In Episode 10 of the Canadian Portfolio Manager Podcast, Justin analyzes the historical returns of gold from 1972 to 2019 to help Canadian investors decide whether the shiny yellow metal deserves a place in their portfolio. Using the data, Justin sets out to determine if any of the hype is warranted – has gold historically been a decent safe haven, portfolio diversifier, return enhancer and/or inflation hedge for Canadian investors? At the end of the show, we pit two gold ETFs (IAU and GLD) against one another in our ETF Kombat. And for all you visual learners out there, the gold discussion and ETF Kombat are also available on the CPM YouTube channel here and here.

• Ask Bender: Kevin from Edmonton asks whether he should include a 5% strategic allocation to gold in his portfolio [0:00:46.10]
• John Bogle discusses why gold is a speculation, not an investment [0:01:19.10]
• Was gold a safe haven for investors during the financial crisis and the global pandemic? [0:04:54.10]
• Correlations between gold and stocks/bonds between 1972 and 2019 [0:07:29.10]
• Why Kevin O’Leary likes gold [0:08:13.10]
• Has gold historically reduced the risk of a balanced portfolio? [0:09:02.10]
• Why Ray Dalio believes investors should hold 5-10% of their assets in gold [0:10:38.10]
• Has gold historically been a return enhancer (i.e. provided higher risk-adjusted returns for investors)? [0:11:55.10]
• Has gold historically been positively correlated with Canadian inflation? [0:13:24.10] 
• Asset class performance between 1972 to 1979 (when Canadian inflation averaged 8.7%) [0:14:22.10]
• Would a balanced portfolio have kept up with inflation between 1972 and 1979? [0:15:19.10]
• Gold as an inflation hedge between 1980 and 2019 [0:16:18.10]
• Insights Canadian investors can take away from this analysis [0:17:19.10]
• If you decide to add a bit of gold to your portfolio, Kevin O’Leary has some practical advice for you [0:19:13.10]
• ETF Kombat: IAU vs. GLD (gold ETFs) [0:20:52.10]

In Episode 9 of the Canadian Portfolio Manager Podcast, we discuss whether currency-hedged ETFs make sense for Canadian investors. Steven Leong, of BlackRock Canada, joins us once again to share his insights on the purpose of currency-hedging, as well as the firm’s currency-hedging process.  We then break for an ETF Kombat between XSP (the granddaddy of currency-hedged ETFs), and its younger rival, XUH. We’ll then take a deep dive into the historical risk and return data to help you decide whether currency-hedged ETFs deserve a place in your portfolio. At the end of the show, we’ll discuss the Big Mac Index, which is sure to leave you hungry for more information.

• Recap of Episode 8, Making Cents of Your ETF’s Loonie Currency Exposure [0:00:26.9]
• The purpose of currency-hedging and how the currency-hedging process works [0:03:37.9]
• Why currency-hedging doesn’t perfectly eliminate all foreign currency exposure [0:05:14.9]
• Introducing our recommended currency-hedged iShares and Vanguard foreign equity ETFs (XUH, XFH, VUS, VI) [0:07:04.9]
• ETF Kombat: XSP vs. XUH [0:09:16.9]
• The largest foreign currency exposures in your asset allocation ETF [0:13:08.9]
• “Safe-haven” currencies to the rescue: the U.S. dollar and the Japanese yen [0:14:06.9]
• Has currency-hedging historically reduced or increased a Canadian investor’s risk? [0:16:41.9]
• Why your portfolio’s asset allocation has an impact on the currency-hedging decision [0:18:51.9]
• Performance of currency-hedged vs. unhedged ETFs during the Global Financial Crisis [0:20:52.9]
• Performance of currency-hedged vs. unhedged ETFs during the Global Pandemic [0:22:10.9]
• The historical impact of currency-hedging on a Canadian investor’s global stock market returns [0:23:55.9]
• “Considerable currency fluctuations” over more than a century [0:25:20.9]
• The “hedge-of-least-regret” currency-hedging strategy [0:26:08.9]
• Making exchange-rate theory more digestible with the Big Mac Index [0:28:38.9]

In Episode 8 of the Canadian Portfolio Manager Podcast, Justin starts off by answering a listener question regarding the currency exposure of two U.S. equity ETFs in the CPM model portfolios. Steven Leong, of BlackRock Canada, also drops in to provide his currency insights throughout the episode. We then embark upon a most excellent currency adventure with Bill and Ted - two pals who are trying to wrap their heads around the confusing world of currencies. The currency exposure of international, emerging markets, and the iShares “dot U” equity ETFs are also examined. Finally, we end the show with an ETF Kombat between XUU.U and ITOT (two U.S. equity ETFs that both transact in U.S. dollars).

