What Percentage of Your Portfolio Should Be XEQT? A Sizing Guide for Canadians

Is 100% XEQT too much? Is 50% not enough? If you have ever stared at your brokerage account wondering how much of your money should actually go into XEQT, you are not alone. It is one of the most common questions I get from readers, and the answer is more nuanced – and more personal – than most people expect.

XEQT is already one of the most diversified single investments you can buy – over 9,000 stocks across 49 countries, automatically rebalanced by BlackRock, for just 0.20% per year. So the question is not “is XEQT good enough?” – it is “how much of my portfolio does it make sense to allocate here, given my specific situation?”

I have spent years thinking about this for my own portfolio. I have gone from 100% XEQT to a core-satellite approach and back again. I have talked to dozens of readers about their allocations. And I have landed on a framework that works for most Canadian investors.

1. The Case for 100% XEQT

Let me start with the simplest answer: for many Canadians, putting 100% of your portfolio into XEQT is not just acceptable – it is optimal.

I know that sounds extreme. We have been conditioned to think that a “real” portfolio needs multiple holdings, some bonds, maybe a REIT or two, and a handful of individual stocks for good measure. But that thinking confuses activity with strategy.

Here is why 100% XEQT works for a lot of people:

• You are already diversified. XEQT holds four underlying ETFs covering Canadian, U.S., international developed, and emerging market equities. That is roughly 9,000+ companies across every sector and geography that matters. Adding more holdings often just creates overlap, not diversification.
• Simplicity is an edge. The fewer decisions you make, the fewer mistakes you make. Every additional holding in your portfolio is another thing to research, monitor, rebalance, and potentially panic about during a downturn.
• It is 100% equities by design. If you are young, have a long time horizon, and can stomach volatility, you do not need bonds dragging down your expected returns. XEQT gives you full equity exposure without the temptation to tinker.
• Dollar-cost averaging becomes effortless. One ETF means one buy order per contribution. No allocation math. No rebalancing spreadsheets. Just buy more XEQT and move on with your life.

When I first started investing, I held about 15 different positions – Canadian bank stocks, U.S. tech names, a bond ETF, a dividend ETF, and a couple of speculative plays. I spent hours each month rebalancing and second-guessing. My returns were average. My stress was above average.

Switching to 100% XEQT was the single best investment decision I ever made – not because my returns skyrocketed, but because I stopped making the small, emotional mistakes that were costing me 1-2% per year.

Bottom line: If you are in your 20s or 30s, investing in a TFSA or RRSP, with a 15+ year time horizon, and you have no interest in picking stocks – 100% XEQT is a perfectly rational, evidence-based portfolio. Do not let anyone tell you it is “too simple.”

2. When 100% XEQT Might Be Too Aggressive

That said, 100% XEQT is not the right call for everyone. There are legitimate reasons to hold less than 100%, and none of them have to do with XEQT being a bad investment.

You should consider a lower XEQT allocation if:

• You are within 10 years of retirement. XEQT is 100% equities, which means it can drop 30-40% in a bad year. If you are approaching retirement, that kind of drawdown can permanently damage your plan. Sequence of returns risk is real, and it punishes retirees who are too aggressive.
• You have a low risk tolerance. This is not a character flaw. Some people genuinely cannot sleep at night knowing their portfolio could be down 30% tomorrow. If a market crash would cause you to panic sell, a 100% equity allocation is actually more risky for you than a balanced portfolio – because the real risk is your own behaviour.
• You need the money within 5 years. Saving for a house down payment? Planning a big move? XEQT’s volatility is fine over 15 years, but it can be brutal over 3. Short-term money should be in something more stable.
• You are already retired and drawing down. Once you are withdrawing from your portfolio, you need a different strategy. Selling XEQT shares during a downturn locks in losses and accelerates portfolio depletion.

The point is not that XEQT is dangerous. It is that 100% equities is a tool, and like any tool, it works best when matched to the job.

3. Common XEQT Allocation Models

Now let us get practical. Here are four allocation models I see most often among Canadian investors, along with who each one suits best.

