What is a Model Portfolio?
Model ETF portfolios typically set target allocations for different asset classes. The financial product landscape is undergoing a significant transformation, primarily driven by the growing adoption of model portfolios among financial advisors. Achieving success in self-directed investing can be distilled into a straightforward formula: diversify widely, minimize expenses, and steadfastly follow a long-term strategy. By holding just a few to a handful of ETFs, you can construct a sophisticated portfolio with exceptionally low fees and minimal upkeep.
The formula for successful do-it-yourself investing is simple: diversify broadly, keep your costs low, and stick to your plan over the long term. Asset allocation ETFs tick all of these boxes. With just one or two holdings, you can build a sophisticated portfolio with extremely low fees and minimal maintenance. These all-in-one ETF portfolios are the best solution for the vast majority of DIY investors. Imagine a model portfolio as a recipe. Combine a portion of stocks, bonds, cash and perhaps alternative investments, and you have a customized asset portfolio tailored to specific financial objectives. Another apt metaphor for understanding model portfolios is an investment blueprint.
BMO Model ETF Portfolios
The Bank of Montreal (BMO) is a Canadian multinational investment bank and financial services company. This financial institution uses a simple index strategy that can be built using Canadian bonds, Canadian equities and global equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | ETF | Ticker | MER |
|---|---|---|---|---|---|
| BMO SelectTrust Conservative Portfolio | BMO473 | 2.29% | BMO Conservative ETF | ZCON | 0.20% |
| BMO SelectTrust Balanced Portfolio | BMO474 | 2.40% | BMO Balanced ETF | ZBAL | 0.20% |
| BMO SelectTrust Growth Portfolio | BMO484 | 2.50% | BMO Growth ETF | ZGRO | 0.20% |
| BMO SelectTrust Equity Growth Portfolio | BMO485 | 2.61% | BMO All-Equity ETF | ZEQT | 0.20% |
Warren Buffet ETF Porfolio
The Warren Buffett Portfolio can be implemented with 2 ETFs. This portfolio has a very high risk, meaning it can experience significant fluctuations in value. It is suitable for investors with a high-risk tolerance who are seeking substantial returns and can withstand large drawdowns. The asset allocation is the following: 90% on the Stock Market and 10% on Fixed Income. In general, bonds are useful for mitigating overall portfolio risk, especially if they are issued by national entities or highly reliable companies. This portfolio has a 10% allocation to bonds, leading to its classification as very high risk.
Canadian Couch Potato Model ETF Portfolios
Canadian Couch Potato is a basic guide to index investing. The formula for successful do-it-yourself investing is simple: diversify broadly, keep your costs low, and stick to your plan over the long term. Asset allocation ETFs tick all of these boxes. If your chosen asset mix is 100%, 80%, 60%, 40% or 20% stocks, then you can build your portfolio with a single asset allocation ETF. With this one-fund solution, you’ll never need to rebalance your portfolio. Here is a list of model portfolios for various risk tolerances to help you build an ETF portfolio.
| Risk Tolerance | Stocks | Bonds | BlackRock | BMO | Vanguard |
|---|---|---|---|---|---|
| Income | 20% | 80% | XINC | N/A | VCIP |
| Conservative | 40% | 60% | XCNS | ZCON | VCNS |
| Balanced | 60% | 40% | XBAL | ZBAL | VBAL |
| Growth | 80% | 20% | XGRO | ZGRO | VGRO |
| All-Equity | 100% | 0% | XEQT | ZEQT | VEQT |
Canadian Portfolio Manager Model ETF Portfolios
The Canadian Portfolio Manager blog helps new and seasoned DIY investors implement and manage their own ETF portfolio. Here is a list of model portfolios for various risk tolerances to help you build an ETF portfolio.
