I wanted an optimized portfolio, better than the old Canadian Couch potato of XAW/VCN/ZAG.
Precisely, I wanted to fix the high MER of XAW/VCN/ZAG (0.145%), and avoid foreign withholding taxes as much as possible.
Global MER with 50% of investments in each registered account: 0.061
Product
Category
Proportion
MER
XUU.TO
Stocks - U.S.
35%
0.07
VCN.TO
Stocks - Canada
40%
0.05
ZAG.TO
Bonds - Canada
25%
0.09
TOTAL
100%
0.067
Product
Category
Proportion
MER
ITOT
Stocks - U.S.
35%
0.03
IDEV
Stocks - Developped Countries
28%
0.04
IEMG
Stocks - Emerging countries
12%
0.09
ZAG.TO
Bonds - Canada
25%
0.09
TOTAL
100%
0.055
Global MER with 50% of investments in each registered account: 0.083
Product
Category
Proportion
MER
XUU.TO
Stocks - U.S.
45%
0.07
VCN.TO
Stocks - Canada
40%
0.05
XEC.TO
Stocks - Emerging countries
15%
0.28
TOTAL
100%
0.094
Product
Category
Proportion
MER
ITOT
Stocks - U.S.
45%
0.03
IEFA
Stocks - Developped countries
30%
0.07
ZAG.TO
Bonds - Canada
25%
0.09
TOTAL
100%
0.057
Solution 3 - 100% stock (XEQT equivalent) Global MER with 50% of investments in each registered account: 0.057
Product
Category
Proportion
MER
XUU.TO
Stocks - U.S.
50%
0.07
VCN.TO
Stocks - Canada
50%
0.05
TOTAL
100%
0.06
Product
Category
Proportion
MER
ITOT
Stocks - U.S.
45%
0.03
IEFA
Stocks - Developped countries
45%
0.07
IEMG
Stocks - Emerging countries
10%
0.09
TOTAL
100%
0.054
Transfer money in TFSA, buy XGRO
BEFORE THE END OF YEAR - MUST BE DONE BEFORE TFSA DEADLINE OF DECEMBER 31st
Sell enough XGRO to cover previous year maximum RPSP room
Fees: 10$
Transfer that cash from TFSA to RRSP Convert RRSP cash from CAD to USD using Norbert Gambit
Fees: ~15$Buy RRSP positions with passiv
Put all tax returns in TFSA, the room will be there as money was moved out of TFSA before december 31st
Buy TFSA configured distribution with Passiv
Category
New
Old
XGRO
VGRO
Stocks - U.S.
35.00%
31.55%
38.32%
35.41%
Stocks - Canada
21.40%
25.00%
19.36%
23.60%
Stocks - Developped Countries
12.60%
12.83%
19.57%
15.46%
Stocks - Emerging countries
6.00%
5.52%
4.00%
5.59%
Bonds - Canada
25.00%
25.00%
18.43%
19.93%
Sector
NEW
OLD
XGRO
VGRO
Financials
19.40
20.29
18.46
19.28
Technology
18.04
16.74
17.62
17.94
Industrials
11.94
12.29
12.12
12.39
Consumer Cyclical/Discretionary
9.55
9.37
9.79
9.49
Energy
8.73
9.36
8.18
8.39
Health Care
8.73
8.07
9.62
8.55
Materials
6.24
6.66
6.06
6.49
Communication
6.13
5.90
6.17
6.01
Consumer Defensive/Staples
5.78
5.80
6.18
5.79
Real Estate
2.74
2.71
2.91
2.84
Utilities
2.73
2.83
2.88
2.82
Category
MER
U.S. YIELD
WTAX
TOTAL
Cost on 100k$
New (Option 1)
0.061%
0.53200%
0.03728%
0.09828%
$ 98.28
New (Option 2)
0.083%
0.51975%
0.03375%
0.11675%
$116.75
New (Option 3)
0.057%
0,54475%
0.03750%
0.09450%
$ 94.50
Old portfolio
0.145%
0.49436%
0.07415%
0,21915%
$219.15
XEQT
0.200%
0.58950%
0.08843%
0,28843%
$288.43
XGRO
0.200%
0.60162%
0.09024%
0,29024%
$290.24
VGRO
0.240%
0.43554%
0.06533%
0,30533%
$305.33
The new portfolio will result, on a $200,000 portfolio:
A $240/year saved from the old portfolio
A $400/year saved from XGRO/VGRO/XEQT
From that, we need to substract the $25.00 fees for the end of the year transfer, but we still have lower fees.
