PWL Capital, Passmore & Felix Team Portfolios

PWL Capital Passmore and felix portfolios

The PWL Capital Passmore & Felix Team portfolios can be built with 3-6 ETFs. They are exposed to between 40% and 100% equities. They have low-risk portfolios and high-risk portfolios. They use DFA funds.

For the past 10 years, the PWL Capital Passmore & Felix Team 70/30 has returned 7.49% with a standard deviation of 11.24%. The dividend yield is 2.37%. The 30-year return is 7.62%. Year to date the PWL Capital Passmore & Felix Team 70/30 Portfolio has returned 0.36%.

What are the PWL Capital portfolios?

The PWL Capital portfolios are a series of investment portfolios made by PWL Capital of Canada. There are four sets of portfolios. The portfolios overweight Canadian stocks and bonds.

How do you build the PWL Capital portfolios?

So, how do you build one of the PWL Capital Passmore & Felix Team portfolios?

This is the asset allocation and ETFs you use for the 70/30 portfolio.

  • 47.10% Total US Stock Market (VTI)
  • 19.70% International (VEU)
  • 19.7% Global Bond Market (BNDW)
  • 10.60% Five Year Global Bonds (BNDW)
  • 2.90% Global REITs (VNQI)

You can find many more portfolios further below in the post. There you will also find the right ETFs that you want to use to build the portfolio.

Please note that PWL Capital uses other funds and ETFs to achieve the same exposure.

What is the return of the PWL Capital Passmore and Felix portfolios?

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
PWL Capital Passmore & Felix (CA), 40/6062.4315.165.69%6.310.05%
PWL Capital Passmore & Felix (CA), 50/5061.7816.796.31%6.7910.05%
PWL Capital Passmore & Felix (CA), 60/4061.0718.56.93%7.2420.04%
PWL Capital Passmore & Felix (CA), 70/3060.3620.177.49%7.6220.04%
PWL Capital Passmore & Felix (CA), 80/206-0.3321.878.05%7.9530.04%
PWL Capital Passmore & Felix (CA), 100/04-1.7125.329.09%8.4230.03%
PWL Capital Passmore & Felix (US), 40/6053.616.256.53%6.5710.05%
PWL Capital Passmore & Felix (US), 50/5053.2518.167.36%7.1210.05%
PWL Capital Passmore & Felix (US), 60/4052.8320.158.19%7.6320.05%
PWL Capital Passmore & Felix (US), 70/3052.4222.098.96%8.0720.05%
PWL Capital Passmore & Felix (US), 80/2052.0324.079.73%8.4530.04%
PWL Capital Passmore & Felix (US), 100/031.2428.0711.18%9.0130.04%

Who is PWL Capital?

PWL Capital was founded in 1996. It is a wealth management and financial planning firm. In 2020 they have four offices in Canada shared among their six teams.

I have known about PWL Capital for quite some time as they tend to spread their knowledge around. They have a podcast, and many of their employees do solo educational things on the side that has to do with financial planning or investing. See the resource section below to catch some links.

In that regard, they share a commonality with Ritholz Wealth management. Many of the employees at Ritzholz also do things on the side, be it blog authors, book authors, etc.

I like that approach as you can’t fake real interest and passion, so I don’t see the side hustles as marketing even though it serves that purpose. Wouldn’t you work with someone who loves what they do rather than somebody who just considers working with you their job?

you can’t really fake real interest and passion

I also like their no-nonsense attitude. Right there on their front page, it states:

Integrated Financial Planning and Asset Management.
No fads. No guesswork. No drama.

I’m sold!

I only have one gripe with PWL Capital, that’s up next.

Well, and a minor one too.

Description of PWL Capital Passmore and Felix portfolios

PWL Capital has a lot of investment portfolios. Each team at PWL Capital has its own set of investment portfolios. I’m not entirely sure of the organizational structure of PWL Capital, but this makes sense for PWL Capital.

From an outsider looking in, it makes no sense, however. Sure there are all sorts of reasons why you want to have 30+ different investment portfolios, but not really. I don’t see the advantage of letting all the different teams decide on their own portfolios allocations. It just adds a lot of overhead. But I’m missing something, of course, PWL Capital, is, after all, is a huge success story. That is not meant as a snide comment, but the fact that I do not see the whole picture.

A minor gripe would be the naming convention of PWL Capital portfolios. In other teams at PWL Capital, they call their portfolios some rather vacuous nonsensical names like assertive, cautious and conservative, to indicate risk levels of the portfolios. I like Ritholz’ approach better. Barry Ritholz admitted that you almost always end up with dumb names for your portfolios, so at Ritholz, they just named the portfolios according to space and astrophysical themes like Saturn and Voyager. At least this removes the ambiguity. (And who doesn’t like space?)

What’s the difference between cautious and conservative in investing, anyway?

There is one thing that all of the PWL Capital Portfolios share, and that is simplicity.

They rarely use exotic asset classes. Instead, they are class light and favor broad asset classes. Although there are a few exceptions where the actual fund selection is quite puzzling. I’ll talk about that in a later post when I go through the portfolios of the other teams at PWL Capital.

Which funds and ETFs do PWL Capital Passmore and Felix use?

