian Dollar is outperforming the U.S. Dollar in 2025. With international equities outperforming U.S. equities it’s no suprise that we can make a very strong argument for a global portfolio. But the global script has been changed with U.S. equities becoming the brake instead of the engine. In this Sunday Reads, we’ll take a look at Canadian wide moat stocks.

For risk-adjusted returns I can find no better approach than the Canadian wide moat portfolio. The strategy would entail investing in companies in the oligopoly or wide moat sectors in Canada. These are sectors with little or no competition: Banking and financial, grocers, railways and utilities (including pipelines and telco stocks).

The telecommunications stocks have been a terrible anchor over the last several years, and eventually moved into freefall in 2022 led by BCE. That decline continues for the most part. Telus and Quebecor are showing some strength in 2025. Cogeco has delivered solid returns over the last year.

Related read from early 2024: Hanging up on my Bell stock.

Also, check out: Investing in Canadian utilities stocks.

It’s my guess that the worst is over for Canadian telco, but only time will tell. They might go back to being solid utilities with generous dividends.

The Canadian Wide Moat Portfolio

Here’s the performance of the wide moat portfolio over the last 10 years, benchmarked against the TSX Composite (XIC).

The wide moat portfolio approach has outperformed with less volatility (standard deviation). But once again, the telcos and other utilities provided a great drag during the rising rate period that began in late 2021.

Of course, Cut The Crap Investing readers were well prepared and well advised, also holding inflation friendly assets such as the Purpose Real Assets ETF (PRA-T) and Canadian oil and gas stocks.

Here’s the returns of the wide moat assets for the full period. Couche-Tard and Brookfield are honourary wide moat portfolio ‘picks. Couche-Tard is a leading constituent of the Canadian consumer staples (XST-T).

Canadian wide moat vs BMO ZLB

In last week’s Sunday Reads – Low volatility outperforms in Canada once again. That wonderful ETF and approach proved its strenght once again, during the recent market volatility.

While the wide moat portfolio still has the edge over the last 10 years, ZLB has greatly outperformed in recent years. ZLB is light on telcos, favours traditional utilities and includes some mining stocks that have performed very well as gold soars to new highs.

Wide moat portfolio shaping

If you like the wide moat / low volatility approach your returns and risk level will be shaped by your sector selection. If you’re in retirement or in the retirement risk zone you might shade to the most defensive sectors such as utilities and consumer staples.

I will cover more on defensive equites for retirement (plus the larger topic of risk management) in the next Zoom presentation for Retirement Club.

We’re are filling the last few spots for Retirement Club Two, starting this month. Let me know if you want more info. Here is a taste or Retirement Club in a post for Findependence Hub.

Retirement Club for Canadians

For my wife’s RRSP I have created a version of a Canadian wide moat portfolio. Given that it’s retirement focused (she’s 3 years or so away from the start date) we have slanted to the defensives and even went as far to exclude the railways that are economically senstive. How you shape is a personal decision.

On the other side of the risk coin Dan at Stocktrades offers his picks for outsized gains in Canadian stocks.

The Sunday Reads

At Findependence Hub Jonathan Chevreau talks RRIF – make sure you have enough cash and consider dialing down risk. Jon is now required to remove funds from his RRIF accounts.

A RRIF represents a departure from the psychology needed to build an RRSP for the future. Suddenly, regular selling is necessary. The RRIF rules mean that in the first year you’ll have to withdraw something like 5.28% of what your balance was at the start of the year (rising to 5.4% at age 72 and every upwards each passing year).

Jon looks into taxes, keeping enough cash in the account, and appropriate asset allocation. We should certainly match the RRIF portfolio risk level to the optimized cash flow plan. That’s another key Retirement Club topic and exploration.

Here’s the more in-depth post on MoneySense.

Dividend Hawk looks at his portfolio dividends, news and quarterly reports. This past week we both had our eyes on Johnson & Johnson …

Johnson & Johnson (JNJ) Reports Q1 2025 Results; JNJ reported Q1 Non-GAAP EPS of $2.77, reflecting a 2.2% increase year-over-year and exceeding analyst expectations by $0.19. Revenue rose 2.3% to $21.9 billion, beating estimates by $330 million. For the full year 2025, Management projects operational sales growth of 3.3% to 4.3%, with a midpoint of $92 billion. Adjusted EPS guidance at $10.50–$10.70.

The markets liked the results. Me too! It’s one of my favourite defensives.

At Banker on Wheels the price of peace and Goldman Sachs’ guide to bear markets.

I will also give this post the thumbs up – Cash is not enough. How bond ETFs protect your portfolio. And the asset management giants.

I am more than happy to hold BlackRock (BLK) as a long time growth pick. We collect fees on investing in ETF markets, and more.

Thanks for GenYMoney for including me in the list of Canadian dividend investing blogs, even though I will educate investors on the alternate universe, and reality … 🙂

The dividends ‘don’t matter’ in the accumulation stage or in retirement.

Dividends are 100% mathematically irrelevant in retirement.

They DO NOT reduce sequence risk, not one percent.

There is no difference between a share sale and a dividend for creating retirement income. I have proven that conclusively in articles. With very clear examples.…

— CutTheCrapInvesting (@67Dodge) April 19, 2025

I know dividends can make us feel good, but we should understand the financial reality. And for sure we should undestand any benefit or detriment while collecting dividends in a taxable account.

At Tawcan, Bob answers 3 common questions from readers.

At Million Dollar Journey, Kyle looks at The Canadian election: taxes, tariffs and housing.

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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.

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For March we received $41.61 in cash. You can select 3 categories for 2% cash back. The rest pays at 0.50%. That’s one of our lowest spending levels of the last several years. Our fuel bill is way down and so is our grocery bill.

That cash went into my TFSA account to buy some HUTS.TO and VDY.TO.

Retirement Club

There are a few spots left for the second group of Retirement Club. We set sail later this month. It is a series of monthly Zoom Presentations, newsletters, plus a secure and private online space where we learn, share ideas and chat. Make sure you’re doing retirement right. It’s also suitable for those who are approaching retirement. Use Contact Dale if you’d like more info.

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.