Should I Sell My Stocks for XEQT? Complete Guide for Canadian Investors

If you’re holding individual stocks and wondering whether to sell them for XEQT, you’re asking the right question. Many Canadian investors are making this switch, but it’s not a decision to take lightly. Let’s break down when it makes sense and when it doesn’t.

What is XEQT and Why Are People Switching?

XEQT (iShares Core Equity ETF Portfolio) is an all-in-one ETF that gives you instant global diversification in a single investment. Instead of managing 10, 20, or 50 individual stocks, you get exposure to thousands of companies worldwide.

Why Investors Are Making the Switch:

Simplified portfolio management
Automatic rebalancing
Lower risk through diversification
Time savings (no more stock research)
Emotional benefits (less stress during market volatility)

When You SHOULD Consider Selling Stocks for XEQT

✅ You’re Overwhelmed by Your Portfolio

Managing 20+ individual stocks takes significant time
You’re constantly checking stock prices and news
Portfolio rebalancing feels like a part-time job
You’re making emotional decisions based on market noise

✅ Your Portfolio Lacks Diversification

Too much exposure to one sector (e.g., 40% in tech)
Heavy concentration in Canadian stocks only
Missing international exposure
No emerging markets representation

✅ You’re Paying High Fees

Individual stock trading fees adding up
Multiple account maintenance fees
High MER mutual funds in your portfolio
Wealthsimple offers zero-commission trading on XEQT

✅ You Want to Simplify Your Life

Focus on your career and family instead of stock picking
Enjoy your weekends without market research
Sleep better during market downturns
Set up automatic investing and forget about it

When You SHOULD NOT Sell Stocks for XEQT

❌ You Have Significant Unrealized Gains

Large capital gains could trigger substantial tax bills
Consider spreading sales over multiple years
Consult with a tax professional first

❌ You’re Close to Retirement

Individual stocks might provide needed income
XEQT is 100% equities (higher volatility)
Consider XGRO or XBAL for more conservative allocation

❌ You’re an Experienced Stock Picker

If you consistently beat the market
You enjoy the research and analysis
You have a proven strategy that works

❌ You Need the Money Soon

XEQT is for long-term investing (5+ years)
Short-term needs require more liquid investments
Consider your emergency fund first

How to Evaluate Your Current Portfolio

Step 1: Calculate Your Current Diversification

Sector breakdown: Are you overexposed to one area?
Geographic exposure: How much is Canada vs. international?
Company size: Mix of large, mid, and small-cap stocks?
Individual stock weights: Any single stock over 5% of portfolio?

Step 2: Assess Your Investment Goals

Time horizon: How long until you need the money?
Risk tolerance: Can you handle 100% equity exposure?
Income needs: Do you need dividends now or growth later?
Tax situation: What are your capital gains implications?

Step 3: Compare Costs

Current trading fees vs. XEQT’s 0.20% MER
Account maintenance fees vs. free Wealthsimple accounts
Time spent managing vs. set-and-forget approach

Tax Implications of Selling Stocks for XEQT

Capital Gains Tax Considerations

50% of gains are taxable at your marginal rate
Tax-loss harvesting opportunities before switching
Consider spreading sales over multiple tax years
TFSA and RRSP accounts have no capital gains tax

Tax-Efficient Switching Strategies

Start with new money - Buy XEQT with fresh contributions
Gradual transition - Sell 20% of stocks each year
Use tax-advantaged accounts - Switch within TFSA/RRSP first
Offset gains with losses - Sell losing positions first

Step-by-Step Process to Switch to XEQT

Phase 1: Preparation (Month 1-2)

Open a Wealthsimple account (get $25 free with my referral link)
Research your current holdings and calculate gains/losses
Consult with a tax professional if needed
Set up automatic contributions to XEQT

Phase 2: Gradual Transition (Month 3-12)

Start buying XEQT with new money
Sell individual stocks with losses first
Gradually reduce positions in overvalued stocks
Monitor your portfolio’s transition

Phase 3: Completion (Year 2+)

Complete the transition to XEQT
Set up automatic rebalancing
Enjoy your simplified, diversified portfolio

Wealthsimple: The Perfect Platform for XEQT

🎁 Get $25 free when you open your Wealthsimple account

Why Wealthsimple is Ideal for XEQT:

Zero commission trading on XEQT purchases
Fractional shares - buy any amount you want
Automatic investing - set up recurring purchases
Canadian-focused platform with excellent mobile app
No account fees for basic accounts

Real-Life Example: Sarah’s Portfolio Switch

Before (Individual Stocks):

15 individual stocks worth $50,000
60% Canadian, 40% US exposure
Spending 5+ hours weekly on research
$200+ in annual trading fees
High stress during market volatility

After (XEQT Portfolio):

100% XEQT worth $50,000
Global diversification (Canada, US, International, Emerging)
0 hours weekly on research
$0 in trading fees
Peace of mind and better sleep

Result: Sarah saved time, reduced stress, and improved her portfolio’s diversification while eliminating fees.

Common Concerns About Switching to XEQT

“What if XEQT underperforms my stocks?”

Historical data shows most individual investors underperform the market
XEQT tracks global markets - you’re betting on capitalism, not individual companies
Diversification reduces risk of catastrophic losses

“I’ll lose control over my investments”

You gain control over your time and emotions
XEQT automatically rebalances to maintain optimal allocation
You can still adjust your overall asset allocation

“What about dividends?”

XEQT pays quarterly dividends (currently around 2% yield)
Dividends are automatically reinvested for compound growth
More consistent income than individual stocks

Alternatives to Consider

Partial Switch

Keep your best-performing stocks
Use XEQT for the rest of your portfolio
Gradually increase XEQT allocation over time

Hybrid Approach

70% XEQT for core diversification
30% individual stocks for active management
Best of both worlds

Other ETFs

XGRO (80% stocks, 20% bonds) for less volatility
XBAL (60% stocks, 40% bonds) for conservative approach
VFV (S&P 500) if you want US-only exposure

Final Verdict: Should You Switch?

YES, switch to XEQT if:

You’re spending too much time managing individual stocks
Your portfolio lacks proper diversification
You want to simplify your financial life
You’re paying high fees for active management
You want to focus on what matters most in life

NO, keep your stocks if:

You have significant unrealized gains (consult tax professional)
You’re an experienced, successful stock picker
You need the money within 2-3 years
You enjoy the research and analysis process

Ready to Simplify Your Portfolio?

🎁 Start your XEQT journey with Wealthsimple and get $25 free

Whether you decide to switch completely or gradually transition, XEQT offers Canadian investors a simple, cost-effective way to achieve global diversification. The key is making the decision that aligns with your goals, timeline, and lifestyle preferences.

Disclosure: This post contains referral links. I may receive compensation if you sign up through these links, but this doesn’t affect my honest assessment. XEQT and Wealthsimple are genuinely excellent options for Canadian investors looking to simplify their portfolios.