Income tilted Canadian balanced portfolio with strong yield quality and low volatility tilts
Report created on Mar 27, 2026Risk profile
- Secure Speculative
The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.
Diversification profile
- Focused Diversified
The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.
Positions
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XE iShares Core Equity Portfolio
XEQT - CA46436D1087 52.00% -
XE iShares S&P/TSX Composite High Dividend Index ETF
XEI - CA46431L1132 28.00% -
VD Vanguard FTSE Canadian High Dividend Yield
VDY - CA92203Q1046 20.00%
The structure is very focused: three equity ETFs make up 100% of the holdings, with over half in a broad core equity fund and the rest split between two Canadian high-dividend ETFs. That means all the diversification and risk management comes from how these three funds are built and combined. A simple lineup like this is easy to monitor and rebalance, but it also concentrates decisions into a small number of levers. For many investors, such simplicity is a strength, as it reduces the temptation to tinker. The key takeaway is that any change to one ETF’s weight meaningfully shifts the portfolio’s growth potential, income level, and short‑term volatility.
Growth
From mid‑2019 to early 2026, $1,000 grew to about $2,367, a compound annual growth rate (CAGR) of 14.33%. CAGR is the “smooth” yearly growth rate, like average speed on a road trip. This trailed the U.S. market by just over 1% per year, but beat the global market by about 1.45% annually, which is a solid outcome. The max drawdown of roughly −36% shows this portfolio can still fall sharply in crises, a bit more than the benchmarks did. The fact that 90% of returns came from just 25 days highlights how missing a small number of strong days could severely hurt long‑term results.
Asset classes
- Stocks 66%
- US Equity 34%
All holdings are in equity ETFs, so this is a pure‑stock portfolio even though it carries a “balanced” risk label. That means no bonds or cash buffers are built into the asset mix; instead, risk is managed through factor tilts like yield and low volatility and through diversification across many companies. Compared to a traditional balanced mix that might hold 40–60% in fixed income, this approach will swing more with stock markets, both up and down. For someone comfortable with equity‑like volatility, this is reasonable, but anyone expecting smoother returns would normally consider adding a separate pool of lower‑risk assets outside this core.
Sectors
- Financials 30%
- Energy 19%
- Technology 11%
- Industrials 7%
- Telecommunications 6%
- Consumer Discretionary 6%
- Basic Materials 6%
- Utilities 6%
- Health Care 4%
- Consumer Staples 3%
- Real Estate 3%
This breakdown covers the equity portion of your portfolio only.
Sector-wise, the allocation is clearly tilted: financials at about 30% and energy near 19% stand out, with technology only around 11%. That mix is more income‑oriented than growth‑oriented and broadly aligns with typical Canadian equity patterns, which is helpful for investors wanting familiar, established businesses. However, heavy exposure to financials and energy can amplify sensitivity to interest rates, credit conditions, and commodity cycles. When those sectors do well, this kind of portfolio can shine; when they lag, performance may trail more growthy, tech‑heavy lineups. The upside is that the overall sector spread across industries is still fairly broad, supporting decent diversification within equities.
Regions
- North America 84%
- Europe Developed 8%
- Japan 3%
- Asia Developed 2%
- Asia Emerging 1%
- Australasia 1%
This breakdown covers the equity portion of your portfolio only.
Geographically, about 84% sits in North America, with modest allocations to developed Europe, Japan, and other Asia. This is a clear home‑region tilt alongside U.S. exposure, which often feels intuitive and reduces currency unfamiliarity. Relative to a truly global benchmark, exposure outside North America is on the low side, meaning results will track North American conditions more closely. That’s been beneficial over the last decade, but it does leave the portfolio more vulnerable if North America underperforms other regions for an extended period. Investors who want more global balance might eventually consider raising the share of non‑North‑American stocks to smooth region‑specific risks.
Market capitalization
- Mega-cap 48%
- Large-cap 27%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 1%
This breakdown covers the equity portion of your portfolio only.
Market‑cap exposure is anchored in larger companies: roughly 48% mega‑cap, 27% large‑cap, with 20‑ish% in mid‑caps and only small slivers in small and micro‑caps. Large and mega‑cap stocks tend to be more established, profitable, and liquid, which often makes them less volatile than tiny companies. This structure fits well with a quality‑ and yield‑oriented style, because many large firms pay stable dividends. On the other hand, the limited small‑cap exposure means less access to the potentially higher long‑term growth (and higher risk) that smaller companies can offer. For many long‑term investors, this large‑cap bias is a comfortable core building block.
