We’ll dance around the financial universe in this Sunday Reads. We’ll start with a look at the performance of the core ETF model portfolios on Cut The Crap Investing. Of course given that market returns have been impressive, the core ETF portfolio performance has been stellar. And we see the risk-return proposition at play. Investors who took on more risk were rewarded with greater returns. The big Canadian banks reported this past week and did not disappoint. The bank index was up 1.88% for the week. The financial index up 1.68%. Also, we’ll take a look at the CIBC CAGE.T asset allocation ETF. You can buy a global portfolio with a value tilt. If you’re interested in dancing around concentrated U.S. tech exposure, that’s one very solid option.
As always the following is not advice.
Core ETF Portfolio Performance
Let’s check out the performance of the core ETF model portfolios. Those portfolios are simple but effective. They hold the cap-weighted stock markets of Canada, the U.S. and International developed markets, the risk is managed by the Canadian bond market. You’ll find the specific asset allocations in the above link.
For more on global balanced portfolios and index investing, check out this video.
Here’s a chart looking at the performance of the four portfolio models. We are limited by the start date of XUU.T, the U.S. core equity holding. We begin in February of 2015. It’s a meaningful time period to look at risk and returns as we moved through the modest correction of 2015 and through the 2020 COVID correction.
This bar chart does a nice job of demonstrating the risk-return proposition.
When you create you own ETF portfolio you would rebalance to your intial target weights. You might do that every quarter, twice a year or once a year. Many investors will rebalance when an asset moves out of target. For example, Canadian equities should be 20%, they’ve moved to 25%. We rebalance back to 20%.
Remember, if you want a managed global ETF portfolio you can look to the Canadian asset allocation ETFs. You can ‘have it all’ in one ETF. All you have to do is add money on a regular schedule. Wealth building can be very simple.
Reach out if you need help on how to build an ETF porfolio, or how to access and use an asset allocation ETF.
Managing U.S. tech risk with CAGE
I have penned on the concentration risk in U.S. equities. Tech dominates the index and that creates risk. Many suggest it is similar to the dot com build up and crash of the late 1990s into early 2000s. As you likely know, U.S. stocks then delivered one of the worst market corrections in stock market history.
Don’t forget the lost decade for U.S. stocks.
Of course, no one knows what will happen. On the subject on valuations, here’s an article I wrote for Jonathan Chevreau’s Findependence Hub – –
A challenging time for recent retirees?
There have been times in 2026 when the market has been rotating to value. We see the outperformance of the value approach.
CIBC introduced CAGE.T, an asset allocation ETF with a value tilt. Give it a look. I will be adding a mention of CAGE on the asset allocation ETF page. The is also CAKE.T and CAGR.T for balanced portfolio options.
Canadian banks keep on keepin’ on
The Canadian banks reported earnings this past week. It was another solid quarter. The banking index ZEB.T rose 1.88% for the week, led by TD Bank TD.T and Scotiabank BNS.T.
They all beat earnings estimates.
Here’s the big 5 in 2026.
National Bank is in the lower end in 2026, delivering “just” 23.7%. I can only run five stocks at a time on testfolio.
The Canadian banks and financials XFN.T have delivered incredible results over the last year and more, greatly outperforming (and driving) the market.
The banks are ‘expensive’
The Canadian banks are certainly expensive by historical standards. I discussed that fact when we checked in on Vanguard’s VDY and Canadian blue chip portfolios. From that post …
The big six bank price-to-earnings ratio (on July 16) sat at close to 16.5, well above the two-decade average of roughly 11. That said, compared to the market they are not expensive. My take is that the banks are perpetual out performers because they are always ‘cheap’. Perhaps now they are getting some respect. I would not ignore the big banks or financials. That said, market valuation dynamics suggest that perhaps more muted returns might be delivered over the next several years. I hold financials-heavy VDY in my TFSA and continue to add money on a regular schedule. I’m happy to add to the Canadian banks as well in my wife’s CAD RRSP.
Perhaps it’s no surprise to see that the cheapest Canadian bank saw a nice boost last week. 😉
The Canadian buyback index
Norm Rothery recently posted on the drastic outperformance of Canadian stocks that buy back ample shares. I also found and shared this on Twitter/X …
That’s the price chart. In the link you can find the total return chart, plus the top ten constituents. I will follow and track the buyback index and Canadian buyback universe at Wealth Club, the premium subscription for Cut The Crap Investing.
Wealth Club has a portfolio focus. We’ll continually look at models that have historically out peformed. We’ll track and update the holdings, with Dale’s ideas on how to manage each model. We’re in the last week of the testing phase. Use the Contact Dale button in the upper right of this page if you’d like to be one of the testers. You’ll receive a $75 discount on the $200 first year subscription fee.
More Canadian retirees look to annuities
At Retirement Club for Canadians we recently had a Zoom presentation from Phil Barker of lifeannuties.com. On the Retirement Club YouTube channel we’ll share some key learnings. Here’s video number one. Be sure to follow that YouTube channel.
In future videos Phil will go over types of annuities, how we might use them within the retirement income mix, the tax efficiency of prescribed annuities, inflation protection, annutities in RRIFs, when to buy and more.
Thanks for reading. Have a wonderful Sunday and week. Please reach out with any questions for concerns.
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ETF Portfolios / Stock Portfolios / Retirement Strategies / Wealth Creation / Retirement Club
Retirement Club
You can also join us at Retirement Club for Canadians. It’s most everything you need to DIY your retirement. The Retirement Club offering …
Earn a break on fees by way of of this Justwealth partnership link.
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. That’s a wonderful shop for retirees who want planning and low-fee portfolios. Of course, it’s a great option for those in the accumulation stage as well.
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.
Thanks for reading and watching. Have a great Sunday and week.
Dale
Banks are certainly expensive and the current drawdown is just a start in my opinion. I covered the Canadian banks via the ZEB etf in my latest publication: https://divistockchronicles.substack.com/p/august-2026-charts-wrap-up. I hold my bank stocks, but definitely not adding at this level.