# Thinking of selling all my XIU, and buying XTR instead.



## dcaron (Jul 23, 2009)

*Thinking of simplifying my portfolio...*

I bought into XTR a while ago, and embarassed to say that I did not noticed until now that it is multi-asset. I initially thought it was a Canadian dividend ETF. 

So I was thinking on rationalizing my list of ETF's listed.

Perhaps even switching Canadian Equities, Emerging Markets, and European Equities to VXUS.

Also like the idea of reducing number of ETF's in my portfolio to keep yearly re-balancing costs low. Im tempte to move to a discount broker which offers free DRIP's for Canadian iShare's too. Investments are in RSP + LIRA. Horizon is 15 years. Im a "buy and hold" type.

In summary, my current allocation is the following:
28.5% XSB (Short Term Fixed Income)
14.8% XTR (Multi-Asset Class)
14.8% XIU (Can Equities)
7.7% VEA (Europe Pacific Mkt Equities)
7.7% VWO (Emerging Mkt Equities)
27% VTI (US Equities)

looking at this Portfolio allocation scenario:
30% XSB (Short Term Fixed Income)
30% VXUS (World Equitiess, except US)
40% VTI (US Equities)

What do you guys think about above or other allocation that makes sense?


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## fatcat (Nov 11, 2009)

i can't find XTI anywhere, who offers this fund ?

i don't see the logic of buying an all-in-one-fund like XTR and holding other funds, the purpose of these funds is generally to own a single do-it-all-fund as far as i see ....

why not create your own all in one fund if that's what you want ?

the mix seems confusing and unfocussed to me


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## dcaron (Jul 23, 2009)

Thanks for your reply. Apologies for typo - I meant VTI not XTI.

I bought into XTR a while ago, and embarassed to say that I did not noticed until now that it is multi-asset. I initially thought it was a Canadian dividend ETF. 

So either I cut down on my list of ETF's listed in my 1st post, and converge into XTR, with its higher MER.
OR
I move from XTR to a pure dividend ETF such as XDV, CDZ, etc.


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## Sampson (Apr 3, 2009)

be careful with XTR, the fund managerd can and will change allocations at will. For example, they just recently doubled the amount of junk bonds in the mixture. I wouldn't invest in it for this reason.


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## fatcat (Nov 11, 2009)

if you want to abide by the general rules of simple low cost couch potato investing ..
i would do this: 
canada equities VCE
usa equities VTI
developed equities either VEA or VEF if you want the canadian dollar hedged version
emerging markets VWO

those four give you the whole world pretty much at very, very low cost
i would add investment grade bonds, high yield bonds and real estate to that mix

this gives a much less expensive portfolio than anything to do with XTR which i would not buy

ps. i would be tempted to divide the equities into 4 equal parts
pps. i would also add that i have no idea what i'm doing half of the time, i keep changing my mind, there just is no one answer, which i guess is why the couch potato philosophy is so good, it's simple and low cost and very easy


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## leoc2 (Dec 28, 2010)

I am not a fan of income funds like XTR. High MER and no asset allocation control. Create your own fund. Guessing you want 60/40 asset allocation and you are concerned about interest rate hikes ... how about:
20% VCE
20% VTI
20% VXUS
20% (HISA or XSB) - Short duration 
10% VAB - Intermediate duration
10% XRB or ZRR - Long duration with inflation hedge.


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## dcaron (Jul 23, 2009)

Thanks for all your input so far.

Just found this article which confirms all the negative advice against XTR - a Fund of funds, with fluctuating allocation ...
I was first attracted to XTR by its decent dividend payout.

http://www.moneysense.ca/2012/03/26/did-your-etf-just-get-riskier/


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## orange (Oct 23, 2011)

I guess this doesn't achieve the goal of reducing the number of funds, but have you thought of splitting your Canadian Equities component by keeping your XIU and adding something like XMD? This will give you more exposure to the smaller caps in the index which might boost your overall return.


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## Belguy (May 24, 2010)

If I were breaking down my Canadian equity component, I would allocate between XIU and XCS and rebalance periodically rather than use XMD but that's just me. Or, what about using XCV and XCS???


