We’ll check in on the Canadian Essentials Portfolio. It’s a very simple but concentrated 10-stock Canadian Blue Chip portfolio. It’s about as blue as you can get. The portfolio concept was courtesy of political science professor Mike Henderson who singled out the companies for the essential roles they play in the Canadian economy. He identified the companies in the year 2000 and it formed the core of the retirement investments for he and his wife. The cumulative 10-year total return on these stocks to 2010 was 305%, greatly outpacing the 72% for the TSX composite index. Has that outperformance continued? We’ll take a look.
As always the following is not advice. Consider the following as ideas for consideration as you manage your own portfolio. And, past performance does not guarantee future returns.
Here’s the ‘Essential’ holdings from 2000 …
Canadian National Railway (CN-T), Canadian Pacific Railway (CNR-T), Enbridge (ENB-T), TransCanada Pipelines, now TC Energy, (TRP-T), Royal Bank of Canada (RBC-T), TD Bank (TD-T), Bank of Nova Scotia (BNS-T), Canadian Utilities (CU-T), Fortis (FTS-T) and Emera (EMA-T).
It’s railways, financials and utilities. It’s a case of boring staple blue chips beating the crap out of the broader market. No surprise here.
Boring Wealth Building
In more detail, I cover and track the incredible but incredibly boring Canadian Blue Chip portfolios at Wealth Club for Canadians.
And there, I’ve added this chart. Here’s the performance of the Essentials courtesy of testfolio.
Yes, the portfolio has continued its winning ways. And if we Zoom out …
That said, the Essentials Portfolio has underperformed modestly over the last several years. The brief inflationary period that arrived in 2021-2022 changed ‘things’.
We can largely ‘blame’ two events:
- Utilities don’t like rising inflation and higher borrrowing costs
- The TSX’s energy and commodities holdings have outperformed
My personal Canadian Blue Chip portfolio also includes Canadian oil and gas stocks that I put on the table for you back in late 2020, or about 600% ago.
Yes, those Canadian oil and gas stocks would have given the Essentials a nice lift.
Where’s the beef?
I’m surprised that the Canadian grocers and their Oligopoly was not originally added to the Essentials Portfolio. Like, ya gotta eat, right? Kind of essential.
iShare consumer staples XST-T covers the grocers and a few other essential retailers. From inception it has beat the Essentials and the TSX. Put the grocers in your portfolio shopping cart. Add grocers, and now you have the Canadian Wide Moat Portfolio.
- Financials
- Railways
- Broader Utilities (including pipelines and telcos)
- Grocers
To my eye, that’s a better-balanced blue chip portfolio, with lower risk. Consumer staples are known to be the most defensive equity sector. And they are essential.
While Cut The Crap Investing is always more than happy to put these ideas on the table, if you want to take a closer look under the hood consider the premium service – Wealth Club. There is a modest annual fee, with no obligation to renew.
- How do you create a blue chip portfolio?
- How do you manage a blue chip portfolio?
- How much do you need to invest to reach your goals?
- Should you invest in your RRSP, TFSA or Taxable account?
- How do you consider valuations?
- How do you build the portfolios using ETFs?
- How do you add U.S. and International diversification?
- What is a reasonable geographic allocation?
- How do you manage risk?
We hope you’ll join us. But as you likely know I’m also happy to answer any questions you might have about the Essentials Portfolio. Fire away in the comment section, or use the Contact Dale button.
Recent must reads:
Why has SCHD outperformed so dramatically in 2026?
Are we in for an extended bout of high inflation?
How I bought stocks and left the ETF fees behind.
Yes you can create your own retirement cash flow plan.
More Sunday Reads
Jonathan Chevreau took at look at BMO’s new offering of target cash flow ETFs. While the original T-series use the BMO asset allocation ETFs (ZBAL-T and ZGRO-T) to generate monthly income at a 6.0% annuallized rate, the new offerings are startling perhaps.
At Retirement Club we’ve offered Zoom presentations on ZBAL.T and ZGRO.T. I’ll take a closer look at the new offerings, but the payouts seem a bit rich for my liking. That said, perhaps they could be used in modest fashion. There might not be a lot of income longevity at those payout ratios.
Dividend Hawk takes a look at his portfolio, plus a few reads and videos.
Dan at Stocktrades looks at 6 stocks in trouble.
Broken, or an investment opportunity?
I’ve managed stock portfolios for quite some time. One of my greatest takeaways is that the market is usually right about a broken business (and a stock that they’ve taken down and are taking down). They’re on to ‘something’.
And Rhys at Well Built Wealth says the first year of retirement isn’t what you think.
At Retirement Club we stress that it’s so important to create a retirement by design. We have a dedicated space on the topic in our online community space and we’ve recently created a Retirement Readiness Checklist (we’ll share that in a week or so). Here’s the readiness check-in section.
Thanks for reading. Have a wonderful Sunday and week.
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And check out Wealth Club, the premium stock portfolio focused, wealth-building offering at Cut The Crap Investing.
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 …
The sensible advice route
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.
Questions? Click on Contact Dale.
