Canadian Portfolio Manager Podcast

All That Glitters Are Gold ETFs

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]

Hedging Your Bets, With Currency-Hedged ETFs

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]

Making Cents of Your ETF's Loonie Currency Exposure

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)

Asset Location Strategies with the "Plaid" Model ETF Portfolios

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

Asset Location Strategies with the "Ludicrous" 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