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What’s in My RRSP?

Over the years, I’ve disclosed a lot of information about my financial life including:

With the RRSP line item in my net worth updates becoming more significant, I’ve been getting more questions about the contents of my RRSP.

The Strategy

As you may have read before, I treat all of my accounts as one large portfolio, and practice portfolio allocation.  That is, to have a diversified portfolio, but place the equities/bonds in the most tax efficient account.  For the most part,  Canadian equities are placed outside of registered accounts, foreign equities and bonds within the RRSP, and high yielding equities in TFSA’s.

Contents of my RRSP

While the goal of the RRSP is to be completely made up of foreign equities and domestic bonds, it is still a work in progress as it’s transitioning from being a mishmash of positions.  I still have 20% held in CIBC index funds (Canadian, US and a bond fund) that I started investing in years ago, a couple of significant Canadian positions in oil and gas and REITs that I purchased in early 2009, and 8% cash.  Eventually, the REITs will migrate to my TFSA.

Despite holding some Canadian positions, the significant portion of the portfolio is in US dividend stocks and international exposure through the Vanguard ETF VXUS.

The US Dividend stocks include:

  • Abbott Laboratories (ABT)
  • ABBVIE Inc (ABBV – this is an ABT spinoff)
  • Carnival Corp (CCL)
  • Caterpillar (CAT)
  • Coca Cola (KO)
  • Conocophillips (COP)
  • Deere & Co (DE)
  • Exxon Mobile Corp (XOM)
  • Intel Corp (INTC)
  • Johnson and Johnson (JNJ)
  • Mcdonalds Corp (MCD)
  • Microsoft Corp (MSFT)
  • Pepsico (PEP)
  • Procter and Gamble (PG)
  • Visa (V)
  • Yum Brands (YUM)

For those interested in strong US dividend stocks that have a history of  increasing their dividends, but not interested in purchasing individual stocks, Vanguard’s ETF VIG is a good bet.  They have reduced their MER from approximately 0.30% to 0.13% which is great value for this type of dividend ETF.  It’s even better value if you have a discount broker that offers commission free ETFs.

VIG top holdings are:

  1. Procter and Gamble (PG)
  2. Walmart Stores (WMT)
  3. PepsiCo (PEP)
  4. Coca-Cola Co (KO)
  5. Chevron Corp (CVX)
  6. International Business Machines Corp (IBM)
  7. Exxon Mobil Corp (XOM)
  8. McDonald’s Corp (MCD)
  9. United Technologies Corp (UTX)
  10. Abbott Laboratories (ABT)

So there you have it, all the investments that I hold within my RRSP.  If you’re up to it, share what you have in your RRSP along with your strategy.

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FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 28 comments… add one }
  • Michael James March 11, 2013, 10:48 am

    Thanks for the peek into your investments, FT. I found the following part interesting:

    “it is still a work in progress as it’s transitioning from being a mishmash of positions”

    I’ve had a similar experience with making transitions. Investing decisions can seem simple, but things always seem to get complicated and dragged out in the execution. I feel like I finally completed my transition in 2012, but I may not be done yet. I haven’t decided whetehr I’ll hold Berkshire indefinitely, or whether I’ll go entirely over to index ETFs.

  • FrugalTrader FrugalTrader March 11, 2013, 10:58 am

    @Michael, Thanks for your comment. Do you hold your foreign content in your RRSP as well? What ETFs do you hold in there?

  • Michael James March 11, 2013, 12:52 pm

    @FT: I have VXUS and VTI in my (and my wife’s) RRSPs. The Berkshire is in non-registered accounts. Since I don’t hold any bonds or other fixed income, my decisions are a little simpler than yours. I’m reluctant to give too much more detail becaue I’m still thinking about whether my current ETF allocation is what I want long-term. I’d hate to have people follow my lead (despite my pleas for everyone to think for themselves) and have me doing something different.

  • VS March 11, 2013, 3:10 pm

    Hi FT,

    Thanks for the insight. I’ve read that if you’re a high income earner (through employment), it is in fact better to hold all equities inside the RRSP. What’s your take?

