Inflation

Inflation

Canadian equity ETFs for your portfolio

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By Dale Roberts, cutthecrapinvesting

Special to Financial Independence Hub

Today we’ll look at the core Canadian equity ETFs that you might use when you build a global ETF portfolio. The Canadian stock market is dominated by financials and energy. It is not a well-diversified index. It might be a case of pick your poison, a level of ‘undiversification.’

That said, the weakness of the Canadian stock market is quickly picked up by U.S. and International market ETFs. Also, Canadian stocks can add a layer of inflation protection that is missing from the U.S. market. Once again, we’re coming back to the beauty of a global ETF portfolio, on the Sunday Reads.

Off the top, what do we mean by buying the stock market of a country or region? Have a read of … What is index investing?

Building your global ETF portfolio

For an overview of ETF portfolio building, check out the ETF model portfolio page. We’re going to build around the core assets …

You can certainly add more assets such as gold, REITs (real estate) plus U.S. and international bonds, but many Canadians will stop with a simple but effective core ETF portfolio.

The core models are offered at Tangerine Investments where I was an investment advisor and trainer for several years.

Canadian Core Equity ETFs

The most popular index used to capture the Canadian stock market is the TSX Composite. To buy the ETF that tracks the index you could use the ticker XIC-T.

The index holds 300 of the largest publicly traded companies in Canada across many sectors.

We can see that the index is dominated by Financials, Energy and Materials. It is not a well diversified index / stock market. That said, the index plays to Canada’s strengths by design. We have one of the strongest banking and insurance industries in the world, and we have the oil and gas and materials that North America and the world needs. Canadian banks have historically outperformed just about everything over the longer term (even including U.S. stocks, the S&P 500), but that doesn’t mean that you necessarily want to go all in on Canadian financials.

Another popular index for Canada is the TSX 60 ticker XIU-T. The index holds 60 of the largest companies in Canada. Here is the sector breakdown.

XIC is moving to a period of outperformance, says Morningstar due to greater exposure to materials, and less reliance on financials compared to XIU. We can say that XIC is more “diversified.” The materials index includes gold and other mining stocks that are on a tear.

Here’s the materials ETF vs XIC.

Gold and materials are very inflation-friendly. You can see the spike in the COVID period as well when we had a brief inflation scare.

iShares Core S&P/TSX Capped Composite Index ETF XIC

Here’s the overview from Morngingstar. Continue Reading…

Top 4 Ways to Lower your Monthly Expenses in 2026

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Reduce your spending in 2026 to secure your retirement. Follow our tips on insurance, energy bills, and budgeting to lower your monthly expenses.

By Dan Coconate

Special to Financial Independence Hub

Image Credentials: Adobe Stock, Liubomir, 1845777350

Retirement should feel like a reward for decades of hard work, not a financial tightrope walk. As the cost of living fluctuates, many Canadians near or in retirement worry about their nest egg stretching far enough.

You can take control of your financial future by making strategic adjustments today. Simple life changes can help you preserve your wealth and enjoy greater peace of mind.

Below, we explore the top ways to lower your monthly expenses in 2026 so you can navigate the year with confidence.

1.) Review your Auto Insurance Policy

Auto insurance premiums often creep up unnoticed and eat away at your monthly budget. A renewal notice might arrive showing a higher rate than the previous term. There are several reasons why your car insurance premium might suddenly go up, such as a change in address, adding a new driver to your policy, or a lapse in coverage. Even a minor speeding ticket can impact your rates for years.

Furthermore, industry-wide inflation raises repair costs, which insurers pass on to policyholders. If you notice a spike in your bill, take some time to address the root cause. You might lower this cost by shopping for new quotes, increasing your deductible, or bundling your home and auto policies.

2.) Track your Daily Spending

You cannot fix what you do not measure. Many individuals know their income figures but lack clarity on exactly where money exits their accounts. To solve this, subtract your savings from your after-tax earnings to determine what you actually spend. This simple calculation often reveals surprising leaks in your budget.

Once you identify where funds go, you can decide which expenses add value and which you can eliminate. Maintaining positive cash is a great financial New Year’s resolution for 2026 that will keep your retirement plan on track regardless of market volatility.