• Why our brains as humans are not fully wired to handle foreign currency calculations [0:00:31.8].
• Ask Bender: Marc from Ottawa kicks things off by asking what the currency exposure is when investing in XUU and ITOT [0:02:24.8]
• Understanding the currency exposure of your U.S. equity ETF [0:04:02.8]
• The key currency takeaway from episode 8 [0:05:20.8]
• A quick tip on how to wrap your head around currency quotes [0:06:22.8]
• How to account for currency fluctuations when calculating your stock market returns [0:08:54.8]
• Why a positive 10% stock market gain and a negative 10% currency loss do not net out to 0% [0:11:10.8]
• Bill & Ted’s Excellent Currency Adventure [0:12:52.8]
• Understanding the currency exposure of your international equity ETF [0:15:52.8]
• Understanding the currency exposure of your emerging markets equity ETF [0:21:20.8]
• Introducing the iShares “dot U” equity ETFs [0:22:48.8]
• Understanding the currency exposure of your iShares “dot U” ETFs [0:23:29.8]
• Why you can’t use the iShares “dot U” equity ETFs to perform the Norbert’s gambit strategy [0:25:49.8]
• ETF Kombat: U vs. ITOT (featuring PWL’s own Martin Dallaire as the voice of the judge [0:29:24.8]

Blog posts/resources discussed in this episode:

CPM Episode 8: Making Cents of Your ETF’s Loonie Currency Exposure (PODCAST SCRIPT)

In Episode 7 of the Canadian Portfolio Manager podcast, Justin takes investors on an epic journey through the new “Plaid” model ETF portfolios. During the show, investors will learn the asset location strategies necessary to manage their very own Plaid portfolio. Michael James (creator of the popular personal finance blog, Michael James on Money) will also drop by to share his personal experiences managing a Plaid-like portfolio. As always, there will be an exciting ETF Kombat – this time, between XEF and IEFA, who will battle it out in your TFSA, RRSP and taxable accounts. After the match, we’ll take you through the advantages and disadvantages of going Plaid. And to end the show, Justin will answer an asset location question from David, who is currently managing a 100% equity portfolio. 

• I don’t get it (in search of the true meaning behind the “Plaid” reference in Spaceballs) [0:00:46.7]
• The basic asset location concepts behind the Plaid portfolios [0:02:33.7]
• Setting up a Plaid portfolio (in just 10 “simple” steps) [0:03:44.7]
• Light vs. Ridiculous vs. Ludicrous vs. Plaid:  After-tax performance comparison [0:11:10.7]
• Michael James on Money discusses managing his Plaid-like portfolio [0:12:57.7]
• ETF Kombat:  XEF vs. IEFA (featuring PWL’s own Martin Dallaire as the voice of the judge [0:15:29.7]

• Advantages and disadvantages of managing a Plaid portfolio [0:22:08.7]

• Ask Bender:  Asset location strategies for a 100% equity portfolio [0:25:39.7]

Blog posts/resources discussed in this episode:

CPM Episode 7: Asset Location Strategies with the “Plaid” Model ETF Portfolios 

Canadian Portfolio Manager: Introducing the “Plaid” ETF Portfolios

Canadian Portfolio Manager: Model ETF Portfolios

If you’re wondering whether you’re holding your ETFs in the right accounts, this episode of the CPM Podcast is for you. During the show, investors will learn how to properly implement a traditional asset location strategy with the new Ludicrous Model ETF Portfolios. Justin will also reveal why a Ludicrous portfolio can be a superior choice to simply holding the same asset allocation ETF across each account. We’ll then break up the discussion with an ETF Kombat between two popular U.S. equity funds: XUU and VUN. After the match, we’ll compare the advantages and disadvantages of a Ludicrous portfolio. At the end of the episode, Justin will answer a common listener question: “Does all this technical tax stuff really matter for most investors?”

