Good morning. I’m Andrew Galbraith, investment reporter at The Globe and Mail, taking over from Meera this week. Pop quiz: How much are you actually paying for your ETFs?
Like a growing number of Canadians looking ahead to retirement, I prefer to take direct control over my investments. But a new tool has me asking if I’ve really understood what my portfolio is doing.
Peeking under your portfolio’s hood
If you own an exchange-traded fund, you’re probably familiar with its management expense ratio – the annual fee managers charge to run it, expressed as a percentage of your investment. Years of competition have brought MERs on broad market ETFs down to fractions of a per cent, keeping more money in investors’ pockets. But those fees still add up.
It was only this week that I tallied up my own ETF expenses thanks to a free (for now) Canadian website and app called Greenline.
Built on the principle that investors should know more about their investments than their coffee budgets, the app is designed as a one-stop shop for tracking and analyzing investment portfolios. Toronto-based Sammy Lau, Greenline’s co-founder, said that the idea sprang from his own attempts to understand what was going on with his money, which grew into an unwieldy spreadsheet. (Raise your hand if you’ve been there🙋)
Mr. Lau said he found many Canadians had effective tools for budgeting, but didn’t have a good way to keep track of their investment accounts.
When you import your data into Greenline – it doesn’t link directly to your brokerage for security reasons – you’re presented with a slick dashboard presenting your portfolio and an AI-generated summary of its performance. Other widgets show your expected dividend income, an analysis of your portfolio concentration and your investment week in review.
You can see a breakdown of your holdings by asset class, currency, sector and region, as well as estimates of all the fees you’re paying. Greenline also gives estimates for your adjusted cost base, a common source of headaches for investors with multiple accounts. A weekly e-mail summary from a friendly AI bot keeps you up to date.
It’s still in beta, with the bugs that entails, but I still plan to add it to my tool kit.
Will my investment strategy change now that I know my average MER to within 0.01 of a percentage point? Probably not. But seeing my exposure to AI-sector companies clearly broken down has given me something to think about.
Here’s another thing to consider, though: In a recent appearance on the Iced Coffee Hour podcast, PWL Capital chief investment officer and portfolio manager Ben Felix said that checking on a portfolio frequently makes investors more averse to risk, negatively impacting returns over time. Mr. Felix said he “almost never” checks his portfolio, which consists of a single mutual fund.
How often do you track your investments? What tools do you find indispensable and what do you wish was available? Send me an e-mail at agalbraith@globeandmail.com.
The Calculator
4.17 per cent
That was the Government of Canada’s 30-year bond yield on Tuesday morning as a market sell-off lifted yields around the world. It was the highest since 2009. Analysts have warned that higher yields could threaten economic growth and weigh on equity and credit markets.
More: The U.S. Treasury Department said it would more than double the amount of U.S. government bonds it will buy back to try to stabilize the market, but nerves are still jittery.
The Retirement Receipt
Melissa Tait/The Globe and Mail
How can Mandy, 64, and Syed, 65, make the most of their hard-earned savings in retirement?
The question: Is this couple set for a comfortable retirement if Mandy retires from her business manager role next year, and what is the optimal draw-down strategy?
The financial background: Mandy and Syed have built up a sizable investment portfolio, totalling $1.8-million, along with a paid-off mortgage on a house worth $1.3-million. Much of their investment portfolio sits in RRSPs and LIRAs, and they have more than $250,000 in their TFSAs. Mandy’s defined-benefit pension will start paying $12,000 a year from the age of 65, and Syed plans to continue part-time work for two or three years, earning $10,000 a year.
The goal: Mandy and Syed are targeting retirement spending of $75,000 a year after tax, rising in line with inflation.
The financial planner’s advice: Mandy is likely well-positioned to retire in 2027. But they should prepare cash flow projections that stress-test their plan, using different assumptions of investment returns, inflation and longevity. “Retirement planning is about confidence under adverse scenarios, not just average ones,” said Corrinna Paxton, a certified financial planner at Objective Financial Partners in Kelowna, B.C.
Best of the Rest
💔The climbing cost of ’grey divorces.’ Divorces among people over 50 are more common than they used to be and come with both emotional and financial costs. Wanting to leave a marriage and being able to afford to leave a marriage are two different things, but careful planning can help mitigate the financial strain.
🏠The rise of the accidental landlord. Some recent first-time condo buyers, squeezed by changing life situations and a weak housing market, are choosing to rent out their units rather than selling them at a loss. But would it be wiser to sell anyway and redeploy that money elsewhere?
🔥Inside the early battle against the ferocious Bald Range wildfire. This gripping in-depth story by The Globe’s Jesse Winter and Andrea Woo offers a rare look inside a wildfire response command centre during one of the most aggressive and damaging wildfires in recent years.
💸Why Scott Bessent is playing with the Treasury market. James Mackintosh at The Wall Street Journal argues that higher yields primarily reflect a need for more capital, and are “part of the reckoning for excessive borrowing” by governments, AI companies and others.
Try This
💰Learn from the biggest money fails. The Globe asked several financial advisers the biggest mistakes they’ve seen clients make. Wealth adviser Tina Tehranchian, for example, said entrepreneurs will sometimes spend years building a successful business but not consider tax planning around retirement. Advisers also said concentrated portfolios, questionable tax shelters and poorly planned inheritance were costly missteps.
