My Portfolio – Summary

by Mike Holman

This is basically a summary of the last four posts where I described different parts of my portfolio using exchange traded funds.

For the equity/bonds split I decided to have 75% equity and 25% bonds. This is a reflection of my fairly long investment time horizon, I won’t be retiring for about 17 years and will hopefully live a long, long time after that. This was also the recommendation by Bernstein as the ideal percentage of equities to own in a portfolio. There will be quite a bit of volatility with this mix so hopefully my risk tolerance is up to the task!

In the bond section which is 25% of the portfolio,

XSB – 8% – short term bond ETF which I decided was a better choice than a long term bond ETF.

GICs – 7% – can’t get much safer than this.

Bond fund – 5% – MER is 0.65% so a reasonable deal.

Real return bonds – 5% – This will be implemented by buying the ETF XRB – the iShares real return bond ETF.

In the equities section which is 75% of the portfolio we have…

Canadian: 20% – low cost mutual fund + one lot of BMO

U.S. 33% – VTI – Vanguard US equity ETF

International: 33% – new Vanguard EAFA ETF (not out yet) + low cost Europe fund

Emerging Market: 8% – VWO – Vanguard emerging market ETF – I’m still thinking about this allocation.

Reits: 5% – XRE – iShares Reit index or possibly some Vanguard VNQ.

Total MER for the portfolio is 0.38% which is pretty good considering the current MER is about 1.2%. I will be tracking (pun intended) the tracking errors of the ETFs to see if that has a negative effect on the performance. The tracking error on ETFs is basically the difference between the index return minus the MER and the return of the ETF.

So there you have it, I still haven’t actually bought any of the ETFs yet since I’m waiting for the new Vanguard EAFE ETF, so if you have any suggestions for changes…it’s not too late!

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{ 4 comments… read them below or add one }

1 ThickenMyWallet

Thanks for sharing. What bond fund do you own? You may want to check how much short-medium term bonds that fund owns or you may be creating a redundancy in your portfolio.

2 FourPillars

Good point – I’ll have to take a closer look at the fund.

I’d kind of like to go more short term with bonds so I’m not too worried about redundancy in that respect. Ideally we would have all our bond portion in XSB – short term bond ETF.


3 TheFinancialBlogger

Why bothering with 5% bond funds as you found a 7% GIC? Second question, where did you find a 7% GIC? It seems to be a great deal!

4 FourPillars

Thanks for the comment FB. Actually the percentage beside the investment product is the allocation of my portfolio and unfortunately not the return.

You’re right – if I could get a 7% GIC I wouldn’t bother with anything else 🙂

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