Let me break each one down.

All-In XEQT (100%)

This is the “set it and forget it” portfolio. You buy XEQT, set up automatic contributions, and check your account once or twice a year. It is the approach I recommend most often to beginners and younger investors.

Pros:

• Maximum simplicity
• Highest expected long-term returns (no bond drag)
• Zero rebalancing required
• Easiest to stick with during downturns (nothing to second-guess)

Cons:

• Can drop 30-40% in a bad year
• No fixed income cushion during crashes
• Psychologically difficult for risk-averse investors

Growth with a Cushion (80% XEQT + 20% Bonds)

This is for investors who want mostly equity growth but also want to sleep a little better at night. The 20% bond allocation reduces your maximum drawdown without dramatically hurting long-term returns.

You can achieve this by holding 80% XEQT alongside a bond ETF like ZAG (BMO Aggregate Bond Index ETF) or by replacing some XEQT with XGRO (which is roughly 80% equities, 20% bonds already built in).

Pros:

• Smoother ride during downturns
• Still captures most of the equity upside
• Small rebalancing effort (once or twice a year)

Cons:

• Slightly lower expected long-term returns
• Requires manual rebalancing if using separate ETFs
• Bonds may underperform in rising rate environments

Balanced Approach (60% XEQT + 40% Fixed Income)

A more conservative allocation suited for investors closer to retirement or those with a lower risk tolerance. The 40% fixed income component could include bond ETFs, GICs, or a high-interest savings account ETF. You get significantly reduced volatility and better crash protection, but at the cost of meaningfully lower expected long-term returns.

Core + Satellite (80% XEQT + 20% Individual Picks)

I wrote an entire post about this approach because it is the one I personally use. The idea is simple: XEQT is your wealth engine (the core), and you use a small allocation for individual stocks or sector ETFs that interest you (the satellite).

Pros:

• Scratches the stock-picking itch
• XEQT core protects you even if your picks fail
• Can be educational and engaging
• Potential (though unlikely) to add alpha

Cons:

• Requires research and monitoring for satellite positions
• Risk of satellite allocation creeping upward
• Most investors underperform the index with their picks

My take: If you are someone who will inevitably get bored with a single ETF and start making impulsive trades, the core-satellite model is actually safer than pretending you will be 100% XEQT forever. It gives the itch a controlled outlet.

4. How Portfolio Size Affects the Decision

Here is something that does not get talked about enough: the size of your portfolio should influence how you structure it.

Small portfolios (under $50,000): Keep it simple. The difference between 80% XEQT and 100% XEQT on a $20,000 portfolio is $4,000 in bonds – that is not going to meaningfully change your risk profile. At this stage, your biggest lever is how much you contribute, not how you allocate. 100% XEQT is almost always the right call.

Medium portfolios ($50,000 - $250,000): Allocation starts to matter more here. A 30% drawdown on $200,000 is $60,000 – that is real money, and it feels like real money. If you are going to add bonds or other holdings, this is a reasonable stage to start.

Large portfolios ($250,000+): Tax efficiency, account placement, and asset allocation nuances become genuinely important. A 1% difference in returns on $500,000 is $5,000 per year. Consider optimizing which accounts hold which assets, and potentially getting a one-time review from a fee-only financial planner.

That said, even at $1,000,000, a 100% XEQT portfolio is perfectly valid if you have a long time horizon. Portfolio size alone does not dictate complexity.

5. The Account Type Factor

Where you hold XEQT matters just as much as how much you hold. Different account types have different tax treatments, which should influence your allocation decisions.

TFSA: Go Aggressive

Your TFSA is the best place for maximum growth because all gains are completely tax-free. Whether XEQT doubles or triples in value, you will never owe a penny in capital gains tax on withdrawals.

Recommendation: This is where 100% XEQT makes the most sense. You want your highest-growth assets in your most tax-advantaged account. Do not waste TFSA room on bonds or GICs – those belong elsewhere.

