Module 2: ETF Investing & Index Strategies — Stocks10X
🍁
MODULE 02
VCN ▲ 0.4%
XIU ▲ 0.2%
VFV ▲ 0.8%
VGRO ▲ 0.5%
🍁
ETF Investing &
Index Strategies
Simple, Low-Cost Investing for Canadians
👤
PRESENTER
Jasmeet Singh
⏱
DURATION
50–60 Minutes
📚
LEVEL
Beg. to Intermediate
1 / 20
Fundamental Concepts
MODULE 2 · SLIDE 02
What Are ETFs?
Exchange-Traded Funds combine the best features of stocks and mutual funds.
🧺
A Basket of Securities
Instead of buying one company, you buy a fund that holds dozens or hundreds of companies at once.
🌐
Instant Diversification
One trade spreads your risk across entire sectors or countries. Don't put all your eggs in one basket.
💸
Trades Like a Stock
Buy and sell anytime during market hours. Prices update in real-time, unlike mutual funds.
🍔 The Buffet Analogy

"Buying individual stocks is like ordering à la carte. Buying an ETF is like the buffet — you get a little bit of everything for one low price."

$35.00 / share
📊
ETF Unit
Example: XIU (TSX 60)
UNDERLYING HOLDINGS
🏦
Royal Bank
💰
TD Bank
🛍
Shopify
🚂
CN Rail
⚡
Enbridge
📱
BCE Inc.
+ 54 other large Canadian companies included
Investment Vehicles Comparison
MODULE 2 · SLIDE 03
ETFs vs Mutual Funds vs Stocks
MODULE 2: SLIDE 3
📈
Individual Stocks
TRADING FEE / COMM.
$0 – $10
Per Trade
  • —
    No Management Fee
  • ✓
    Complete Control
  • ✕
    Requires High Effort
  • ✕
    High Concentration Risk
EXPENSIVE
👥
Mutual Funds
ANNUAL FEE (MER)
2.00% +
Wealth Destroyer!
  • ✓
    Hands-off Investing
  • ✕
    Very High Fees
  • ✕
    Often Underperform Market
  • ✕
    Hidden Costs & Loads
★ BEST CHOICE
📊
ETFs
ANNUAL FEE (MER)
0.05% – 0.25%
Ultra Low Cost
  • ✓
    Instant Diversification
  • ✓
    Extremely Low Fees
  • ✓
    Trades Like a Stock
  • ✓
    Tax Efficient
🏆 The "Sweet Spot"
💡 Key Insight: ETFs offer the diversification of mutual funds with the low costs of stocks.
Building Blocks of Your Portfolio
MODULE 2 · SLIDE 04
Types of ETFs
BUILDING BLOCKS OF YOUR PORTFOLIO
★ CORE PICK
📊
Broad Market
Total market exposure in one click
Examples: VCN, XIU, XIC
💰
Passive Income
Focuses on companies that pay cash to shareholders. Great for retirees.
BEST FOR INCOME
Examples: XDV, VDY, CDZ
🛡
Fixed Income (Bonds)
Safety and stability
Examples: VAB, ZAG, VSB
🌍
US & International
Global growth exposure
Examples: VFV, VIU, XUU
🔬
Sector Specific
Targeted industry bets
Examples: XIT, XEG, HCLN
⚠️
Speculative / Risky
Dangerous for beginners
Leveraged, Inverse, Crypto
Why Fees Destroy Wealth
MODULE 2 · SLIDE 05
🧮 Fee Impact ● Interactive Calculator
Initial Investment $10,000
Time Horizon (Years) 30 Years
Annual Return 7%
ETF Fee: 0.20%
Mutual Fund Fee: 2.00%
TOTAL LOST TO FEES
$28,748
⚠ That's money in the bank's pocket, not yours.
Why ETFs Win: The Math
Compound interest works both ways—fees compound too.
📊 ETF Portfolio 0.2% MER
$71,968
Keep 98% of your returns
👥 Mutual Fund 2.0% MER
$43,219
Loses ~30% of potential gains
$80k $60k $40k $20k $0k Year 0 Year 6 Year 12 Year 18 Year 24 Year 30
*Assumption: Lump sum investment, compounded annually. Past performance does not guarantee future results.
Core Foundation of Your Portfolio
MODULE 2 · SLIDE 06
Best Canadian Broad Market ETFs
CORE FOUNDATION OF YOUR PORTFOLIO
ALTERNATIVE
XIC
iShares Core S&P/TSX Capped Composite Index ETF
MANAGEMENT FEE (MER)
0.06%
Excellent Value
ProviderBlackRock (iShares)
Holdings~240 Companies
ExposureTotal Market (95%)
Dividend Yield~3.1%
Solid alternative to VCN
✓ TOP RECOMMENDATION
VCN
Vanguard FTSE Canada All Cap Index ETF
MANAGEMENT FEE (MER)
0.05%
Lowest Cost
ProviderVanguard Canada
Holdings~180 Companies
ExposureAll Cap (Large+Mid+Small)
Dividend Yield~3.0%
Best balance of cost & coverage
PREMIUM LIQUIDITY
XIU
iShares S&P/TSX 60 Index ETF
MANAGEMENT FEE (MER)
0.18%
Premium Liquidity
ProviderBlackRock (iShares)
Holdings60 Companies
ExposureLarge Cap Only
Dividend Yield~3.2%
Canada's most traded ETF
Income & Growth Strategies
MODULE 2 · SLIDE 07
Best Canadian Dividend ETFs
INCOME & GROWTH STRATEGIES
HIGHEST YIELD
XDV
iShares Canadian Select Dividend Index ETF
MANAGEMENT FEE (MER)
0.50%
Moderate Cost
Dividend Yield~4.5%
Holdings30 Companies
FocusYield-Weighted
Top SectorFinancials (~55%)
👑 TOP PICK
VDY
Vanguard FTSE Canadian High Dividend Yield
MANAGEMENT FEE (MER)
0.21%
Best Value
Dividend Yield~4.2%
Holdings~50 Companies
FocusMarket Cap Weighted
Top SectorFinancials (~58%)
BEST BALANCE: YIELD VS. FEE
DIVIDEND GROWTH
CDZ
iShares S&P/TSX Dividend Aristocrats
MANAGEMENT FEE (MER)
0.65%
Premium Pricing
Dividend Yield~3.8%
Holdings~90 Companies
FocusDividend Growth
Top SectorDiversified
QUALITY & DIVIDEND GROWTH
💡 Smart Investor Tip: Don't chase yield blindly. High fees (MER) reduce your actual take-home income. VDY offers nearly the same income as XDV but charges less than half the fee!
Why U.S. Exposure Matters
MODULE 2 · SLIDE 08
Best U.S. Market ETFs
WHY U.S. EXPOSURE MATTERS
🌐 ~60% of Global Market Cap
🇺🇸
United States
United States — The Global Growth Engine
Dominant Market
10x
SIZE VS CANADA
11.8%
10YR AVG RETURN
Tech
TOP SECTOR
⚙️ Rec. Allocation 35%
For most Canadians, 30–40% of total portfolio should be U.S. Equity
MOST POPULAR
VFV
Vanguard S&P 500 Index ETF
0.08% MER · Top 500 Co's
VUN
Vanguard U.S. Total Market Index ETF
0.16% MER · 3,500+ Co's
ZSP
BMO S&P 500 Index ETF
0.09% MER · S&P 500 Alt
💡 Tax Tip