| Risk Tolerance | Stocks | Bonds | BlackRock | BMO | Mackenzie | Vanguard |
|---|---|---|---|---|---|---|
| Income | 20% | 80% | XINC | N/A | N/A | VCIP |
| Conservative | 40% | 60% | XCNS | ZCON | MCON | VCNS |
| Balanced | 60% | 40% | XBAL | ZBAL | MBAL | VBAL |
| Growth | 80% | 20% | XGRO | ZGRO | MGRW | VGRO |
| All-Equity | 100% | 0% | XEQT | ZEQT | N/A | VEQT |
CIBC Model ETF Portfolios
Canadian Imperial Bank of Commerce is a Canadian multinational banking and financial services corporation headquartered at CIBC Square in the Financial District of Toronto, Ontario. This financial institution uses a simple index strategy that can be built using Canadian bonds and global equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | XWD |
|---|---|---|---|---|
| CIBC Smart Income Solution | CIB210 | 1.62% | 75% | 25% |
| CIBC Smart Balanced Income Solution | CIB220 | 1.67% | 60% | 40% |
| CIBC Smart Balanced Solution | CIB230 | 1.77% | 40% | 60% |
| CIBC Smart Balanced Growth Solution | CIB240 | 1.82% | 25% | 75% |
| CIBC Smart Growth Solution | CIB250 | 1.93% | 10% | 90% |
Ray Dalio All Weather Portfolio
The Ray Dalio All Weather Portfolio can be implemented with 5 ETFs. It is suitable for investors with a balanced approach to risk and return, seeking steady growth while tolerating some level of volatility. The asset allocation is 30% on the Stock Market, 55% on Fixed Income, and 15% on Commodities.
| ETF | Name | Weight |
|---|---|---|
| VTI | Vanguard Total Stock Market Index Fund ETF | 30% |
| TLT | iShares 20+ Year Treasury Bond ETF | 40% |
| IEI | iShares 3-7 Year Treasury Bond ETF | 15% |
| GLD | SPDR Gold Shares | 7.5% |
| PDBC | Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF | 7.5% |
Golden Butterfly Portfolio
The golden butterfly portfolio asset allocation is the following: 40% on the Stock Market, 40% on Fixed Income, 20% on Commodities. In general, bonds are useful for mitigating overall portfolio risk, especially if they are issued by national entities or highly reliable companies. This portfolio has a 40% allocation to bonds, leading to its classification as high risk.
| ETF | Name | Weight |
|---|---|---|
| VTI | Vanguard Total Stock Market Index Fund ETF | 20% |
| AVUV | Avantis US Small Cap Value ETF | 20% |
| TLT | iShares 20+ Year Treasury Bond ETF | 20% |
| SHY | iShares 1-3 Year Treasury Bond ETF | 20% |
| GLD | SPDR Gold Shares | 20% |
Good Investing Model ETF Portfolios
Sustainable investing aims to make intentional decisions about where they’re investing their money. Here is a list of Good Investing model portfolios for various risk tolerances to help you build an ETF portfolio.
| Strategy | AGSG | CESG.B | DRCU | DRFG | ETHI | GBAL | HGGB | QCLN | ZCLN | ZESG | ZGB | N/A |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| The Organic Couch Potato Pie | 15% | 0% | 0% | 0% | 0% | 75% | 0% | 0% | 0% | 0% | 0% | 10% |
| De La Crème Pie | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 15% | 75% | 0% | 10% |
| Round the World Pie | 0% | 0% | 30% | 45% | 0% | 0% | 0% | 15% | 0% | 0% | 0% | 0% |
| Crunchy Granola Pie | 0% | 20% | 0% | 0% | 40% | 0% | 0% | 0% | 0% | 0% | 30% | 10% |
Libro Model ETF Portfolios
Libro Credit Union, Libro, or Libro Credit Union Limited, is a credit union based in London, Ontario, Canada. Libro is owned by its customers, who direct the institution’s decisions. Libro offers many financial services, including chequing and savings accounts, loans, mortgages, investments, financial coaching and advice for consumers and farm and business owners. This financial institution uses a simple index strategy that can be built using Canadian bonds, Canadian equities and global equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | ZLB | XWD |
|---|---|---|---|---|---|
| NEI Select Income RS Portfolio | NWT024 | 1.80% | 75% | 7% | 18% |
