The Canadian asset allocation ETFs continue to shine. And their popularity continues to surge. In fact, iShares all-equity asset allocation ETF, ticker XEQT, is now in the top ten for Canadian ETF holdings. There are legions of fans who are entirely devoted to this wonderfully simple and effective ETF. “Just XEQT and chill” they chant. It’s all they need to reach their goals. If they’re in the accumulation stage with high risk tolerance, they are likely not wrong. Over the last three years XEQT has averaged 20.68% per year. Over the last 5 years XEQT’ers have bagged an average of 13.36% per year. Not bad for a portfolio that takes an average of 0 hours and 0 minutes to manage each year. Are asset allocation ETFs the best portfolios for Canadians? If you’re saying yes, I’m not going to argue with you.
Here’s the Reddit Group – Just buy XEQT. Even well-known financial planners are getting in on the act.
Mark offers that he has most of his investment assets in VEQT. As you can see from my latest performance update, they are essentially the same.
XEQT and VEQT hold the companies that make up the broader stock markets in Canada, the U.S. and around the Globe. For example, XEQT holds almost 8,700 companies. VEQT holds over 13,500 companies by way of these individual ETFs …
Asset allocation ETF performance comparisons
Here’s the Asset Allocation ETF performance page on Cut The Crap Investing. I’ve updated the returns to the end of December 2025. You’ll find the total returns of the AA portfolios from the Canadian ETF providers. Plus, you’ll see comparison tables for each risk level. You’ll also find a chart that suggests how you can select the appropriate portfolio to match your time horizon and risk tolerance.
Here’s what AI offers for the sector breakdown for XEQT.
A typical sector breakdown, though exact percentages fluctuate:
- Technology: Around 20-21% (Often the largest sector)
- Financial Services: Around 20-21% (Also a major component)
- Industrials: Around 11-12%
- Consumer Cyclical: Around 8-10%
- Healthcare: Around 7-10%
- Basic Materials: Around 7-8%
- Communication Services: Around 6-8%
- Energy: Around 5-6%
- Consumer Defensive: Around 4-6%
- Utilities & Real Estate: Smaller allocations, often around 2-3% each
To create lower risk portfolios, the AA providers add bonds. Here’s the iShares suite …
You can see the risk-return proposition at work. Mostly, over longer periods, the greater the risk (more equities) the greater the returns.
Asset Allocation ETFs in retirement
The good news is, you can use the AA portfolios in the accumulation stage and in retirement. In this post I looked at – Retirement funding at 4 risk levels over the last 10 years. The bulk of portfolio retirement research is based on core balanced portfolio models.
We demonstrate and investigate these types of retirement funding scenarios at
Given that the AA ETFs are offered at 5 different risk levels you can then select the ETF that matches the marching orders of your retirement cash flow plan. For example you might use XBAL in your RRSP as you employ the RRSP meltdown strategy.
The RRSP meltdown strategy. A Canadian retiree’s greatest hack?
You’re using XEQT in your TFSA as you don’t plan on touching that account for decades.
An optimized retirement cash flow plan will often have you feed your TFSA as it is a tax-efficient and estate-efficient vessel.
It’s not that difficult when you follow the simple strategies that set you up for retirement success.
AA and chill? Absolutely.
More Sunday Reads
At Findependence Hub a look at the two most powerful forces in the market. Of course that involves some guesswork. The beauty of the managed asset allocation ETFs is that you can ignore every prediction, every economist, every portfolio manager, every BNN Bloomberg or CNBC episode.
If you’re in the accumulation stage get yourself a copy of the new Wealthy Barber book and then turn to the asset allocation ETFs as David Chilton suggests.
At Booming Encore their top 10 articles of 2025.
For those who are into active management and stock selection for their Canadian portfolio Dan at Stocktrades ranks the 32 largest companies on the TSX …
A case for the all-weather approach on The Retirement Manifesto.
The week that was for Dividend Hawk’s portfolio. I see that we shared in some dividends from Pepsi and CNQ.
For the first time in a long time, I wrote an article for Seeking Alpha. I looked back at my ‘suggestions’ when we were heading into 2025. They turned out to be helpful – embrace some Canadian value stocks, international stocks and gold. Manage that U.S. home bias.
At MoneySense Jason Heath of Objective Financial Partners answers – Should I hold my house in a trust? Jason was kind enough to deliver a wonderful estate essentials presentation for us at Retirement Club.
At Tawan, Bob offers his 10 most important lessons learned from 25 years as an investor.
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Here’s Canada’s top-performing Robo Advisor, Justwealth. You can get advice, planning and low-fee ETF portfolios all at one shop. Canadians can have it all.
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 rates are at 1.50%, other savings rates up to 2.75%. You’ll find some higher rates on GICs up to 3.85%. They also offer U.S. dollar accounts at 2.75%. 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 $56.56 in cash from everyday spending. You can select 3 categories for 2.0% cash back. Remaining categories pay up at 0.50%.
That cash went into my TFSA account to help buy some CBIL-T, CHPS-T and bitcoin. I always top up the cashback and make a few investments.
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I believe Mark McGrath invests using XEQT not VEQT.
Hi Can you comment on the video put out from Vanguard regarding the recommending of the 40/60 AA over the 60/40 going forward as they estimate the returns will be very similar but with significant less risk? Thanks!
Hi Edward, that is simply guess work. Guess work does not usually work. No one knows where bonds are going, no one knows where stocks are going, no one knows where interest rates are going, no one knows what inflation will be.
I’m surprised the champions of passive investing would make that suggestion.