Buy these in your RRSP if possible to avoid 15% dividend withholding tax. In TFSA, VFV is still great despite the tiny tax drag.

The Safety Net of Your Portfolio
MODULE 2 · SLIDE 09
Bond ETFs & Your Allocation
THE SAFETY NET OF YOUR PORTFOLIO
SELECT YOUR AGE 43 Years Old
CLASSIC RULE (AGE = BONDS)
Conservative
57% Stocks
43% Bonds
Growth (ETFs) Safety (Bonds)
MODERN RULE (AGE – 20 = BONDS)
Recommended
77% Stocks
23% Bonds
*Due to longer lifespans, modern advice suggests holding more stocks longer.
ℹ Bonds reduce volatility. When stocks crash, bonds often stay stable or rise.
Top Canadian Bond ETFs
Lower Risk · Monthly Income
🛡
VABCORE
Vanguard Canadian Aggregate Bond
0.09%
MER FEE
~4.0%
YIELD
⚖️
ZAGCORE
BMO Aggregate Bond Index ETF
0.09%
MER FEE
~4.0%
YIELD
⏳
VSBSHORT-TERM
Vanguard Short-Term Bond Index
0.11%
MER FEE
~4.3%
YIELD
Which one to pick?
VAB/ZAG: Standard choice. Best for long-term holders.
VSB: Less sensitive to interest rates. Better if you might need cash soon.
Simple, Proven 3-ETF Strategies
MODULE 2 · SLIDE 10
Canadian Couch Potato Portfolios
SIMPLE, PROVEN 3-ETF STRATEGIES
Conservative
AGE 40–60 / LOW RISK TOLERANCE
EXP. RTN 5–6%
VCN (Canada)30%
VFV (US/Intl)30%
VAB (Bonds)40%
🛡 Capital Preservation
Balanced
AGE 30–50 / MODERATE RISK
EXP. RTN 6–7%
VCN (Canada)35%
VFV (US/Intl)35%
VAB (Bonds)30%
⚖ Perfect Middle Ground
Growth
AGE 20–40 / HIGH RISK TOLERANCE
EXP. RTN 7–8%
VCN (Canada)40%
VFV (US/Intl)50%
VAB (Bonds)10%
🚀 Maximum Wealth
THE GOLDEN
RULES
💰
Buy & Hold
Time in the market beats timing
🔄
Rebalance Yearly
Reset risk levels once a year
🔇
Ignore Noise
Don't sell during crashes
Changing Strategy Through Life Stages
MODULE 2 · SLIDE 11
Asset Allocation by Age
CHANGING STRATEGY THROUGH LIFE STAGES
🚀
Age 20–35
Aggressive Growth
📈
Age 35–55
Balanced Growth
🛡
Age 55–70
Preservation
🌲
Age 70+
Income Focus
RECOMMENDED SPLIT
90%
10%
Equities (ETFs) — Growth Engines Bonds — Safety Net
Aggressive Growth
BUILDING THE FOUNDATION

