How To Invest Like The Government
I’m really not sure if anyone in government knows exactly what they are doing, but following these guidelines can help you to invest like the Canadian Government.
Another option, if you really didn’t like my retirement income portfolio, is to invest like the Canadian Pension Plan (CPP).
The Canada Pension Plan has recorded nearly a 10% annual rate of return over the past several years.
Here is how the Pension plan portfolio breaks down and how you can invest just like the government using simple ETF’s!
Canadian stocks
CPP weighting: 25.1 per cent
ETF: iShares Cdn Composite Index Fund
Global stocks
CPP weighting: 35.3 per cent
ETF: iShares MSCI EAFE Index Fund.
Conventional bonds
CPP weighting: 22.6 per cent
ETF: iShares Cdn Bond Index Fund
Inflation-linked bonds
CPP weighting: 3.5 per cent
ETF: iShares Cdn Real Return Bond Index Fund
Private equity
CPP weighting: 6.4 per cent
ETF: PowerShares Listed Private Equity Portfolio
Real Estate
CPP weighting: 4.5 per cent
ETFs: SPDR DJ Wilshire International Real Estate ETF and DJ Wilshire REIT ETF (For United States Exposure)
Infrastructure
CPP weighting: 1.9 per cent
ETF: SPDR FTSE/Macquarie Global Infrastructure 100 ETF
Cash
CPP weighting: 0.7 per cent
ETF:Use a money market fund with a low MER.
This sample portfolio simplifies the procedure of investing like the Canada Pension Plan. All in all it is a relatively conservative portfolio that has a fairly sound track record.
Percentages Via: Globe and Mail