    P.S. My first time posting here but I’ve been a follower since a while. I feel like I’m in the “prep” stage to embark on my personal financial freedom journey as well.

    -VS

  • My Own Advisor March 11, 2013, 4:19 pm

    Thanks for the look inside this account!

    Like you, I focus on keeping my CDN equities out of my RRSP. I tend to keep mostly U.S. investments in my RRSP, although I do have one broad-market equity ETF and one REIT in there.

    Regarding the U.S. investments in my RRSP, I’ve slowly moved away from owning individuals stocks in this account and instead, gone the way of indexing. In recent years, I’ve sold my U.S. stocks in favour of VTI since this fund gives me modest yield but also great capital appreciation. Over the last couple of years, VTI has had a great run and my RRSP portfolio shows it.

    I still keep a few U.S. stocks in my RRSP, a couple of them you have already referenced above and some different ones, some of the top holding incidentally of VTI.

    I no longer hold any bonds in my RRSP. I figure my defined pension is like a “big bond’ and as long as I have it, I can focus on U.S. equities.

    The only fear I have with this strategy is U.S. estate taxes down the road. How about you FT, are U.S. estate taxes a longer-term concern for you? If so, how are you going to manage this?

    I need to write a post about that and my approach at some point.

    Cheers,
    Mark

  • LifeInsuranceCanada.com March 11, 2013, 5:30 pm

    That’s probably a good point – how long it takes people to move from what they have over to what they should have.

    Heck, I’ve got a bit of savings in a seggregated fund because of the guarantees. After I ran the numbers though, it became clear to me that the guarantees aren’t worth the additional cost. Still have a nagging feeling about moving the money though. Why is that? Some sort of deep rooted pyschological thing I guess.

  • Jadal March 12, 2013, 12:13 am

    Like you I also treat all of my accounts as one large portfolio and I hope to eventually have nothing but foreign content and perhaps some fixed asset allocation in my RRSP. But that time is still far in the future so for now my RRSP is a big mish mash and looks something like this: BNS, Manulife Financial, Royal, TD, Finning International, Enbridge, Inter Pipeline, TransCanada Corp, Agrium, JPMorgan, Wells Fargo, McDonald’s, Coca Cola, Johnson & Johnson, GE, Apple, Exxon Mobil, VTI, a big helping of VXUS, short term corporate bond fund and a broader based bond fund.

    There are a few other individual US stocks I would like to add to the pile but I will continue to add to VTI as well. I think that VXUS will take care of all of my non-North American content. Eventually I plan to move the Canadian content to non-registered accounts but I still have a lot of catch up room in the RRSP before then.

  • FrugalTrader FrugalTrader March 12, 2013, 11:47 am

    @Michael_James, thanks for the response!

    @Mark – I’ve never considered US estate taxes, are you sure that US stocks held in an RRSP will face US estate tax? My understanding is that Canadians will not face US estate tax on those holdings.

    @lifeinsurancecanada – It’s a long process, but hopefully it pays off!

  • FrugalTrader FrugalTrader March 12, 2013, 11:48 am

    @Mark, this article appears to agree that there is no US estate tax on US holdings within an RRSP:

    http://www.hodgsonruss.com/Home/News_Seminars/Articles_and_Alerts/2010ArticlesAlerts/RRSPAssetsNoUSEstateTax

  • PeaceMaker March 12, 2013, 10:08 pm

    I moved away from mutual funds few years ago and I invest primarily in individual stocks across different sectors in my RRSP. My only mutual fund is Fidelity Blue chip value which I picked for low admin costs.

    Like you, I have Abbott, Intel, Visa and Coca Cola. My other holdings are Banking :BMO, Citigroup, Wells Fargo,
    Energy: Chesapeake Energy, Petrobas
    Technology: Cisco, Groupon, NetApp, EMC, Blackberry and VMware
    Industrials: Alcoa
    Staples: Diamond Foods

  • Andrew March 13, 2013, 7:29 am

    Can anyone tell me if it’s preferential (tax-wise) to contribute directly to my employer’s group RRSP compared to contributing from after-tax accounts to my own RRSPs?