• The steps involved in setting up a Ludicrous portfolio [0:02:46.6]
• Does this asset location strategy actually work? [0:05:10.6]
• What’s really causing the Ludicrous portfolio’s huge performance advantage? [0:09:18.6]
• Comparing apples-to-apples (or after-tax asset allocations to after-tax asset allocations) [0:11:08.6]
• ETF Kombat: XUU vs. VUN [0:12:28.6]
• Great reasons to consider a Ludicrous portfolio [0:17:56.6]
• Potential disadvantages to managing a Ludicrous portfolio [0:20:49.6]
• Ask Bender: “Does all this technical portfolio tax stuff really matter for most investors?” [0:23:22.6]

Blog posts/resources discussed in this episode:

Canadian Portfolio Manager: Introducing the “Ludicrous” ETF Portfolios

Canadian Portfolio Manager: Model ETF Portfolios

In Episode 5 of the CPM Podcast, Justin continues to fine-tune his portfolios. He shows investors how they can cut the cost of their Vanguard or iShares asset allocation ETF by switching to one of his “Ridiculous” model portfolios. During the discussion, investors will discover the many benefits of using U.S.-based foreign equity ETFs in their RRSP, and also learn how tax-efficient bond ETFs can help to reduce their tax bill in taxable accounts. And in this episode’s ETF Kombat, the BMO Discount Bond Index ETF (ZDB) will take on not one, but three of its rivals: VAB, XBB and ZAG. Justin will end the show by answering a popular listener question on whether they should switch their old CPM portfolio to one of the newer ETF portfolios introduced in 2020.

• How to read the Vanguard and iShares Ridiculous model ETF portfolio reports [0:01:25.5]
• Comparing the Light and Ridiculous model ETF portfolio reports [0:02:56.5]
• Foreign bond differences between the Light and Ridiculous ETF portfolios [0:03:34.5]
• Equity differences between the Light and Ridiculous ETF portfolios [0:04:52.5]
• Making your ridiculously complex investing experience slightly easier, using VEQT and XEQT [0:07:24.5]
• ETF Kombat: ZDB takes on not one, but three bond ETFs (VAB, XBB and ZAG) [0:08:16.5]
• The pros and cons of managing a Ridiculous ETF portfolio [0:14:24.5]
• Voicemail Question: A blog reader asks Justin whether he needs to switch his old CPM portfolio to one of the newer model ETF portfolios introduced in 2020 [0:18:11.5]

Blog posts/resources discussed in this episode:

• Canadian Portfolio Manager: Introducing the “Ridiculous” ETF Portfolios
• What Should You Do When We Update Our CPM Portfolios?
• Canadian Portfolio Manager Model ETF Portfolios

Justin has recently updated his Canadian Portfolio Manager (CPM) model ETF portfolios. There are now four CPM portfolio levels of complexity to choose from: Light, Ridiculous, Ludicrous or Plaid. Each of the models’ four levels is more difficult to manage than the last … and arguably, more powerful.

In this four-part podcast series, Justin will discuss each of his four model ETF portfolio levels in painstaking detail, starting with the Light portfolios. We’ll also lighten up the discussion with an ETF Kombat between two bond ETFs: VAB and VGAB. And after reviewing the advantages and disadvantages of the Light portfolios, we’ll answer a voicemail question from Emily in Vancouver, who would like to know how to tax efficiently reduce the risk of VGRO in a taxable account as she approaches retirement.