RRSP: Depends on Your Timeline

Your RRSP gives you a tax deduction now but taxes withdrawals as income later. The best allocation depends on how far you are from retirement.

• 20+ years out: 100% XEQT is great. You have time for compounding and recovery.
• 10-20 years out: Consider starting to introduce bonds (80/20 or 90/10).
• Under 10 years: Begin your glide path toward a more balanced allocation.

One advantage of holding XEQT in an RRSP is that it avoids the U.S. withholding tax on dividends from the underlying U.S. ETF holdings (thanks to the Canada-U.S. tax treaty). This makes your RRSP slightly more efficient for XEQT than your TFSA on a pure tax basis – though the TFSA’s tax-free growth usually more than makes up for it.

Non-Registered Account: Tax Efficiency Matters

In a taxable account, you need to think about the tax implications of dividends and capital gains. XEQT distributes dividends quarterly, and those are taxable in a non-registered account.

Recommendations for non-registered accounts:

• XEQT is still a solid choice, but be mindful of the tax drag from distributions
• Consider tax-loss harvesting strategies
• If you are in a high tax bracket, you might prefer holding XEQT in registered accounts and using more tax-efficient investments (like individual stocks with no dividends) in non-registered

6. Age-Based Guidelines for XEQT Allocation

I am generally cautious about age-based investing rules. The old “your bond percentage should equal your age” formula is overly simplistic and often too conservative for modern investors. But age is a useful proxy for time horizon, and time horizon is the single biggest factor in determining your XEQT allocation.

Here is how I think about it:

In your 20s, your biggest priority is not allocation – it is contribution. Even $200/month into XEQT at age 22 can grow to over $500,000 by retirement, assuming 8% average annual returns. At this age, bonds are almost certainly a drag on your long-term returns.

In your 30s, keep your long-term portfolio aggressive. If you are saving for a house down payment, keep that money separate in a HISA or GICs – do not reduce your XEQT allocation for short-term goals.

In your 40s, start thinking about your glide path strategy. Most investors can stay at 100% XEQT through their 40s, but if you are particularly risk-averse, a 10-20% bond allocation is reasonable.

In your 50s and beyond, the glide path becomes essential. Gradually shift from equities toward a balanced portfolio over a 10-15 year period. Do not go too conservative too early – you still need growth to fund a 25-30 year retirement.

7. Thinking About XEQT Across Multiple Accounts

Here is where things get a little more sophisticated. If you have money in a TFSA, an RRSP, and a non-registered account, how should you think about your XEQT allocation – per account or across your total portfolio?

The answer: always think about your total portfolio.

This is a mistake I see constantly. Someone will have 100% XEQT in their TFSA, 100% XEQT in their RRSP, and then 100% bonds in their non-registered account because “they want to be safe with the taxable money.” They think they are diversified, but their total portfolio is actually something like 75% equities and 25% bonds – which might be more conservative than they intended.

How to do it right:

1. Add up everything. Your TFSA, RRSP, spousal RRSP, non-registered accounts, even your employer pension if applicable. This is your total portfolio.
2. Decide on your target allocation. For example, 90% equities (XEQT) and 10% bonds.
3. Optimize by account type. Put XEQT (the highest expected growth asset) in your TFSA first, then your RRSP. Put bonds in your non-registered account or RRSP, where the tax treatment is more favourable for interest income.

Example for a $200,000 total portfolio (target: 90% XEQT / 10% bonds):

The key insight: your XEQT percentage is a portfolio-wide decision, not a per-account decision. Each account plays a different role, but they all serve the same overall allocation.

8. When to Adjust Your XEQT Percentage

Your XEQT allocation should not be set in stone forever. Life changes, and your portfolio should reflect those changes. But – and this is important – adjustments should be driven by life events and plan changes, never by market movements.