True holdings
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XT iShares Core S&P Total U.S. Stock Market Index ETF 10.95%
Part of fund(s):- iShares Core Equity Portfolio
-
RY Royal Bank of Canada 5.13%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
TD Toronto Dominion Bank 4.03%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
EN Enbridge Inc 3.29%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
CN Canadian Natural Resources Ltd 3.07%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
BM Bank of Montreal 2.75%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
CM Canadian Imperial Bank Of Commerce 2.52%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- iShares S&P/TSX Composite High Dividend Index ETF
-
SU Suncor Energy Inc 2.43%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares S&P/TSX Composite High Dividend Index ETF
-
TR TC Energy Corp 2.30%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares S&P/TSX Composite High Dividend Index ETF
-
BN Bank of Nova Scotia 1.55%
Part of fund(s):- Vanguard FTSE Canadian High Dividend Yield
- iShares Core Equity Portfolio
- iShares Core S&P/TSX Capped Composite
- Top 10 total 38.02%
Looking through the ETFs, the largest underlying exposure is broad U.S. equities via the iShares Core S&P Total U.S. Stock Market ETF at nearly 11%. Within Canada, big banks and energy infrastructure names dominate: Royal Bank, TD, Enbridge, Canadian Natural Resources, and several other financials and energy companies appear prominently. Because these same companies show up in multiple dividend ETFs, there is hidden concentration in a relatively small handful of Canadian blue chips. Overlap is likely understated since only ETF top‑10 holdings are captured. The practical takeaway is that even though there are three ETFs, the economic exposure leans heavily on a modest number of large North American companies.
Factors
Factor exposure is dominated by Yield, Low Volatility, and Momentum. Factors are like underlying “traits” that explain why groups of stocks behave similarly over time. A strong yield tilt means the portfolio favours higher‑dividend payers, which can support a steady cash flow stream. The low‑volatility tilt suggests holdings that historically moved less than the market, helping cushion downturns. Momentum exposure indicates a preference for stocks that have been trending positively, which can boost returns during strong markets but can hurt when trends reverse quickly. Value exposure is present but moderate. Overall, this blend should behave more defensively than a pure growth portfolio, while still participating meaningfully in rising markets.
Risk contribution
-
iShares Core Equity Portfolio
Weight: 52.00% 47.3% -
iShares S&P/TSX Composite High Dividend Index ETF
Weight: 28.00% 30.9% -
Vanguard FTSE Canadian High Dividend Yield
Weight: 20.00% 21.8%
Risk contribution shows how much each ETF adds to total ups and downs, which can differ from simple weight. Here, the broad iShares Core Equity Portfolio is 52% of assets but contributes about 47% of the risk, slightly less than its size would suggest. The two Canadian high‑dividend ETFs contribute a bit more risk than their weights, reflecting their sector and geographic concentration. Because only three positions exist, they naturally account for 100% of portfolio risk. The encouraging sign is that none of them dominates risk excessively. Periodic rebalancing between these three can keep risk contributions aligned with whatever balance between growth and income is most comfortable.
Redundant positions
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High correlationVanguard FTSE Canadian High Dividend YieldiShares S&P/TSX Composite High Dividend Index ETF
The high correlation between the two Canadian high‑dividend ETFs means they tend to move together, especially during local market stress. Correlation measures how similarly assets move; when it’s high, the benefit of holding both is smaller, because they often rise and fall at the same time. In this case, they still provide some diversification through differences in exact holdings and index methodology, but they largely share the same economic drivers. The core equity ETF adds an important diversifying layer because of its broader exposure, including U.S. stocks. For risk management, the main diversification levers are the balance between the broad core fund and this highly correlated dividend pair.
Risk vs. return
This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.
Click on the colored dots to explore allocations.
On the risk‑return chart, the current portfolio shows an expected return of 14.53% with volatility of 15.94% and a Sharpe ratio of 0.79. The “optimal” mix of the same holdings improves the Sharpe to 0.88 with slightly higher risk, and the minimum‑variance mix achieves a Sharpe of 0.83 with lower risk. The key idea: the efficient frontier represents the best achievable return for each risk level using only these ETFs. Because the current allocation sits below that frontier, a different weighting of the same three funds could deliver either higher expected return for similar risk or similar return with lower risk. Periodic, rules‑based rebalancing toward those more efficient mixes can gradually improve the overall trade‑off.
Dividends
- Vanguard FTSE Canadian High Dividend Yield 0.90%
- iShares S&P/TSX Composite High Dividend Index ETF 0.80%
- Weighted yield (per year) 0.40%
Dividend yield is clearly a priority, with both Canadian dividend ETFs carrying relatively high stated yields and boosting the portfolio’s overall income. Yield here reflects the cash income investors receive as a percentage of investment value each year. While the blended “TotalYield” figure of 0.40% looks low on its own, that’s likely because it’s averaged across all holdings, including those where yield isn’t the focus. Income‑oriented investors often appreciate having a material chunk of returns come from dividends rather than just price gains. The trade‑off is that high‑yielding stocks can be more concentrated in certain industries, which is visible in the financial and energy tilts.
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