• How to read the Vanguard and iShares Light model ETF portfolio reports [0:02:25.4]
• Combining two asset allocation ETFs for a custom asset mix [0:03:07.4]
• Introducing Justin’s foreign withholding tax ratio (or FWTR for short) [0:03:50.4]
• 25 years of semi-fictional model ETF performance [0:04:17.4]
• The worst 1-year portfolio returns over the past 25 years, and why you should pay close attention to these before investing [0:04:42.4]
• The pros and cons of keeping your portfolio simple [0:05:04.4]
• ETF Kombat: VAB vs. VGAB [0:08:55.4]
• Equity home bias differences between the Vanguard and iShares asset allocation ETFs [0:14:00.4]
• Foreign equity weighting differences between the Vanguard and iShares asset allocation ETFs [0:016:12.4]
• Fixed income home bias differences between the Vanguard and iShares asset allocation ETFs [0:18:00.4]
• Duration differences between the Vanguard and iShares asset allocation ETFs [0:19:05.4]
• How these equity and fixed income differences would have impacted the historical risk and return of a balanced portfolio over the past 20 years [0:19:29.4]
• Fee differences between the Vanguard and iShares asset allocation ETFs [0:20:11.4]
• A look at the iShares and Vanguard rebalancing strategies for their asset allocation ETFs [0:20:42.4]
• What is a pre-authorized cash contribution (PACC), and how do investors set one up for XBAL or XGRO? [0:22:39.4]
• Voicemail Question: Emily from Vancouver asks Justin how she can reduce the risk of VGRO in a taxable account as she approaches retirement (without realizing big capital gains) [0:24:56.4]

Blog posts/resources discussed in this episode:

• Canadian Portfolio Manager: Introducing the “Light” ETF Portfolios
• Canadian Portfolio Manager Model ETF Portfolios

In this tax-heavy episode, Justin discusses his part-time obsession – foreign withholding taxes. Throughout the show, he explains which specific ETFs are best held in each account type in order to reduce this largely hidden tax drag. He is joined by industry experts from BMO, BlackRock and Vanguard, who each discuss their company’s approach to mitigating this cost. ZEM and XEC also go head-to-head in the latest ETF Kombat. As a side-bar, Justin’s popular model ETF portfolios have been updated for 2020, and now include Light and Ridiculous levels of portfolio complexity (with Ludicrous and Plaid versions in the works). Justin finishes off the show by answering a listener question regarding the new iShares foreign equity ETFs that trade in U.S. dollars.

• Three ETF structures for accessing U.S., international and emerging stock markets [0:02:03.3]
• How Level I and Level II withholding taxes arise [0:02:28.3]
• How the type of account holding your ETF impacts foreign withholding taxes [0:03:44.3]
• The most tax-efficient U.S. equity ETFs for each account type [0:05:41.3]
• Why investors with smaller portfolios should generally avoid U.S.-listed ETFs in their RRSP (even when using the Norbert’s gambit strategy to cheaply convert their loonies to dollars) [0:06:43.3]
• When can purchasing U.S.-listed ETFs in TFSAs and taxable accounts still make sense? [0:09:03.3]
• Kevin Prins of BMO ETFs discusses some of their tax-efficient international and emerging markets equity ETFs [0:11:31.3]
• The worst fund structure for international equity ETFs [0:14:28.3]
• The most tax-efficient international equity ETFs for each account type [0:15:27.3]
• Steven Leong of BlackRock Canada discusses XEF’s transition from a U.S. wrap structure to one that holds the stocks directly, and why the U.S. wrap structure can still be a more cost-effective choice for some other asset classes [0:18.40.3]
• The most tax-efficient emerging markets equity ETFs for each account type [0:24:11.3]
• Why ZEM’s tax-efficient structure may still not beat XEC’s after all costs are considered [0:26:03.3]
• ETF Kombat: ZEM vs. XEC [0:27:51.3]
• The most tax-efficient global equity ETFs for each account type [0:31:23.3]
• Scott Johnston of Vanguard Canada discusses the recent tax-efficient changes to VXC’s fund structure [0:32:28.3]
• The overall cost of currency-hedged global fixed income ETFs (and why there’s still room for improvement) [0:35:42.3]
• Foreign withholding taxes on the Vanguard and iShares asset allocation ETFs [0:38:09.3]
• Ask Bender: Martin has a question about the foreign withholding tax implications of the new iShares USD ETFs (XUU.U, XEF.U, XEC.U and XAW.U) [0:39:28.3]
• Next episode, we’ll tackle asset location (i.e. where you should hold each of your ETFs for maximum tax efficiency). See you then! [0:42:06.3]