    Thanks

  • My Own Advisor March 13, 2013, 8:34 am

    Great to hear, no US estate taxes on US holdings in an RRSP. For some reason, I thought this applied???

    Phew – thanks!

  • FT March 13, 2013, 9:01 am

    @Andrew, the benefit of the group plan is that employers generally match your contribution up to a certain limit. Basically free money!

  • Andrew March 13, 2013, 3:16 pm

    Thanks, FT.

    I see these benefits:
    -Employer contribution (up to x%)
    -Tax relief is at moment of contribution, not tax time

    And these problems;
    -Locked into group plan of employer choosing. Generally choice of high MER mutual funds or very low interest GICs.

    Am I missing anything else?
    It looks like I’m better off contributing up to the amount that will be matched, and then taking care of the rest myself.

  • FrugalTrader FrugalTrader March 13, 2013, 3:19 pm

    I’ve actually found that if you choose index funds the MERs are reasonable (~1%). I’m with you, I would take all the free money, then invest the rest elsewhere (providing you have the contribution room).

  • Andrew March 13, 2013, 10:32 pm

    Thanks for the help.
    Glad to see Million Dollar Journey going strong after all these years.

  • Norman March 13, 2013, 11:25 pm

    Mutual funds holding us stocks are not subject to us estate taxes. However, owning us stocks including etfs are subject to us estate taxes.
    But due to the latest signing by Obama, you would need assets of 5 million. I doubt many of us have that problem

  • indigo March 14, 2013, 3:07 am

    Could you explain how to get started for someone who has RRSPs that need to be reinvested? How do I go about this?

    • FrugalTrader FrugalTrader March 14, 2013, 10:05 am

      @indigo, can you provide more detail? What do you mean that you have RRSPs that need to be reinvested?

  • Sampson March 14, 2013, 5:41 pm

    Wow, finally, after 5+ years.

    I guess it has to do with the transitioning and use of different products. That being said, I suppose we could have inferred based on what you post about your leveraged portfolio – interesting you don’t hold bonds. Is this because of your pensions?

  • FrugalTrader FrugalTrader March 14, 2013, 7:24 pm

    @Sampson, it takes me a while to warm up. :) I do have some bonds in my CIBC index funds, and a couple thousand in a short term bond ETF. I also have some more short term bonds in my TFSA. Is your RRSP indexed?

  • Sampson March 14, 2013, 11:41 pm

    Wife’s is, 100%, except her company stock, so 85%.

    Mine is loaded with US stocks, and possibly some mid-cap indexes, but it is bursting out the seems. I don’t have much room (DB pension) so US equities are spilling out into non-reg accounts.

    I wonder if you have ever posted the total breakdown, asset allocations of all your accounts?

  • FrugalTrader FrugalTrader March 17, 2013, 7:29 pm

    Sampson, there you go again creating more work for me. I’ll put something together. :)

  • Minguione March 19, 2013, 6:12 pm

    Hi Frugal trader,

    I understand the tax efficiency of your RRSP, but as with my RRSP, you are exposed to FX (USD) variations. How do you hedge (if at all) this exposure?

    • FrugalTrader FrugalTrader September 3, 2014, 10:24 am

      @Minguione, I do not hedge my FX exposure because it is known to put a drag on returns. I also have my RRSP with CIBC who do not charge the FX surcharge.

  • Sampson March 20, 2013, 1:17 am

    Just trying to understand how the decisions are made ;) and you need more post topics anyway right? Just curious where you put the most importance into.

    We start with super broad categories – equities, bonds, reits, cash. My wife’s portfolio is 100% indexed (except company stock, and a few killer deals during 2009-2010).

    Then portfolios get sliced and diced, so equities and bonds are classified by region, soon reits hopefully.

    Lastly, holdings under my own name get further sub-classified by economic sector. Lots of work, but I like to measure and look at numbers anyway.

  • KW September 3, 2014, 3:09 am

    Hey there, could you explain why you choose to invest in only US stocks and funds in your RRSP? Similarly, why are Canadian equities outside of registered accounts, and high yield equities in your TSFA only?

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