I have a friend approaching 80. He is a very bright guy and so when he told me that he handed his assets over to a manager, I stopped and listened. I have steered cleared of managers since getting badly burned by London Life and its mismanagement of my accumulated insurance policy savings. Was I wrong?
My friend's manager, whom I gather collects a percentage of the investment under management, has put my friend's savings in a number of mutual funds. I assume this means he pays a fee on each mutual fund plus the overall portfolio management fee.
All these fees sound onerous. Still, if the manager delivers returns that best an asset allocation ETF like XEQT, I can see the benefit. XEQT, a complete global equity portfolio in one ETF, has delivered strong returns over the past year. YTD return is 15.97% and the 1-year return is 22.37% when the dividend is included. The fund has an annualized return of 12% since its 2019 inception.
Is XEQT suitable for my friend? Maybe not. At his age, he is no longer comfortable with the large losses a pure equity investment can suffer. That said, XEQT has some stablemates that add bonds to the mix.
For more info please click here: All-In-One ETF Portfolios.
Like my friend, I am old. Losses that once would have been recovered with the passing of time may not be recoverable today. For an example, think of Algonquin Power and Utilites Corp. (AQN). Given enough time, say a dozen years or more, my AQN losses might be erased. Today, it is quite possible my time will run out before a full recovery is realized.
The thing is, unlike my friend, I don't care. All I am concerned with is income, dividends. To this end I invest in from 20 to 30 individual dividend paying stocks. I pretty well ignore the day to day price changes. Yes, I have lost a lot on AQN and I've lost a lot buying Telus and Bell as well. But, in the grand scheme of things, the losses are manageable and the income solid. I make more than five percent on my retirement investments.
Note: the following was copied from my spreadsheet. My investments are broken down into sectors and I try to keep my exposure to no more than the percentage shown. Each separate investment also has a cap. I will leave it to you to set your own limits. The one piece of advice I have is do not put more than five or six percent in any one stock. Generally, I start getting uncomfortable when the exposure is greater than three or four percent. An investment shown in a bold, italic font is one that I do not own at this time but it is on my buy list.
| Sectors |
| Financials 30% |
| BANK OF MONTREAL 4% |
| BANK OF NOVA SCOTIA 3% |
| CDN IMPERIAL BK COMMERCE 4% |
| BROOKFIELD AST MGMT-A LVS 3% |
| BROOKFIELD CORP CL-A LVS 3% |
| NATIONAL BANK OF CDA 4% |
| ROYAL BANK OF CANADA 5% |
| TORONTO DOMINION BANK 4% |
| Total of the above 30% |
| Utilities 20% |
| ALGONQUIN PWR&UTILITIES 2% |
| ALTAGAS LTD 3.5% |
| BROOKFIELD INFRASTRUCTURE PTNRS 3.5% |
| CANADIAN UTILITIES LTD. 3% |
| EMERA INCORPORATED 4% |
| FORTIS INC 4% |
| Total of the above 20% |
| Communication Services 10% |
| BCE INC 1.5% |
| COGECO COMMUNICATIONS INC 1.5% |
| QUEBECOR INC CL-B SV 2% |
| ROGERS COMMUNICATIONS INC 2% |
| TELUS CORP 3% |
| Total of the above 10% |
| Energy 10% |
| ENBRIDGE INC 3.5% |
| PEMBINA 3% |
| TC ENERGY 3.5% |
| Total of the above 10% |
| REITs 8% |
| BMO EQL WGT REIT INDX ETF 4% |
| CI CANADIAN REIT ETF 4% |
| Total of the above 8% |
| U.S. S&P 500 12% |
| ISHRS CORE S&P500 IDX ETF 12% |
| Total of the above 12% |
| International – Mainly Europe 4% |
| VIDY |
| Total of the above 4% |
| Materials (Agriculture) .75% |
| NUTRIEN (NTR) |
| Total of the above .75% |
| Metals and Mining (Industry) 1% |
| LABRADOR IRON (LIF) |
| Total of the above 1% |
| Food Products (Consumer Staples) .75% |
| ROGERS SUGAR (RSI) |
| Total of the above .75% |
| Transportation |
| ALGOMA CENTRAL (ALC) .75% |
| MULLEN GROUP (MTL) .75% |
| Total of the above 1.5% |
| Cash 2% | |
| Cash 2% | |
| |
| Total of all -- 100% |
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