| NEI Select Income & Growth RS Portfolio | NWT014 | 2.03% | 60% | 12% | 28% |
| NEI Select Balanced RS Portfolio | NWT019 | 2.44% | 40% | 15% | 45% |
| NEI Select Growth & Income RS Portfolio | NWT008 | 2.36% | 30% | 15% | 55% |
| NEI Select Growth RS Portfolio | NWT020 | 2.54% | 15% | 17% | 68% |
| NEI Select Maximum Growth RS Portfolio | NWT90012 | 2.45% | 0% | 20% | 80% |
National Bank Model ETF Portfolios
The National Bank of Canada is the sixth largest commercial bank in Canada. It is headquartered in Montreal, and has branches in most Canadian provinces and 2.4 million personal clients. National Bank is the largest bank in Quebec, and the second largest financial institution in the province, after Desjardins credit union. This financial institution uses a simple index strategy that can be built using Canadian bonds, Canadian equities, American equities, European equities and emerging markets equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | ZLB | HXX | CWO | XUS |
|---|---|---|---|---|---|---|---|
| NBI Secure Portfolio | NBC921 | 1.88% | 80% | 7% | 4% | 2% | 7% |
| NBI Conservative Portfolio | NBC922 | 1.93% | 70% | 10.5% | 6% | 3% | 10.5% |
| NBI Moderate Portfolio | NBC923 | 2.05% | 55% | 15.75% | 9% | 4.5% | 15.75% |
| NBI Balanced Portfolio | NBC924 | 2.23% | 40% | 21% | 12% | 6% | 21% |
| NBI Growth Portfolio | NBC925 | 2.41% | 20% | 28% | 16% | 8% | 28% |
| NBI Equity Portfolio | NBC926 | 2.51% | 0% | 35% | 20% | 10% | 35% |
PWL Capital Model ETF Portfolios (Dimensional)
PWL Capital offers wealth management services, simplifying wealth for Canadians. Helping you frame financial decisions through the lens of living a good life. PWL offers a personalized approach to wealth management that lets their clients define their financial and family goals based on their lifestyles. They integrate financial planning and investment management so our advisors can develop targeted strategies and provide each customer with a unique experience. Their teams specialize in serving high net worth (HNW) clients, with the expertise and experience to oversee every aspect of your financial life. Here is a list of model portfolios for various risk tolerances to help you build an ETF portfolio.
Rational Reminder Model ETF Portfolios (Ben Felix)
Ben Felix is a portfolio manager at PWL Capital in Canada. He is perhaps better known for his YouTube channel and Rational Reminder podcast alongside Cameron Passmore. Felix is a proponent of research-based advice looking at the evidence and data to inform and optimize investing decisions. Here is a list of model portfolios for various risk tolerances to help you build an ETF portfolio.
| Risk Tolerance | ZAG | XIC | VUN | AVUV | XEF | AVDV | XEC |
|---|---|---|---|---|---|---|---|
| 40/60 | 60.0% | 12.0% | 12.0% | 4.0% | 6.4% | 2.4% | 3.2% |
| 50/50 | 50.0% | 15.0% | 15.0% | 5.0% | 8.0% | 3.0% | 4.0% |
| 60/40 | 40.0% | 18.0% | 18.0% | 6.0% | 9.6% | 3.6% | 4.8% |
| 70/30 | 30.0% | 21.0% | 21.0% | 7.0% | 11.2% | 4.2% | 5.6% |
| 80/20 | 20.0% | 24.0% | 24.0% | 8.0% | 12.8% | 4.8% | 6.4% |
| 100/0 | 0.0% | 30.0% | 30.0% | 10.0% | 16.0% | 6.0 | 8.0% |
RBC Model ETF Portfolios
Royal Bank of Canada is a Canadian multinational financial services company and the largest bank in Canada by market capitalization. The bank serves over 17 million clients and has more than 89,000 employees worldwide. Founded in 1864 in Halifax, Nova Scotia, it maintains its corporate headquarters in Toronto and its head office in Montreal. This financial institution uses a simple index strategy that can be built using a diversified mix of cash, bonds and equities equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | ZLB | XUS | HXX | PSA | CJP | ZID | CWO |
|---|---|---|---|---|---|---|---|---|---|---|
| RBC Select Very Conservative Portfolio | RBF209 | 1.69% | 73% | 10% | 8% | 3.5% | 2% | 1.9% | 1.6% | 0% |
