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iShares Asset Allocation ETFs, Cheaper than Vanguard!

  • Last Updated:
  • Feb 13th, 2019 10:59 pm
Member
Dec 12, 2007
353 posts
64 upvotes
Toronto
What do you guys think of this still now that vanguard has veqt?
Member
Oct 31, 2014
211 posts
84 upvotes
Edmonton, AB
I think VEQT is a horrible option. You're much better to do 30% VCN.to 70% XAW.to
Deal Addict
User avatar
Oct 14, 2001
1622 posts
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GMA
SheaButters wrote:
Feb 11th, 2019 8:56 pm
I think VEQT is a horrible option. You're much better to do 30% VCN.to 70% XAW.to
Why always coming back to this very arbitrary 30 % ? Why not 26.8% or even 31.734% ? As a reminder, Canada's stock market represents ~3% of the world stock market. I know it wouldn't be comfortable with 10x that (your 30%) unless it is artificially tweaked to more global. A good example of that would be Dream Global REIT which is technically a Canadian equity but all of its assets are in Europe. You have also Algonquin Power & Utilities which is now a US company even though it is still HQ'd in Canada.
Member
Sep 14, 2009
394 posts
101 upvotes
Vancouver
SheaButters wrote:
Feb 11th, 2019 8:56 pm
I think VEQT is a horrible option. You're much better to do 30% VCN.to 70% XAW.to
Would love to know your reasoning for that opinion, thanks.
Newbie
Jul 8, 2018
17 posts
17 upvotes
Thanh wrote:
Feb 11th, 2019 9:43 pm
Why always coming back to this very arbitrary 30 % ? Why not 26.8% or even 31.734% ? As a reminder, Canada's stock market represents ~3% of the world stock market. I know it wouldn't be comfortable with 10x that (your 30%) unless it is artificially tweaked to more global. A good example of that would be Dream Global REIT which is technically a Canadian equity but all of its assets are in Europe. You have also Algonquin Power & Utilities which is now a US company even though it is still HQ'd in Canada.
Maybe you should ask Vanguard and Blackrock?
Newbie
Jul 8, 2018
17 posts
17 upvotes
cardero wrote:
Feb 11th, 2019 9:44 pm
Would love to know your reasoning for that opinion, thanks.
They're both cheaper than VEQT. Depending on your portfolio size and frequency of contribution, it maybe worth it to split VEQT. For a taxable account, I think maybe HXT with a even lower MER and swap would be a better choice but at the cost of using only the TSX 60.
Member
Oct 31, 2014
211 posts
84 upvotes
Edmonton, AB
Exactly, it's cheaper, and not hard to manage.

and 30% is just a rough number, you can pick anything from 20-33%

go ask couchpotato for his home bias opinion
Sr. Member
Feb 4, 2017
550 posts
365 upvotes
Toronto
Thanh wrote:
Feb 11th, 2019 9:43 pm
Why always coming back to this very arbitrary 30 % ? Why not 26.8% or even 31.734% ? As a reminder, Canada's stock market represents ~3% of the world stock market. I know it wouldn't be comfortable with 10x that (your 30%) unless it is artificially tweaked to more global. A good example of that would be Dream Global REIT which is technically a Canadian equity but all of its assets are in Europe. You have also Algonquin Power & Utilities which is now a US company even though it is still HQ'd in Canada.
Here is the article:

https://www.canadianportfoliomanagerblo ... al-stocks/

20 to 40% is the recommended range for Canadian holdings. 30% is right in the middle of that range.

Personally, I am at 20%.
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Oct 14, 2001
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CheapMang wrote:
Feb 13th, 2019 10:41 pm
Here is the article:

https://www.canadianportfoliomanagerblo ... al-stocks/

20 to 40% is the recommended range for Canadian holdings. 30% is right in the middle of that range.

Personally, I am at 20%.
We've all seen these articles before but the interesting part is here:
I’ll let you all in on a dirty little secret: no one knows the optimal amount of Canadian stocks that an investor should hold. Not me, not the talking heads on BNN, not anyone. All we can hope to do as mere mortal investors is to make a reasonable guess that we are comfortable with, and stick with it over the long term.
If it was as simple as over-allocating Canada's equity for better returns given the risk level then that would be an advice for everyone globally but you probably don't see Australians or Germans over-allocating CAD equities. I'll stick with 10% and the only reason is the better fiscal treatment of CAD eligible dividends.
Deal Addict
Jan 18, 2014
1157 posts
317 upvotes
Rouyn-Noranda
Thanh wrote:
Feb 13th, 2019 10:50 pm
We've all seen these articles before but the interesting part is here:


If it was as simple as over-allocating Canada's equity for better returns given the risk level then that would be an advice for everyone globally but you probably don't see Australians or Germans over-allocating CAD equities. I'll stick with 10% and the only reason is the better fiscal treatment of CAD eligible dividends.
Do you mind me asking --- what do you hold in your non-registered account? I'm starting to invest more in it given that registered accounts are full.

I'm wondering if I should go with Canadian dividend stocks/ETFs, given the tax treatment, or also buy foreign stocks/ETFs.

I don't have any Canadian content in my registered accounts, only in non-registered, but I'm going to be contributing a lot more going forward to non-registered so it will grow beyond the recommended Canadian allocation overall.

Also, chuc mung nam moi!

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