3.) Audit your Digital Subscriptions

Automatic payments quietly drain bank accounts. It’s easy to accumulate streaming services, cloud storage plans, and app subscriptions that you rarely use. Sit down with your credit-card statement, and identify every recurring charge. Cancel any service that you have not used in the last three months. Check whether family plans or annual payment options offer a lower overall rate for the services you choose to keep. Continue Reading…

Consider all your Retirement Investment Management Options for a Financially Sound Future

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Here’s a look at some of your best retirement investment management options and choices. These include pensions, RRSPs, RRIFs and more.

TSInetwork.ca

Your retirement investment management plan should build in contingencies for long-term medical needs and supplemental health insurance. As well, you should factor in caring for loved ones who are unable to take care of themselves.

When you work out a plan for your retirement, make sure that you aren’t basing your future income on overly-optimistic calculations that will end up leaving you short. Retirement income can come from many different sources, such as personal savings, Canada Pension Plan, Old Age Security, company pensions, RRSPs, RRIFs, and other types of investment accounts.

Learn how your retirement investment management works in a Canada Pension Plan (CPP)

The Canada Pension Plan, or CPP, is the name for the Canadian national social insurance program. The program pays out based on contributions, and it provides income protection for individuals or their survivors in the instance of retirement, disability or death. Since 1999, the CPP has been legally permitted to invest in the stock market.

Nearly all individuals working in Canada contribute to the CPP, unless they live in Quebec, where the Quebec Pension Plan (QPP) exists and provides comparable benefits.

Applicants can apply to receive full CPP benefits at age 65. The CPP can be received as early as age 60 at a reduced rate. It can also be received as late as age 70, at an increased rate.

Here’s a look at some of the pensions or benefits provided by the Canada Pension Plan:

  • Retirement pension
  • Post-retirement pension
  • Death benefit
  • Child rearing provision
  • Credit splitting for divorced or separated couples
  • Survivor benefits
  • Pension sharing
  • Disability benefits

Use a Registered Retirement Savings Plan (RRSP) as a starting place when you look into retirement investment management

An RRSP is a great way for investors to cut their tax bills and make more money from their retirement investing.

RRSPs were introduced by the federal government in 1957 to encourage Canadians to save for retirement. Before RRSPs, only individuals who belonged to employer-sponsored registered pension plans could deduct pension contributions from their taxable income.

RRSPs are a form of tax-deferred savings plan. They are a little like other investment accounts, except for their tax treatment. RRSP contributions are tax deductible, and the investments grow tax-free.

You might think of investment gains in an RRSP as a double profit. Instead of paying up to, say, 50% of your profit to the government in taxes and keeping 50% to work for you, you keep 100% of your profit working for you, until you take it out.

Convert an RRSP to a RRIF to create one of the best investments for retirement

A Registered Retirement Income Fund (RRIF) is another good long-term investing strategy for retirement.

Converting your RRSP to a RRIF is clearly one of the best of three alternatives at age 71. That’s because RRIFs offer more flexibility and tax savings than annuities or a lump-sum withdrawal (which in most cases is a poor retirement investing option, since you’ll be taxed on the entire amount in that year as ordinary income). Continue Reading…

Top ETF trades for 2026: Conviction, context and a respect for unpredictability

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By Bipan Rai, Managing Director, BMO Global Asset Management

(Sponsor Blog)

The end of the year is a special time. The slowing modulation of the markets gives many an analyst time to unplug, which inevitably leads to reflection about what the next year will bring. And as ideas begin to take shape, convictions start to form and a general sense of where the market is headed is reached.

It is almost always a humbling exercise.

For instance, just consider a subset of the important macro/market events from 2025:

  • The repeated rounds of tariffs and counter-tariffs between the U.S. and its largest trading partners (Canada/Mexico/China/EU).
  • A massive sell-off in the spring that took the S&P 500 into bear market territory.
  • The U.S. toying with the idea of raising taxes on foreign investors (Section 899).
  • Inflation remaining above target across many jurisdictions for most of the year.
  • Israel and Iran exchanging strikes: with the U.S. also getting involved by attacking Iranian nuclear sites.
  • Repeated attacks by the U.S. president on the sitting Fed chair, with the president openly admitting that he’d like to fire the chair and replace him with someone who is more aligned to his views.
  • The U.S. president attempting to remove a sitting Fed board member.
  • The longest U.S. government shutdown in history.
  • Market concentration remaining high with AI tiptoeing further into ‘bubble’ territory.

