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 18.88% per year. Over the last 5 years XEQT’ers have bagged an average of 13.94% per year. Not bad for a portfolio that takes an average of zero hours and zero 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 XEQT. As you can see from my latest performance update, they are essentially the same. Here’s the all-equity gang in Canada.
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 September 2026. 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 …
Retirement Club for Canadians
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 might use 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 the most tax-efficient and estate-efficient vessel.
At Retirement Club we offer these tables so that you’ll know how all of your major assets are treated from investment accounts to the principal residence and cottage.
Asset Allocation ETF monthly income funds
Wait, it gets even better. BMO has created a Target Cash Flow Series (T-series) that delivers monthly income at a 6% spend rate, from a few of their asset allocation ETFs.
Creating retirement income is easier than you’d think when you have these wonderful investment options and follow the simple strategies that set you up for retirement success.
AA and chill? Absolutely. Perhaps in the accumulation stage, and in retirement.
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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.
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