In Episode 2, Justin gets into the weeds of tax loss selling with ETFs. You’ll learn the core rules to follow, common pitfalls to avoid, and the best “portfolio-tested” ETFs for implementing this tax-efficient strategy. Back by popular demand, the show also features another ETF Kombat, this time with VCN and XIC facing-off in an epic battle you can’t miss. And if you don’t have time to listen to the entire episode, skip ahead to the TLDL (too long, didn’t listen) segment, where the entire episode will be summarized in under five minutes.

• Introduction to tax loss selling [0:00:47.2]
• Why it’s sometimes okay to “sell low” [0:02:38.2]
• Understanding CRA’s superficial loss rules [0:03:36.2]
• Which ETFs are classified as “identical property”, according to CRA? [0:05:47.2]
• Should you worry about the future performance of your replacement ETF? [0:07:30.2]
• Why you need to coordinate tax loss selling with your spouse [0:09:18.2]
• Why DRIPs can be an investor’s worst nightmare when tax loss selling [0:11:00.2]
• How diversifying your portfolio managers can “di-worsify” your tax loss selling strategy [0:11:51.2]
• Should you look for tax loss selling opportunities year-round, or just in December? [0:12:58.2]
• How big of a loss do you need before selling your ETF? Larry Swedroe’s $5,000 and 5% rule [0:14:03.2]
• Justin Bender’s $10,000 and 10% adjusted rule [0:16:17.2]
• Should you bank losses, even if you have no gains to offset? [0:18:19.2]
• Justwealth’s tax loss selling strategy, featuring James Gauthier, Chief Investment Officer [0:20:24.2]
• PWL Toronto’s tax loss selling strategy, featuring Shannon Bender, Portfolio Manager [0:23:09.2]
• ETF Kombat: VCN vs. XIC [0:26:44.2]
• Introducing PWL Toronto’s tax loss selling ETF pairs: [0:31:33.2]

• Global equity (ex Canada): XAW/VXC [0:32:38.2]
• Canadian equity: VCN/FLCD, XIC/FLCD, ZCN/FLCD [0:35:11.2]
• U.S. equity: XUU/VUN [0:40:21.2]
• International equity: XEF/ZEA [0:41:50.2]
• Emerging markets equity: XEC/ZEM [0:43:58.2]
• Improving your international and emerging market equity tax loss selling ETF pairs [0:45:35.2]
• Are asset allocation ETFs ideal for tax loss selling? [0:49:42.2]
• TLDL (Too Long, Didn’t Listen) – a quick summary of the main topics [0:52:40.2]

In the debut episode of the Canadian Portfolio Manager podcast, we kick things off by helping you choose which Vanguard Asset Allocation ETF is right for you. During the show, Justin estimates the future expected returns of these one-fund solutions, and also discusses the reasons for their overweight to Canadian stocks. At the end of the podcast, personal finance expert, Robb Engen (of Boomer and Echo fame), asks Justin whether he should optimize his portfolio to save on product fees and taxes.

• Using Vanguard’s Investor Questionnaire as a starting point to determining a suitable portfolio mix between stocks and bonds [0:02:54.1]
• Why you shouldn’t buy any of these ETFs if you need the cash back in less than 5 years [0:04:17.1]
• Picking the best asset allocation ETF for your time horizon [0:05:03.1]
• Why you should pay more attention to your willingness to take risk, rather than your ability to take risk [0:06:04.1]
• Considerations for new investors who want to dive head first into an aggressive all-equity portfolio [0:08:50.1]
• How to estimate the future returns on stocks and bonds [0:10:53.1]
• The underwhelming expected returns for VCIP, VCNS, VBAL, VGRO and VEQT [0:18:28.1]
• ETF Kombat: VGRO vs. XGRO [0:20:24.1]
• The “optimal” split between Canadian and foreign stocks in your portfolio [0:24:17.1]
• Is a more complicated portfolio worth the hassle (featuring Robb Engen)? [0:33:12.1]