If, at the end of 2024, you had given us the above observations for 2025 there is little chance we would have expected U.S. equities to return 15-16% that year. We would have probably gotten the direction on gold right, but almost certainly whiffed on the magnitude of gains (at around 60%).

That is why we are going into this exercise clear-eyed and with a sense of trepidation (and maybe a bit of dread). What we can say is, given the current set-up the below trades are best positioned to serve our readers well as they look to calibrate for 2026. Please note, this is a very different exercise than our portfolio strategy (which will be out later in the new year). Instead of constructing a portfolio tailored for a particular investing approach, we are selecting ETF trades that we feel will outperform given the available information on the macro that we have on hand now.

First, some basic assumptions:

  • We expect the U.S. economy to grow at trend (1.8-2.0%1) in 2026 with inflation remaining above the 2% target for the year. Additionally, the labour sector should remain under some modest pressure, which leads the Federal Reserve to cut interest rates 1-2 more times in 25 basis-point (bps) increments.
  • For Canada, growth is likely to slow from this past year and settle at around 1.4-1.5%. That is still slightly below potential, which implies that inflationary pressures should remain contained. The Bank of Canada (BoC) is likely done easing for now and talks of rate hikes in late 2026 still feel premature.
  • We expect the S&P 500 to rally by about 8-10% in 2026.
  • We expect a consolidative environment for CAD and U.S. yields to start the year, which should give way to upside as the year progresses.
  • We see downside risks to USD/CAD2 over the next three months.

With that out of the way, let’s get started.

Theme #1: Late-cycle dynamics still favour Quality …

Into 2026, we’d characterize the backdrop for the U.S. economy as one that favours resilience over cyclicality. That is not least given that the current phase of economic expansion feels a bit long in the tooth and the combination of fiscal and monetary measures might lead to an economy that runs hot (i.e., higher prices, moderate growth). In such an environment, we expect investors to prioritize companies with strong balance sheets and stable earnings: important ‘Quality’ characteristics.

Top trades for this theme:

Chart 1 – Average monthly returns for months when Core CPI is > 2%3

Source: BMO Global Asset Management / MSCI. For U.S. factors; observations go back by 14 years.

Theme #2:  … But with broader leadership …

Much of 2025 was characterized by a migration of flows out of the U.S. and into EAFE and EM markets.4 Given the strength and stability of earnings outside of North America, we expect this theme to continue into 2026.

Aside from valuation (see Chart 2), two other catalysts for this resiliency will be the widespread adoption of new technologies in non-U.S. markets, and fiscal expansion in many countries. Both should work together to improve productivity trends outside of the U.S.

In the emerging world, we see the alignment of different themes working together to attract additional capital to these regions. Indeed, commodity exporters in Latam5 should continue to benefit from rising prices, while an improving backdrop in China should boost activity in smaller Asian markets.

Top trades for this theme:

Chart 2 – Several international markets still look cheap relative to the U.S.

Source: BMO Global Asset Management / MSCI. A forward price-to-earnings ratio (Fwd P/E) is a stock valuation metric that compares a company or stock index’s current share value to estimated future earnings over the next 12 months.

Theme #3:  … And a rotation away from AI

The delicate rotation away from AI/Tech and into other sectors should continue and will likely engender further uncertainty. However, greater adoption of technology outside of Tech/Communications sectors will likely shift capital over to cheaper segments of the U.S. market.

Within the Tech/Communications sectors, we feel active strategies will be better placed to perform. That is largely because the market will become judicious about picking winners and losers in the AI race as increased reliance on debt financing will mean that existing capital structures are more heavily scrutinized. That should portend a more consolidative environment for broad tech: which supports a product like ZWT, given its generous yield.

Outside of tech, two sectors that we feel are best positioned are U.S. Health Care and Financials. In particular, Health Care has emerged as an effective hedge against AI-related concerns. The sector is still a bit ‘cheap’ as well, which has also worked to support its performance over the past months.

For Financials, we expect demand for loans in the U.S. economy to remain strong: not least as household balance sheets remain in good standing and as valuations remain cheap when compared to other sectors. An additional tailwind comes from regulatory changes that should free up more capital for deployment.

Top trades for this theme:

Theme #4: Elbows up!

In Canada, we remain constructive on Financials but also acknowledge that the market is likely to be one in which alpha6 can be generated through more active strategies.

