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35M, 35F, kids
We currently hold a significant amount of CASH.TO as we are moving from saving our money in HISA to investing it : it represents around half of our current holdings, and is decreasing every month at a pace we are confortable with.
Excluding CASH, we have 2 model portfolios :
• Registered accounts, based on XEQT with reduced exposure to Canada: •• 60% XUU •• 25% XEF •• 10% XEC •• 5% XIC
• Non registered accounts, based on registered accounts with a tilt toward Fama and French factors: •• 75% of portfolio is based on the model of the registered accounts •• 17% AVUV •• 8% AVDV
Those portfolios are balanced with new money or if they drift significantly (ie ±10%) from target.
Long term, we plan to keep this investment strategy based on market capitalization.
Any reason why you didn’t put your factor (US listed) ETFs in your RRSP? I think that is the preferred placement for tax treatment, and also simplicity when you have to withdraw.
Why reduced Canadian exposure? A bit more home country / 🇨🇦 bias has portfolio advantages.
I still have yet to jump on Avantis factor funds, but have been considering them. My hesitation is the additional complexity, cost, and risk may not be worth the slight improvement, and the timeframe to realize the factor benefits can be very long (so you have to be a convicted and very patient investor).
Looks like a solid, low cost, rational long-term portfolio 👍
I have my own incorporated business, and until recently, I paid myself mostly with dividends, so with a very small RRSP, I don’t see the point in moving to ITOT yet: even with Norbert’s Gambit, the currency exchange still wouldn’t be that interesting. I’ll probably consider that again when my RRSP room will be larger but the added complexity isn’t worth it yet.
While I understand the advantages of having an home bias to Canada, it still doesn’t feel right : a lot of my life is already exposed to Canada (work, home, …) so it seems a bit too much like putting all my eggs in the same basket. As Justin mentioned in the article, I should expect around the same level of returns over the long term, and do not mind the extra volatility in the mean time, so going the pure global market-cap weighting route seems to be more coherent from my perspective. I’m losing a bit on the tax side of things, but that’s a sacrifice I make consciously.
I spent some time reading the academic material and also on the Rational Reminder forum, so I feel pretty convinced about Fama & French factors, but quite frankly, that’s more like the cherry on top of the chocolate sauce on top of the icing on top of the cake. Keeping these investments keeps me interested in all of this, but if I ever get bored of it, I’ll probably move back to a 100% cap weighted portfolio and get the same results.
