ETF Model Portfolios for Canadian Investors
The following model portfolios use low-cost, broadly diversified ETFs available on Canadian exchanges. Each portfolio is designed to be implemented with minimal ongoing management — purchase the ETFs in the specified proportions and rebalance annually or when allocations drift more than 5% from targets.
Conservative Portfolio (40/60)
| ETF | Allocation | Role | MER |
|---|---|---|---|
| ZAG (BMO Aggregate Bond) | 40% | Canadian bonds | 0.09% |
| XBB (iShares Core Bond) | 20% | Broad fixed income | 0.10% |
| VCN (Vanguard FTSE Canada) | 12% | Canadian equity | 0.05% |
| XUU (iShares Core S&P US) | 16% | US equity | 0.07% |
| XEF (iShares Core EAFE) | 8% | International developed | 0.22% |
| XEC (iShares Core EM) | 4% | Emerging markets | 0.26% |
Weighted MER: 0.10% | Expected return: 5-6% | Max drawdown: 15-20%
Balanced Portfolio (60/40)
| ETF | Allocation | Role | MER |
|---|---|---|---|
| ZAG | 30% | Canadian bonds | 0.09% |
| XBB | 10% | Broad fixed income | 0.10% |
| VCN | 18% | Canadian equity | 0.05% |
| XUU | 24% | US equity | 0.07% |
| XEF | 12% | International developed | 0.22% |
| XEC | 6% | Emerging markets | 0.26% |
Weighted MER: 0.11% | Expected return: 6-7% | Max drawdown: 20-30%
Growth Portfolio (80/20)
| ETF | Allocation | Role | MER |
|---|---|---|---|
| ZAG | 15% | Canadian bonds | 0.09% |
| XBB | 5% | Broad fixed income | 0.10% |
| VCN | 20% | Canadian equity | 0.05% |
| XUU | 35% | US equity | 0.07% |
| XEF | 16% | International developed | 0.22% |
| XEC | 9% | Emerging markets | 0.26% |
Weighted MER: 0.12% | Expected return: 7-8% | Max drawdown: 30-40%
All-Equity Portfolio (100/0)
For professionals with 20+ year horizons and high risk tolerance, a 100% equity portfolio maximizes expected long-term returns. The simplest implementation is a single asset allocation ETF like VEQT or XEQT, which provides global equity diversification with automatic rebalancing at 0.20-0.24% MER.
One-Fund Alternatives
If managing multiple ETFs feels complex, each of the above allocations is available as a single fund: VCNS (40/60), VBAL (60/40), VGRO (80/20), VEQT (100/0). The slightly higher MER (0.24% vs 0.10-0.12% for DIY) buys you automatic rebalancing and complete simplicity. For most professionals, the time savings justify the small additional cost.