Indeed, we continue to like Canadian banks. Strong capital positions and the ability to generate revenues outside of traditional retail-based lending means there are plenty of opportunities for capital deployment in 2026. However, valuation remains a bit of a headwind. As such, we favour a covered call strategy instead of a beta7 one. Continue Reading…

4 ETFs and Portfolio Strategies to Calm AI Bubble Concerns

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Image by rihaij from Pixabay

Below we canvas four retirement experts and financial planners  about how they or their clients can select certain ETFs to calm concerns about an inflating A.I. Bubble.

These experts were gathered by Featured.com, which has been supplying Findependence Hub with quality content for several years. It recently changed its procedure so editors like myself can request input on particular topics we think will interest our readership. The sources are all on LinkedIn, as you can see by clicking on their profiles below.

Here’s what we asked for this instalment:

Concerns about an AI bubble have investors searching for ways to protect their portfolios without missing out on growth opportunities. We are looking for exchange-traded fund strategies that balance exposure to innovation with downside protection, drawing on analysis from seasoned market professionals. These approaches range from value-weighted diversification to defensive sector allocation, offering practical options for managing risk in today’s volatile market environment.

  • Buy Undervalued Dividend Stocks With Discipline
  • Blend Value Equal Weight and Payouts
  • Cap AI Exposure Favor Quality and Income
  • Diversify Broadly Across Defensive and Alternative Hedges

Buy Undervalued Dividend Stocks with Discipline

I don’t use low-volatility ETFs at all: I build concentrated portfolios of individual dividend-paying stocks that meet strict valuation criteria. Our G@RY system scans for companies trading cheap relative to historical P/E ratios and dividend yields; then I manually curate based on fundamentals. When the AI hype cooled this spring, we added JPM and WMT on April 3rd during panic selling: both quality names with real earnings power and dividends near historical highs.

The “AI bubble” question assumes you need defensive positioning, but I see it differently after 25 years watching cycles. UnitedHealth dropped 40% last year on sentiment, not fundamentals: we bought it at sub-10 forward P/E with a 2.8% yield when everyone hated it. That’s value investing: buying durable businesses when they’re out of favor, not hedging with volatility products.

For clients worried about tech concentration risk, we simply avoid overvalued names and focus on companies with EBITDA margins, consistent cash flow, and dividend growth histories. Home Depot and PepsiCo replaced Darden after 40% gains:  that’s active management, not passive ETF layering. When fundamentals are solid and yields are attractive, volatility becomes opportunity rather than risk. — Frank Gristina, Managing Partner, Acadia Wealth Advisors

Blend Value, Equal-Weight and Payouts

One way to think about positioning for 2026 in light of AI valuation concerns is not to treat it as a binary choice between “all in” or “all out” on growth and AI-linked assets, but rather as a balanced exposure strategy that manages valuation risk while preserving participation in structurally important themes.

The low-volatility approach discussed in the Findependence Hub blog is one practical building block because it tempers portfolio swings, but I view it as part of a broader allocation framework. Three additional options I like are:

  1. Broad indices like the S&P 500 have become increasingly concentrated in a small group of high-growth, high-multiple technology stocks. Shifting part of the allocation toward value-oriented companies with solid cash flows and more reasonable valuations helps reduce reliance on continued multiple expansion (yes, value has underperformed recently, but that is what has driven today’s valuation gap). A practical implementation in the U.S. market is the iShares S&P 500 Value ETF (IVE), which tilts exposure toward businesses where returns are more closely tied to fundamentals.
  2. Using an equal-weight S&P 500 allocation. An equal-weight approach naturally reduces concentration in the largest mega-cap names and redistributes exposure across the broader market. The Invesco S&P 500 Equal Weight ETF (RSP) is a straightforward way to achieve this. It keeps investors invested in U.S. equities while limiting dependence on a handful of stocks that dominate index returns.
  3. Adding a dividend growth strategy for stability. A dividend growth ETF such as the iShares Core Dividend Growth ETF (DGRO) adds another layer of balance. Its historical performance has been strong and has only modestly lagged the benchmark, while offering a more stable return profile. Companies with a consistent ability to grow dividends tend to have resilient cash flows and disciplined capital allocation, which can help smooth returns during periods of elevated volatility or valuation compression. Continue Reading…