In your early years, your biggest asset is time. You can afford market volatility because you have decades to recover. Focus on maximizing growth through broad market equity ETFs. Ignore short-term crashes.

⚠️
THE 5-YEAR GOLDEN RULE
Never invest money in the stock market that you need within 5 years (e.g., house down payment). Short-term volatility is unpredictable. Keep short-term funds in GICs or High-Interest Savings (CASH.TO).
Portfolio Maintenance
MODULE 2 · SLIDE 12
Rebalancing: Keep Your Portfolio on Track
Sell winners, buy losers to maintain your target allocation
📊 REBALANCING EXAMPLE
Target: 60% stocks, 40% bonds
START OF YEAR (Target)
60%
40%
AFTER 1 YEAR (Drift)
66%
34%
AFTER REBALANCE (Reset)
60%
40%
Action: Sell 6% stocks → Buy 6% bonds
BENEFIT OF REBALANCING
+0.5 to 1%
additional annual return from systematic rebalancing
WHEN TO REBALANCE
1️⃣ CALENDAR (Once/Year)
Set a date (e.g., Jan 1) and rebalance regardless of drift. Simplest approach.
SIMPLEST
2️⃣ THRESHOLD (>5% drift)
Rebalance only when any asset class drifts more than 5% from target. More optimal.
OPTIMAL
3️⃣ HYBRID (Quarterly + 5%)
Check quarterly, rebalance only if threshold crossed.
ADVANCED
The Easy Button
MODULE 2 · SLIDE 13
All-in-One ETFs: The Ultimate Simplicity
One ETF. Auto-rebalancing. Done.
VANGUARD ASSET ALLOCATION
V
VEQT
100% Stocks (Age 20–35)
100/0
V
VGRO
80% Stocks / 20% Bonds (Age 30–45)
80/20
V
VBAL
60% Stocks / 40% Bonds (Age 40–60)
60/40
V
VCNS
40% Stocks / 60% Bonds (Age 55–70)
40/60
Alternatives

