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

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