Good reasons to adjust:

• Getting closer to retirement (planned glide path)
• Saving for a major purchase within 3-5 years
• Your risk tolerance has genuinely changed after a life event
• You have paid off debt, received a windfall, or moved short-term savings to a HISA – freeing your portfolio to be more aggressive

Bad reasons to adjust:

• The market dropped 20% and you are scared
• The market went up 30% and you feel invincible
• A coworker told you about a “sure thing” stock
• A financial influencer said bonds are dead (or that stocks are about to crash)

I adjust my XEQT allocation roughly once per year, and usually the answer is “no change needed.” The only major shift I have made recently was moving from 100% XEQT to an 80/20 core-satellite split – a lifestyle decision, not a market-timing decision.

9. The Verdict: For Most People, the Answer Is “More Than You Think”

Here is what I have found after years of writing about XEQT and talking to Canadian investors: most people underweight XEQT, not overweight it.

They hold 40% XEQT, 20% in Canadian bank stocks, 15% in a dividend ETF that overlaps heavily with XEQT, 10% in a bond fund they do not need yet, and 15% in speculative positions. It looks “diversified” on the surface, but it is really just complicated, overlapping, and expensive to maintain.

If you are under 45 with a 15+ year time horizon, the right XEQT allocation is somewhere between 80% and 100%. The range is narrower than most people think.

My practical advice:

• If in doubt, start at 100%. You can always add complexity later. It is much harder to simplify a messy portfolio than to start clean.
• Do not add bonds just because you “should.” Add them when your time horizon actually calls for it.
• If you want to pick stocks, limit it to 10-20%. Treat it as entertainment, not strategy.
• Think in decades, not months. The right allocation for a 30-year-old is determined by what happens over 30 years, not what the market does this quarter.

For most Canadians, the honest answer is: you should probably hold more XEQT than you currently do.

Frequently Asked Questions

Is 100% XEQT a good portfolio?

Yes, for investors with a long time horizon (15+ years) and the ability to tolerate significant short-term volatility. XEQT provides global diversification across 9,000+ stocks in a single ETF. It is not “too simple” – it is optimally simple. Many financial experts, including those who advocate the Canadian Couch Potato approach, consider all-in-one equity ETFs to be excellent core holdings.

How much XEQT should I buy per month?

As much as you can consistently afford after covering your expenses and maintaining an emergency fund. There is no magic number. What matters is consistency. Even $100/month invested regularly in XEQT will grow substantially over time. Increase your contributions whenever your income increases.

Should I hold XEQT and XGRO together?

Generally, no. XGRO is essentially 80% of what XEQT holds plus 20% bonds. Holding both creates overlap and makes it harder to know your true asset allocation. If you want 80% equities and 20% bonds, just hold XGRO on its own. If you want 90% equities and 10% bonds, hold 50% XEQT and 50% XGRO, or hold XEQT with a separate bond ETF.

Can I hold XEQT in my TFSA, RRSP, and non-registered account?

Absolutely. XEQT works in all three account types. The key is to think about your allocation across all accounts as a single portfolio. Prioritize holding XEQT in your TFSA (tax-free growth) and RRSP (U.S. withholding tax benefit) first, and use non-registered accounts for additional XEQT or tax-efficient alternatives.

What should I pair with XEQT if I do not want 100% equities?

The most common pairing is a bond ETF like ZAG (BMO Aggregate Bond Index ETF) or XBB (iShares Core Canadian Universe Bond Index ETF). You could also use GICs or a high-interest savings account ETF for the fixed income portion. The ratio depends on your risk tolerance and time horizon – see the allocation table in Section 3 above.

Is XEQT too risky for retirees?

XEQT at 100% is likely too aggressive for someone already in retirement, because sequence of returns risk means that selling during a downturn can permanently deplete your portfolio. However, holding some XEQT (40-60%) alongside fixed income is perfectly reasonable for retirees who need continued growth to fund a 25-30 year retirement. The key is building a glide path that reduces equity exposure gradually.

How often should I rebalance my XEQT allocation?

If you hold 100% XEQT, never – it rebalances itself internally. If you hold XEQT alongside other assets (bonds, individual stocks, etc.), check your allocation once or twice per year and rebalance if any asset class has drifted more than 5% from your target. Do not rebalance in response to market movements – do it on a fixed schedule.