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## fatcat (Nov 11, 2009)

orange said:


> I guess this doesn't achieve the goal of reducing the number of funds, but have you thought of splitting your Canadian Equities component by keeping your XIU and adding something like XMD? This will give you more exposure to the smaller caps in the index which might boost your overall return.


 then i would just get XIC ... it is interesting how all, these slice and dice etf's keep tempting us to diversity and create the perfect portfolio ... if i'm going to do that i might as just buy individual equities ... it is very hard to just buy a few broad basic funds and leave them alone isn't it ? ... i am constantly rethinking but i am at least going to force myself to always stay the course for a full year and then make changes at year end ...


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## dcaron (Jul 23, 2009)

Ive edited my original thread for more clarity.
Any additional thoughts are welcomed.
Thanks.


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## larry81 (Nov 22, 2010)

XIC or VCE
VTI
XVUS
XBB or XSB

is all you need


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## dcaron (Jul 23, 2009)

Thanks. Why XIC, VCE, or XIU, or any Canadian Equities, if VXUS covers everything except US?
Wouldn't that lead to over exposure in Can Equities?


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## mrPPincer (Nov 21, 2011)

regarding VXUS, I was recently going to make that a part of my portfolio, and had even had a bid on it for a couple of days, but thankfully I had enough time to think about it and decided that having the 9% CDN equity holdings' dividends taxed on the way out, and again (when outside RSP) on the way back into Canada, that that was just too much for me to sleep well with, even though otherwise this etf looks great with it's small cap exposure and low MER etc.

I decided instead to get my emerging mkts exposure via VWO (in my RSP), and am keeping the rest of the non-US foreign exposure in TD e-funds, which, being based here only get hit with foreign withholding tax once.

Just something to consider.


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## CanadianCapitalist (Mar 31, 2009)

dcaron said:


> Thanks. Why XIC, VCE, or XIU, or any Canadian Equities, if VXUS covers everything except US?
> Wouldn't that lead to over exposure in Can Equities?


Yes it would. But there are legitimate reasons to overweight home markets. For Canadian stocks, you get favourable tax treatment of dividends, avoiding US estate tax issues, currency conversion considerations etc.

Holding VXUS or VT to capture foreign stock exposure is not a good idea for all investors. Some would want to split it up and hold higher yielding ETFs in registered accounts and lower yielding ETFs in taxable accounts. Eg. VTI dividend yield is much lower than that of VEA. Also rebalancing between VTI, VEA, VWO with fixed percentages allows you to take advantage of differences in returns between them.


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## dcaron (Jul 23, 2009)

MRP & CC - I hold all of these in my RSP, and my horizon is ~15 years. Why should I worry about tax treatment? Any pointers on US estate issues and how this could impact my inheritance?

Edit: Found this ... http://www.theglobeandmail.com/glob...ing-tax-on-us-dividend-stocks/article1580827/

_"When U.S. dividend stocks are held inside a registered retirement savings plan or registered retirement income fund, on the other hand, there is no withholding tax on U.S. dividends. So the entire amount will land in your account (adjusted for currency). That’s why many investors prefer to hold U.S. dividend stocks inside an RRSP or RRIF.

Things are a bit more complicated if you hold U.S. dividend stocks in a non-registered account. You’ll pay the 15-per-cent U.S. withholding tax off the top. And because U.S. dividends don’t qualify for the Canadian dividend tax credit, you’ll pay tax at your marginal rate on the full amount of the dividend.

But the 15-per-cent withholding tax would qualify for a foreign tax credit on your Canadian return. So, for most investors, the net result is that U.S. dividends held in a non-registered account will be taxed at the same rate as interest income."_


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## mrPPincer (Nov 21, 2011)

When I looked into US estate taxes I found at the time that it only applied to amounts a million and over I believe, so it definitely did not apply to me.

Also, each person's situaion is different, I have most of my investments outside my RSP and am limited in space, thus the reason for keeping all my canadian holdings outside.


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