# Super Downsizing an Investment Portfolio



## dogleg (Feb 5, 2010)

How would you suggest going about downsizing a portfolio of diverse investments into a super- simple but sensible form? Currently there are commodities -mining -oil etc, etfs , tfsa , Rifs and misc. unregistered equities. I have managed this mix very well for years but want something my wife can understand and handle without stress. Turning it over to a financial institution to bleed off fees is not something I care to do. I guess it comes down to : what to sell and what to keep. All suggestions appreciated.


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## Zoombie (Jan 10, 2012)

Classify by index and/or sector and then replicate the portfolio using index funds, holding the same approx. weight as the original portfolio?


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## cainvest (May 1, 2013)

dogleg said:


> How would you suggest going about downsizing a portfolio of diverse investments into a super- simple but sensible form? Currently there are commodities -mining -oil etc, etfs , tfsa , Rifs and misc. unregistered equities. I have managed this mix very well for years but want something my wife can understand and handle without stress. Turning it over to a financial institution to bleed off fees is not something I care to do. I guess it comes down to : what to sell and what to keep. All suggestions appreciated.


Depends on what your idea of a "super- simple but sensible form" is? Are we talking about selling it all and getting something as simple as 3-5 ETFs?


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## atrp2biz (Sep 22, 2010)

You would have to consider tax implications as well for the non-registered components. If you're going to keep some assets while selling others, I would try to mix and match winners and losers to minimize any tax impact.


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## Ihatetaxes (May 5, 2010)

My seven figure portfolio is made up of a handful of simple and cheap ETFs. XIC, VTI, VEA, VWO, DEM, XRE, XSB and a simple 5 year GIC ladder. Doesn't get much simpler and works for me.


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## larry81 (Nov 22, 2010)

Consider theses two options:

*Tangerine investment fund*
https://www.tangerine.ca/en/investing/investment-funds/index.html

*ShareOwner*
https://www.shareowner.com/index.html


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## dogleg (Feb 5, 2010)

These are enormously helpful ideas to work with. I look forward to getting more. Many thanks and I know I will have more questions.


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## larry81 (Nov 22, 2010)

If your wife feel comfortable placing trades with a discount brokerage, the usual ETF's should be considered.

If not, then your choices are the following: Tangerine, ShareBuilder, TD E-Series mutual funds, Mawer Balanced fund, PHN fund.

Too bad Vanguard dont offer asset management like they do in the US (for a very reasonable 0.30% annual fee !)


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## My Own Advisor (Sep 24, 2012)

Consider putting some of the money into three funds:

VCE in RRSP or TFSA for CDN.
VTI in RRSP for US.
VXUS in RRSP for International.

Add some bonds or GICs.

Non-registered equities, consider a CDN dividend-paying ETF whereby all the distributions qualify for the dividend-tax credit, such as ZDV. If the ETF doesn't pay just distributions, but return of capital, etc., then take your tax receipt and drop the numbers into your tax software every year, then you're done.


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## Rusty O'Toole (Feb 1, 2012)

Advice from Warren Buffet, echoed by other mega rich people "index everything". In other words, if you do not manage your investments or business, buy index funds. They beat 80% to 90% of actively managed funds including hedge funds.

Look for funds that mimic popular indexes like the Dow or S&P and have the lowest fees. ETFs are the best.


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## dogleg (Feb 5, 2010)

My apology for the tardy reply. I have been tied up with surgery and am just getting back in action. I appreciate your helpful suggestions. In a few days I will provide some detail about my holdings and get some more help from you good folks. Cheers.


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## james4beach (Nov 15, 2012)

dogleg said:


> How would you suggest going about downsizing a portfolio of diverse investments into a super- simple but sensible form? Currently there are commodities -mining -oil etc, etfs , tfsa , Rifs and misc. unregistered equities. I have managed this mix very well for years but want something my wife can understand and handle without stress.


