Hello everyone.
My portfolio is a mess. I was throwing random things at a wall with no rhyme or reason - its a suprise its been doing as well as it has. I'm in the process of educating myself, yet the amount of information to absorb out there is quite vast, and it will take a while before I can see the big picture.
My current setup is as follows:
Unregistered: 18% vcn, 8% cash
TFSA:24% vxc, 5% zre
Lira: 10%vti, 6% vab
RRSP:12% vab, 14% vun
~250k
Here i am holding duplicate funds in different wrappers and have too much US exposure, as well as getting hit with currency conversion from VTI in my lira. TFSA and RRSP are maxed and RRSP room will be limited going forward due to pension contributions, so most of the cash inflow will be into unregistered. I would like to hold 80% equity and 20% safe stuff with as few index etfs as possible, and preferrably tax shelter equity over bonds in my tfsa/rrsp. With that in mind, a streamlining that makes sense to me would be as follows:
Unregistered: 15% vcn, 20% hbb
TFSA: 25% vun, 5% zre
Lira: 10% vun
RRSP: 25% xef
I will eat a bit of extra tax by holding HBB in my unregistered account but will get the benefit of tax sheltering higher earners. US index in tfsa and international in RRSP. I assume that duplicates of XEF and VUN would have to be purchased in unregistered to rebalance weightings across the board eventually.
I understand that there is still a lack of direction in my ramblings, but I'd at least like to get my portfolio to a semi-functional state with your advice while I work on understanding why things are the way they are. Let me know what you think, thanks.
Self managed portfolio, correcting mistakes.
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Re: Self managed portfolio, correcting mistakes.
If you hold vun like you do in your tfsa, you are giving up withholding tax
You can hold vti in rrsp and xef in tfsa if you want to better optimize for taxes.
You can hold vti in rrsp and xef in tfsa if you want to better optimize for taxes.
Re: Self managed portfolio, correcting mistakes.
Agree with pqpq. Might consider adding some IEMG to the RRSP or LIRA to round out the international exposure(XEF is just EAFE).
You may want to consider the after tax value of your accounts. 50k in a TFSA and 50k in an RRSP do not have the same value once withdrawn. The government owns part of your RRSP and LIRA.
Not sure what you mean by "eating a bit of extra tax by holding HBB". HBB does not distribute any income and will only generate a taxable event upon disposition if you have realized capital gains. You do pay extra fees for this, roughly 2.5x the cost of ZAG(.25% vs .10%).
You may want to consider the after tax value of your accounts. 50k in a TFSA and 50k in an RRSP do not have the same value once withdrawn. The government owns part of your RRSP and LIRA.
Not sure what you mean by "eating a bit of extra tax by holding HBB". HBB does not distribute any income and will only generate a taxable event upon disposition if you have realized capital gains. You do pay extra fees for this, roughly 2.5x the cost of ZAG(.25% vs .10%).
- IdOp
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Re: Self managed portfolio, correcting mistakes.
ZAG has a relatively high MER of 21 bp; better choices would be XBB or VAB in the 10 to 12 range.
Re: Self managed portfolio, correcting mistakes.
BMO's ZAG is now at 14bp (of which 0.09 is management fee) https://www.bmo.com/gam/ca/investor/pro ... file%2FZAG
There has been competition this year amongst the players in bringing MERs down on bond ETFs.
There has been competition this year amongst the players in bringing MERs down on bond ETFs.
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- IdOp
- Veteran Contributor
- Posts: 3873
- Joined: 16 Feb 2006 11:27
- Location: On the Pacific sea bed, 100 mi off the CA coast.
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Re: Self managed portfolio, correcting mistakes.
Thanks for the updated info.
Re: Self managed portfolio, correcting mistakes.
The competition keeps moving the goal posts. Which is good for us.
Note that XBB management fee is also 0.09% but they don't list MER for some reason??
https://www.blackrock.com/ca/individual ... -index-etf
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Re: Self managed portfolio, correcting mistakes.
ZAG's MER is 0.10% going forward. The fact the lowered management fee hasn't been reflected for a full year in their documents is irrelevant to someone considering buying it now.
Thanks for pointing out the fee reduction. They likely aren't posting the MER because it would reflect the old management fee that is no longer being charged and create some confusion as evidenced in this thread. It too will/should be 0.10%.Note that XBB management fee is also 0.09% but they don't list MER for some reason??
Re: Self managed portfolio, correcting mistakes.
ZAG / VAB / XBB
doesn't really matter, difference in MER is negligible and changes (drops) constantly as they compete.
doesn't really matter, difference in MER is negligible and changes (drops) constantly as they compete.