If you consider the sum of your accounts as one big pool, then you could just sell some XIC in your account and buy whatever amount VTI in your own account. You won’t balance out the amount of money between your wife’s RRSP and yours, but the commissions would be the same and there would be an equal chance that in another year, your portfolio would grow slower than hers.

So in other words my advice is: Calculate the amounts you would like to buy/sell and execute those transactions using the least amount of fees possible, even if it means your accounts end up lopsided. If you need to sell X number of shares VTI down the road to rebalance, sell them in the account that has that many shares and buy in that same account whatever is unrepresented in the joint portfolio.

Thanks for a great blog and all the useful info it provides us less informed investors.

Just a quick question about how one would, or even if one should rebalance an all ETF portfolio. My wife and I have 4 trading accounts – an rrsp account for each of us, a spousal rrsp account and a joint non-rrsp account. Our portfolio is simple at this stage and consists of 6 different etf’s spread between these accounts. However, each account does not have the same mix of all 6 etf’s. 1.e. you may find one etf located in only one account and not the others.

This poses a problem for rebalancing as one cannot transfer funds between the rrsp accounts. e.g. if XIC located in my rrsp account goes up and VTI in my wifes rrsp goes down as a percentage of the overall portfolio, I cannot sell some of my XIC shares and shift the cash into my wifes rrsp account to buy more VTI to rebalance the overall portfolio. The only way to do this as far as I can see is to hold all 6 etf’s in all 4 accounts and then rebalance each account each year. This however costs a fortune in transaction fees.

Would the best way to do this therefore be to simply buy more of the etf’s that have gone down as a percentage of our portfolio and not buy those that have gone up in value and therefore now comprise a greater percentage of the portfolio?. i.e. in the previously mentioned scenario, I would simply buy more VTI this year and not buy anymore XIC to bring the portfolio back to its original allocation.

Thanks for your help and I look forward to your comments.

Thanks
paul

There are commissions for ETFs purchase, but Interactive Brokers charge 1USD commission, so I am purchasing into my ~10 positions portfolio monthly for 10$; hardly a high overhead.

Even for registered portfolios there is Questrade with 5$ commissions.

Now, eFunds are great choice to start with (I still use them for annual accumulation in RRSP), but they are not that beneficial as you may think…

There are a few reasons why my benchmark is built using ETFs. 1) Some ETFs are vastly cheaper than TD eFunds, even after taking commissions into account (VTI is 0.07% compared to 0.33% for the eFund. You can make the commission back in a year if you have $12,000 invested) 2) A more serious problem is that portfolios built entirely using eFunds will have no exposure to US small caps, emerging markets etc. 3) You have to open a TD Waterhouse account to access eFunds.

Still, a hybrid approach of using both eFunds and ETFs might be a better option.

For not understanding, you answered perfectly. I suspected something along the lines of what you indicated (though not re: the money market funds). That helps a lot though.

One could build an e-Funds analog of the Sleepy Portfolio with MMF, Cdn Bond Index, TSX Index, and int’l choices from S&P Index, Euro Index, Japan Index, or Int’l Index. Only thing missing would be a REIT – guess you’d have to use an ETF for that, and it would be the only component for which you’d pay commissions.

My wife and I have 4 e-Funds portfolios built along the lines described above, growing via monthly pre-approved purchases, and more than satisfying our ROI objectives for a little over 5 years now.

Will: I am not sure I understand your question. Interest from bonds are directly deposited as cash into the self-directed account. All you have to do is then park the cash in a money market account.