| RBC Select Conservative Portfolio | RBF461 | 1.84% | 58% | 13% | 15% | 6% | 2% | 3.25% | 2.75% | 0% |
| RBC Select Balanced Portfolio | RBF460 | 1.94% | 38% | 15% | 25% | 7.5% | 2% | 4% | 3.5% | 5% |
| RBC Select Growth Portfolio | RBF459 | 2.04% | 23% | 18% | 30% | 9.5% | 2% | 5.1% | 4.4% | 8% |
| RBC Select Aggressive Growth Portfolio | RBF592 | 2.14% | 0% | 29% | 38% | 10% | 2% | 5.4% | 4.6% | 11% |
Scotiabank Model ETF Portfolios
This financial institution uses a simple index strategy that can be built using Canadian bonds, Canadian equities and global equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | ZLB | XWD |
|---|---|---|---|---|---|
| Scotia Selected Income Portfolio | BNS338 | 1.72% | 75% | 10% | 15% |
| Scotia Selected Balanced Income Portfolio | BNS340 | 1.83% | 65% | 15% | 20% |
| Scotia Selected Balanced Growth Portfolio | BNS341 | 1.94% | 45% | 22% | 33% |
| Scotia Selected Growth Portfolio | BNS342 | 2.04% | 25% | 30% | 45% |
| Scotia Selected Maximum Growth Portfolio | BNS344 | 2.16% | 10% | 27% | 63% |
TD Model ETF Portfolios
This financial institution uses a simple index strategy that can be built using Canadian bonds, Canadian equities and global equities. Here is a list of portfolios for various risk tolerances to replace your current mutual fund with a comparable ETF portfolio.
| Mutual Fund | Fund Code | MER | VAB | ZLB | XWD |
|---|---|---|---|---|---|
| TD Comfort Conservative Income Portfolio | TDB2440 | 1.53% | 80% | 5% | 15% |
| TD Comfort Balanced Income Portfolio | TDB885 | 1.75% | 70% | 8% | 22% |
| TD Comfort Balanced Portfolio | TDB886 | 1.91% | 55% | 13% | 32% |
| TD Comfort Balanced Growth Portfolio | TDB887 | 2.02% | 40% | 16.5% | 43.5% |
| TD Comfort Growth Portfolio | TDB888 | 2.13% | 20% | 22.5% | 57.5% |
| TD Comfort Aggressive Growth Portfolio | TDB889 | 2.23% | 0% | 30% | 70% |
How Do Model Portfolios Work?
In each distinct model portfolio, expert managers outline a precise asset allocation and routinely readjust it to maintain the portfolio’s intended structure. Model portfolios often employ widely recognized market indices, such as the S&P 500, as performance benchmarks. They aim to strike a balance between returns and risk by holding a collection of securities. Although model portfolio managers may set specific return targets for their portfolios, achieving or surpassing these objectives is not guaranteed. Many model portfolios, especially over the short or medium term, may fall short of their intended returns.
Model Portfolios and Asset Allocation
Model portfolios hinge on two fundamental investment principles: diversification and asset allocation. These principles work in tandem to mitigate investment risks. Diversification involves incorporating a variety of investments into a single portfolio, spanning different asset classes and even within those classes.
Model ETF portfolios typically set target allocations for different asset classes. Asset allocation pertains to the proportion of the portfolio allocated to each asset type. For instance, a common example is the 70/30 portfolio, where 70% comprises stocks and 30% bonds. Portfolio managers strive to maintain consistent asset allocations over time by regularly rebalancing the portfolio. They sell assets that have performed well and buy assets that have underperformed to realign the portfolio with its intended allocation. This ensures that the portfolio remains in line with its designated blueprint.
Conclusion
Model portfolios can be great options for beginner investors looking for an ETF compatible to their current product. But before you invest your hard-earned money into a model portfolio, it’s important to understand how the portfolio works. You will also want to compare fees. The more knowledgeable you are, the better investment decisions you will make.