Great idea! I've done a lot of this over the years. It's amazing how much you can compress down a complex looking portfolio. Avoid the temptation to excessively break down into sectors... often it's splitting hairs, unless for instance you specifically have a high energy % that's well beyond the broad index weightings. Most portfolios have tons of redundancy and boil down to some mix of: S&P 500, TSX Composite, MSCI EAFE plus fixed income portion. Most likely, you can boil your portfolio down to around 4 or 5 ETFs.

A simple starting point is to build a big spreadsheet and break down each investment into asset class (Canadian equity, US equity, Canadian bonds, etc). Write the dollar amounts exposed to each asset class -- don't forget any fixed income amounts that may be contained (e.g. a balanced fund is half fixed income). Then look at the aggregate totals in each asset class.

You can now pick index funds like e-series or ETFs that achieve those exposures. e.g. XUS for S&P 500 (US Equity), ZCN for TSX Composite (Canadian equity). For the fixed income portions, I suggest avoiding bond funds and instead putting the money into high interest savings and a 5 year GIC ladder.

As a further refinement, if you have specific sector exposures, you can again aggregate some sector exposures across all your holdings and add things like XEG or XMA if you want to boost, for example, energy exposure and mining exposure. But I would start with the broad categories that just call them "Canadian equity" etc, and be cautious about being too detailed in how you break down sectors. The sector funds always carry higher MERs.


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## dogleg (Feb 5, 2010)

I understand one needs an entire picture of the investments to properly assess them but as a simple point of discussion here are the 'parts' of one RRIf: XTR, XCV, XSB, XBB and a CIBC monthly income Fund with about a 50/50 split between the two parts. Any suggestions as to how this could/should be simplified (taken in isolation)?


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## james4beach (Nov 15, 2012)

Just checking: I presume you have the Monthly Income Fund and XTR because they both generate rather high cashflows, and you want that cash extracted out of your investments so that you can withdraw annually from the RRIF. Am I right about this?


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## dogleg (Feb 5, 2010)

J4B : That is partly true but as these investments evolved I made an effort to get rid of most of my mutual funds and that was true for all the rest of our investments too as I will show later. So in this case these exchange traded funds were simply picked as replacements for the other mutual funds in the RIF. Now I would like to simplify further and reduce the number of 'parts' in the RIF. And that is my goal for all our other investments as well. Hope this makes sense.


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## dogleg (Feb 5, 2010)

I guess the only thing that would be helpful would be to present the total selection of investments in our portfolio in the various categories and ask you folks for ideas and ways to reduce and simplify them. Would that be asking too much ? With the exception of the commodities it is mostly conventional I would guess. Thanks again for your help and suggestions.


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## dogleg (Feb 5, 2010)

Here are all the components of the total portfolio that I want to compress. Two mutual funds: CIBC monthly income, and RBC Can. Div. Three GICs . XTR,XCV,XSB,XBB,CBO,XDV. Primary stocks: PFE,SU, G,POT, plus other misc. Hopefully I can eliminate a number of these exchange traded funds and maybe move out of the two mutual funds as well. Picking the replacements is the issue. As I mentioned these components are spread over TFSA, RIFs and general unregistered accounts so it becomes rather complicated I suppose. Anyway, I welcome your input.


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## dogleg (Feb 5, 2010)

Evidently this is too complex an issue to be addressed on a forum like this. There are just too many variables . Anyway thanks for the ideas that were offered.


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## larry81 (Nov 22, 2010)

Dogleg have you considered the three fund portfolio ?

- VCE
- VXC
- VAB

Add a sprinkle of REIT (VRE, ZRE) of you need more income

Even my uninterested wife should be able to manage this kind of portfolio 

IMHO a"Super downsized" portfolio should contain max 5 ETF's


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## dogleg (Feb 5, 2010)

Larry: Thanks for the info. Your ideas make sense to me. Do you use these same funds in your TFSA and RRSP or RIF?


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