The Passmore and Felix portfolios use only Dimensional Fund Advisor funds to build their portfolios.

The PWL portfolios’ exposure to US stocks and International stocks is tilted towards value and small because they use include the Core funds from DFA. The Core fund from DFA tilts slightly towards small and value stocks.

The Passmore and Felix portfolios also include DFA’s Vector funds which are smart-beta funds. The funds are tilted towards small, value and quality.

You can read more on how DFA try to capture more of risk premia in our article on DFA model portfolios.

DFA Funds have higher expenses than ETFs.

There are a few things to note on Passmore and Felix’ portfolios.

The first thing is that they use 4 funds to allocated to one asset class.
Fx for their US stock allocation they use four DFA funds:

  1. DFA US Core Equity
  2. DFA US Core Equity (Hedged)
  3. DFA US Vector Equity
  4. DFA US Vector Equity (Hedged)

We don’t normally see both hedged and unhedged positions in one portfolio. Hedging costs money which hurts returns but minimizes currency risk. In these portfolios, half of the allocation is hedged while the other half is unhedged so you really get the worst of both worlds. Your returns suffer and you take on currency risk.

In our benchmarking, we have not used small or value or smart-beta funds to replicate the smart-beta allocations of the PWL Capital. In the past 10-15 years, value has underperformed growth. Because of this, our benchmark probably overstates the performance you would have seen if you had held these portfolios. We also don’t use hedged ETFs or take hedging costs into account. The return differences are illustrated if you go to the PWL Capital website and see what returns you would have gotten. Our benchmarked returns are significantly higher

There are six passmore and Felix portfolios. They vary in risk level, starting at 40% bonds and 60% stocks up to 100% stocks.

As usual we have benchmarked a Canadian and US versions of the portfolios.

How do you build the PWL Capital Passmore and Felix Portfolios?

The following table shows the asset allocation for the US portfolios and the Candian portfolios.

NameTotal US MarketInternational DevelopedGlobal BondsFive Year Global BondsTotal Canadian StocksGlobal REITs
PWL Capital Passmore & Felix (CA), 40/6014.50%11.40%30.00%29.90%12.50%1.70%
PWL Capital Passmore & Felix (CA), 50/5018.00%14.00%27.80%22.50%15.70%2.00%
PWL Capital Passmore & Felix (CA), 60/4021.70%16.80%24.20%16.00%18.80%2.50%
PWL Capital Passmore & Felix (CA), 70/3025.10%19.70%19.70%10.60%22.00%2.90%
PWL Capital Passmore & Felix (CA), 80/2028.80%22.50%14.30%6.00%25.10%3.30%
PWL Capital Passmore & Felix (CA), 100/036.20%28.30%31.50%4.00%
PWL Capital Passmore & Felix (US), 40/6027.00%11.40%30.00%29.90%1.70%
PWL Capital Passmore & Felix (US), 50/5033.70%14.00%27.80%22.50%2.00%
PWL Capital Passmore & Felix (US), 60/4040.50%16.80%24.20%16.00%2.50%
PWL Capital Passmore & Felix (US), 70/3047.10%19.70%19.70%10.60%2.90%
PWL Capital Passmore & Felix (US), 80/2053.90%22.50%14.30%6.00%3.30%
PWL Capital Passmore & Felix (US), 100/067.70%28.30%4.00%

PWL Capital’s portfolios do contain allocations to Canadian stocks. They overweight Canadian stocks quite a bit. That’s a general trend that I have noticed with Canadian wealth managers and Canadian investing experts. They overweight quite massively Canadian stocks. This makes me conclude that Canadians have a considerable home country bias. But who can blame them? Canada is beautiful! And Canada has one of my favorite companies in the world, Brookfield Asset Management.

For the portfolios to be useful to the rest of the world and the US, in particular, I have made US counterpart portfolios from PWL Capital’s Canada heavy portfolios.

It means that we have swapped Canadian stock allocations to US stocks and we have swapped Candian bonds with US bonds.

Notice there are two sets of portfolios. One is Canadian and the other is the US. PWL capital uses the Canadian variant. The US variant is our guess on how PWL Capital’s portfolios would look like if a client were based in the US.

Resources for PWL Capital Passmore and Felix

PWL Capital’s YouTube channel act as a hub for all the videos the employees put out.

Here is an excellent interview that Benjamin Felix and Cameron Passmore did with Barry Ritholtz from Ritholz Wealth management. I could listen to Barry Ritzholz all day.

Benjamin Felix and Cameron Passmore from PWL Capital hosts the Rational Reminder podcast. It is excellent, and they have some interesting guests.

PWL Capital has a research section on their site where they try to make sense of the investing world. It’s not overly original research they do, and it is one area where they could shine if they put a little more effort into it.

Canada Couch Potato is made by Dan Bortolotti, portfolio manager at PWL Capital.

Canadian Portfolio Manager is a site made by Justin Bender of PWL Capital.

You can find the other portfolios from PWL Capital that we have covered:

Related questions

What is common sense investing?
Common sense investing the Ben Felix’s YouTube channel where he talks about investing.

What is the management fee of PWL Capital
There are a few sources citing that PWL Charge 0.75% plus product fees.

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