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PWL Capital was founded in 1996, but it is already a huge success story in Canada. In this post, we show you how to replicate the portfolios suggested by PWL Capital. We also give you some background information and, of course, show you how the portfolios have performed. This post only deals with portfolios in the Toronto team.
- PWL Capital, Toronto Edition Canadian Super Powers
- Who is PWL Capital?
- Description of PWL Capital, Toronto Edition Portfolios
- Performance for PWL Capital, Toronto Edition Portfolios
- Building the portfolio(s)
- Asset Allocation for PWL Capital, Toronto Edition Portfolios
- How we select the right ETFs
- Resources for PWL Capital, Toronto Edition Portfolios
- Suggestions for your next steps
PWL Capital, Toronto Edition Canadian Super Powers
Here is how you build one of the PWL Capital investment portfolios
- 54.00% Total US Stock Market
- 19.00% International Developed
- 7.00% Emerging Market
- 20.00% Total Bond Market
You can find many more portfolios further below in the post.
Right out of the gate, you’ll notice that the portfolio does not contain any Canadian stocks.
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 I have swapped Canadian stock allocations to US stocks and I have swapped Candian bonds with US bonds,
In the performance section further below in this post, you can see the US stock portfolios and the Canadian stock portfolio side by side. This is an added benefit.
Who wins, Canadian or US stocks? *Queue drumroll*.
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 only have one gripe with PWL Capital, that’s up next.
Well, and a minor one too.
Description of PWL Capital, Toronto Edition 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 the 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.
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.
The portfolios that are displayed below are from the Toronto office and are meant for a taxable account. They also have portfolios for retirement accounts.
Performance for PWL Capital, Toronto Edition Portfolios
|Name||Asset class count||Year to date||Return in 2019||10 year return||CAGR since 1989 (%)||Risk level||Expense ratio|
|PWL Capital Toronto (CA) 100% Stocks||4||-14.83%||24.87||8.57%||8.76||3||0.03%|
|PWL Capital Toronto (CA) 90% Stocks||6||-14.90%||22.99||8.15%||8.7||3||0.03%|
|PWL Capital Toronto (CA) 80% Stocks||5||-14.82%||21.2||7.79%||8.65||3||0.02%|
|PWL Capital Toronto (CA) 70% Stocks||5||-14.81%||19.41||7.41%||8.54||2||0.02%|
|PWL Capital Toronto (CA) 60% Stocks||5||-14.90%||17.53||6.95%||8.37||2||0.02%|
|PWL Capital Toronto (CA) 50% Stocks||5||-14.78%||15.74||6.54%||8.22||1||0.02%|
|PWL Capital Toronto (CA) 40% Stocks||5||-14.75%||13.94||6.11%||8.01||1||0.01%|
|PWL Capital Toronto (CA) 30% Stocks||5||-14.89%||12.05||5.58%||7.82||1||0.01%|
|PWL Capital Toronto (CA) 20% Stocks||5||-14.57%||10.25||5.13%||7.58||1||0.01%|
|PWL Capital Toronto (US) 100% Stocks||3||-13.53%||27.76||10.78%||9.39||3||0.04%|
|PWL Capital Toronto (US) 90% Stocks||4||-11.74%||25.83||10.11%||9.19||3||0.04%|
|PWL Capital Toronto (US) 80% Stocks||4||-9.87%||23.99||9.50%||9.01||3||0.04%|
|PWL Capital Toronto (US) 70% Stocks||4||-8.09%||22.06||8.80%||8.73||2||0.04%|
|PWL Capital Toronto (US) 60% Stocks||4||-6.30%||20.13||8.09%||8.41||2||0.04%|
|PWL Capital Toronto (US) 50% Stocks||4||-4.44%||18.29||7.45%||8.11||1||0.04%|
|PWL Capital Toronto (US) 40% Stocks||4||-2.65%||16.36||6.71%||7.73||1||0.04%|
|PWL Capital Toronto (US) 30% Stocks||4||-0.86%||14.41||5.94%||7.39||1||0.04%|
|PWL Capital Toronto (US) 20% Stocks||4||1.01%||12.57||5.25%||7.0||1||0.04%|
The US-focused portfolios do slightly better than the Canadian focused portfolios
Building the portfolio(s)
Below you can see the asset allocations for the portfolio(s). You can also see if the portfolio(s) has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio(s) yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.
Asset Allocation for PWL Capital, Toronto Edition Portfolios
The following table shows the asset allocation for the US portfolios and the Candian portfolios.
|Name||Total US Market||International Developed||Emerging Markets||Total US Bond Market||Total Canadian Stocks||Total Canadian Bonds|
|PWL Capital Toronto (CA) 100% Stocks||34.00%||24.00%||9.00%||33.00%|
|PWL Capital Toronto (CA) 90% Stocks||30.00%||22.00%||8.00%||30.00%||10.00%|
|PWL Capital Toronto (CA) 80% Stocks||27.00%||19.00%||7.00%||27.00%||20.00%|
|PWL Capital Toronto (CA) 70% Stocks||24.00%||17.00%||6.00%||23.00%||30.00%|
|PWL Capital Toronto (CA) 60% Stocks||20.00%||15.00%||5.00%||20.00%||40.00%|
|PWL Capital Toronto (CA) 50% Stocks||17.00%||12.00%||4.00%||17.00%||50.00%|
|PWL Capital Toronto (CA) 40% Stocks||14.00%||10.00%||3.00%||13.00%||60.00%|
|PWL Capital Toronto (CA) 30% Stocks||10.00%||7.00%||3.00%||10.00%||70.00%|
|PWL Capital Toronto (CA) 20% Stocks||7.00%||4.00%||2.00%||7.00%||80.00%|
|PWL Capital Toronto (US) 100% Stocks||67.00%||24.00%||9.00%|
|PWL Capital Toronto (US) 90% Stocks||60.00%||22.00%||8.00%||10.00%|
|PWL Capital Toronto (US) 80% Stocks||54.00%||19.00%||7.00%||20.00%|
|PWL Capital Toronto (US) 70% Stocks||47.00%||17.00%||6.00%||30.00%|
|PWL Capital Toronto (US) 60% Stocks||40.00%||15.00%||5.00%||40.00%|
|PWL Capital Toronto (US) 50% Stocks||34.00%||12.00%||4.00%||50.00%|
|PWL Capital Toronto (US) 40% Stocks||27.00%||10.00%||3.00%||60.00%|
|PWL Capital Toronto (US) 30% Stocks||20.00%||7.00%||3.00%||70.00%|
|PWL Capital Toronto (US) 20% Stocks||14.00%||4.00%||2.00%||80.00%|
How we select the right ETFs
There are a lot of ETFs out there. Most of them can be discarded because:
- They are too expensive
- They hold too few assets and are therefore too illiquid
- They do not meet the criteria for representing the asset class they are supposed to mirror.
We have carefully selected an ETF for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?
If you are a European investor you need to buy European ETFs. We list 47 best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).
As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.
You can find the socially responsible investing ESG ETFs in the same article.
Resources for PWL Capital, Toronto Edition Portfolios
PWL Capital’s YouTube channel act as a hub for all the videos the employees put out.
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.
Suggestions for your next steps
Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone
If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful. Rebalancing your portfolio lowers your risk and may even provide higher returns in the long run.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool
The portfolios from PWL Capital Toronto are simple and effective. We have shown both the Candian and US variants.
Are you a Canadian? If so, are you overweight in Canadian stocks?