iShares: XEQT / XGRO / XBAL
BMO: ZEQT / ZGRO / ZBAL
All charge ~0.24% fee

⭐ ULTIMATE SIMPLE STRATEGY
1
Choose one based on your age & risk
2
Buy monthly (automatic)
3
Never sell during crashes
4
Auto-rebalancing done for you
✅ Who This Is Perfect For
  • ✓
    Beginners who want simplicity
  • ✓
    Busy people with no time to manage
  • ✓
    First $50,000 of investing
  • ✓
    Anyone who tends to panic sell
Sample Portfolios by Size & Age
MODULE 2 · SLIDE 14
Building Your ETF Portfolio
Real examples — pick the one that fits you today
Beginner
$5,000 · Age 30
OPTION A: Ultra-Simple
VGRO
100% of portfolio
ALL-IN
OPTION B: DIY 3-ETF
50% VCN$2,500
40% VFV$2,000
10% VAB$500
MOST POPULAR
Intermediate
$25,000 · Age 40
30% VCN$7,500
30% VFV$7,500
20% VDY$5,000
20% VAB$5,000
30%
30%
20%
20%
Dividend Focus
$50,000 · Age 50
25% VDY$12,500
25% VFV$12,500
20% XDV$10,000
30% VAB$15,000
💰 Est. monthly income: ~$167/mo
Tax Optimization
MODULE 2 · SLIDE 15
TFSA vs RRSP Optimization
The right ETF in the right account = thousands saved in taxes
🇨🇦 TFSA
PUT HERE FIRST!
  • ✓
    Canadian dividend ETFs (XDV, VDY)
  • ✓
    Canadian stock ETFs (VCN, XIU)
  • ✓
    All-in-one ETFs (VGRO, VBAL)
Tax-free growth & withdrawals forever!
📈 RRSP
FOR US EXPOSURE
  • ✓
    US stock ETFs (VFV, VUN)
    → Avoids 15% withholding!
  • ✓
    International ETFs
  • ✓
    Bond ETFs
Saves ~$150/yr on $10k US ETF vs TFSA
📊 Taxable Account
LAST PRIORITY
  • ✓
    Canadian stock ETFs only
  • ✕
    Avoid US stocks (double tax)
Only use after maxing TFSA + RRSP
💸
WITHHOLDING TAX EXAMPLE
$10k US ETF in TFSA = Lose $150/year to withholding tax  |  $10k US ETF in RRSP = $0 tax lost (treaty protection)
Advanced: Core-Satellite Strategy
MODULE 2 · SLIDE 16
ADVANCED: Core-Satellite Strategy
⭐ ADVANCED
70–80% passive core + 20–30% active satellites
🎯 CORE (75%)
Broad market ETFs — never sell, provides stability
VCN
Canada broad market
$15k
VFV
US S&P 500
$15k
VAB
Canadian bonds
$7.5k
🛸 SATELLITES (25%)
Individual banks (RBC, TD)
$5k
XIT
Tech sector ETF
$3k
HCLN
Clean energy
$2.5k
VDY
Extra dividend income
$2k
WHY IT WORKS
  • ✓
    Core ensures you never fail badly
    Market returns guaranteed
  • ✓
    Satellites allow skill & conviction
    Express your best ideas
  • ✓
    Risk managed (most in safe core)
    Can't fail catastrophically
75% CORE
Core (75%) — $37,500
Satellites (25%) — $12,500
Example: $50,000 portfolio
Advanced: Tax-Loss Harvesting
MODULE 2 · SLIDE 17
ADVANCED: Tax-Loss Harvesting
⭐⭐ ADVANCED
Sell losers to realize tax losses, immediately swap to similar ETF
HOW IT WORKS
1
Buy XIU at $35, now $30 (down $5)
2
Realize $1,000 loss by selling
3
Immediately buy VCN (similar, not identical)
4
Offset capital gains with loss → Save ~$250 in taxes!
TAX SAVINGS CALCULATOR
Harvested Loss $5,000
ESTIMATED TAX SAVED (~25% rate)
$1,250
🇨🇦 CANADIAN ETF PAIRS (not identical)
CANADIAN MARKET
XIU
↔
VCN
Both track TSX, different indexes
XIC
↔
ZCN
Near-identical but different providers
US MARKET
VFV
↔
ZSP
Both S&P 500 in CAD
VUN
↔
XUU
Total US market
DIVIDEND
XDV
↔
VDY
Both Canadian dividends
⚠️ Superficial Loss Rule

Can't buy the identical security within 30 days before/after sale. Solution: Swap to similar but different ETF. Only works in taxable accounts.

Best of Both Worlds
MODULE 2 · SLIDE 18
Combining ETFs with Individual Dividend Stocks
Use ETFs for the base. Add individual stocks for higher potential.
RECOMMENDED SPLIT BY AGE
Conservative (50+)70% ETFs / 30% Stocks
ETFs 70%
Stocks 30%
Moderate (30–50)60% ETFs / 40% Stocks
ETFs 60%
Stocks 40%
Aggressive (20–30)50% ETFs / 50% Stocks
50%
50%
✅ WHY THIS WORKS
  • ✓
    ETFs provide base diversification
  • ✓
    Stocks provide higher potential returns
  • ✓
    Only 7 positions total (simple!)
SAMPLE $50k PORTFOLIO (Age 40)
ETFs (60% = $30,000)
VGRO
All-in-one growth ETF
$12k
VFV
US S&P 500
$10k
VDY
Canadian dividend
$8k
Individual Stocks (40% = $20,000)
RBC
$5,000
Fortis
$5,000
TD
$5,000
Enbridge
$5,000
Module Summary
MODULE 2 · SLIDE 19
Module 2 Summary: What You've Learned
Check off everything you now understand
CORE CONCEPTS
STRATEGIES & ACTION
🏆
PROGRESS
0 / 14 completed
Your Action Plan
MODULE 2 · SLIDE 20
What Comes Next: Your Action Plan
Commit to your first 5 actions before leaving today
✅ TODAY'S ACTION ITEMS
SET YOUR COMMITMENT DATE
I will make my first ETF purchase by this date
📙 NEXT MODULE
Module 3
Sector & Income ETFs
  • →
    Sector ETFs (XIT, ZEB, XUT)
  • →
    REIT investing in Canada
  • →
    Income-focused portfolio building
  • →
    Buying during market crashes
🎓
Module 2 Complete!
You now have everything needed to build a low-cost, high-performing ETF portfolio
3/4
MODULES DONE
20
SLIDES
🎉
Module 2 Complete!
Great job finishing this module. You’re ready to continue to Module 3: Sector & Income ETFs.