Your Complete Guide to Index Investing with Dan Bortolotti

Couch Potato Portfolio Returns for 2012

2013-11-26T18:52:07+00:00January 11th, 2013|Categories: Uncategorized|59 Comments

I think we can safely say we are now almost four years into the most disrespected bull market in history, to borrow a phrase from Alexander Green. In a recent roundtable in The Wall Street Journal, the moderator opened the discussion by saying, “It’s been another very difficult year for investors.” Um, really? US stocks were up over 16% in 2012, and international equities did even better. If that’s a difficult year, I can’t wait for an easy one.

Indeed, last year was much kinder to investors than 2011, when the Complete Couch Potato returned just 2.36% and most of my other model portfolios did worse. In 2012, all of the model portfolios delivered remarkably similar performance, with returns between 8% and 9%.

The data below were gathered from fund websites whenever available: otherwise I used Morningstar. Returns for US-listed funds are expressed in Canadian dollars. Consider these unofficial results: when I have all the necessary data I will update the long-term Couch Potato performance report card. [Note: The updated report card is now available.]

Global Couch Potato (Option 1)
iShares S&P/TSX Capped Composite (XIC) 6.9%
iShares MSCI World (XWD) 13.5%
iShares DEX Universe Bond (XBB) 3.3%
Global Couch Potato (Option 2)
TD Canadian Index – e (TDB900) 6.9%
TD US Index – e (TDB902) 12.6%
TD International Index – e (TDB911) 15.5%
TD Canadian Bond Index – e (TDB909) 3.1%
Global Couch Potato (Option 3)
RBC Canadian Index (RBF556) 6.4%
RBC US Index (RBF557) 11.8%
RBC International Index (RBF559) 16.4%
TD Canadian Bond Index – I (TDB966) 2.8%
Complete Couch Potato
iShares S&P/TSX Capped Composite (XIC) 6.9%
Vanguard Total Stock Market (VTI) 13.4%
Vanguard Total International Stock (VXUS) 15.2%
BMO Equal Weight REITs (ZRE) 18.1%
iShares DEX Real Return Bond (XRB) 2.4%
iShares DEX Universe Bond (XBB) 3.3%
Yield-Hungry Couch Potato
iShares S&P/TSX Cdn Div Aristocrats (CDZ) 9.0%
iShares DJ Canada Select Dividend (XDV) 8.8%
iShares Global Monthly Adv Dividend (CYH) 9.5%
BMO Equal Weight REITs (ZRE) 18.1%
iShares S&P/TSX Preferred Stock (XPF) 11.1%
iShares DEX HYBrid Bond (XHB) 8.7%
iShares Advantaged US High-Yield Bond (CHB) 13.0%
iShares Advantaged Canadian Bond (CAB) 3.0%
iShares Canadian Fundamental (CRQ) 9.8%
iShares S&P/TSX SmallCap (XCS) -2.6%
Vanguard Total Stock Market (VTI) 13.4%
Vanguard Small Cap Value (VBR) 15.7%
iShares MSCI EAFE Value (EFV) 14.5%
iShares MSCI EAFE Small Cap (SCZ) 16.8%
Vanguard Emerging Markets (VWO) 15.8%
SPDR Dow Jones Global Real Estate (RWO) 21.9%
BMO Mid Federal Bond (ZFM) 2.8%
BMO Short Corporate Bond (ZCS) 3.6%


  1. NJ January 30, 2013 at 1:33 pm

    Thanks @CCP. I think this is a great suggestion which I would have not thought of :). Thank you. I will look into it. I do have TD e-series RRSP account which I just started and I am following CCP model portfolio. I will now look into what international equities does Industrial Alliance offer and also study CCP site to get some insight into what to pick.

  2. BH February 2, 2013 at 2:45 pm

    I am using VCE, VTI, VXUS, and VAB at 23/23/23/31 ratios. I am wondering about your thoughts on avoiding the currency exchange costs for VTI and using VFV or VUS instead and also changing VXUS to VEF (18%) and VEE (5%). What are your thoughts on currency hedging ETFs and will I miss out on any future gains to the US dollar if I use currency hedged ETFs to the Canadian Dollar? Thank you.

  3. Canadian Couch Potato February 2, 2013 at 2:58 pm

    @BH: I think using something like VFV or VEE (both are unhedged) are fine if you are not able to avoid currency exchange fees. But in most cases I recommend avoiding currency hedging, as it creates a significant drag on returns over the long term. Canadian Capitalist has written pretty extensively on this:

  4. Jungle February 2, 2013 at 3:23 pm

    Ok I can see the report card that was listed until 2011, the post said 2012 potato returns. Off google, I can see how I got confused.

    Thanks for clairifying.

  5. bettrave February 5, 2013 at 11:30 am

    I tried to calculate an annual return, but I can’t get the same return.
    Let’s take TDB909.
    End price first day of 2012: 11,62$
    End price last day of 2012: 11,64$
    Total distribution for 2012: 0,3615
    So I thought it would be:
    ((11,64+0,3615)/11,62 -1)x100= 3,28%
    And the right answer is 3,1% (or 3,06%)
    What do I do wrong?

  6. Canadian Couch Potato February 5, 2013 at 11:41 am

    @bettrave: First off, your start date should be the last day of 2011, not the first day of 2012. The return would also be affected by the date the distribution was paid. If it was paid earlier in the year and reinvested, that’s different from if it was all paid out at the end of the year.

    Since all funds’ published returns are audited, its usually best to trust them rather than your own calculations.

  7. Bernie February 5, 2013 at 11:44 am

    I believe your calculation is right but I think you should use the closing price of the last trading day of 2011. This would be the price for the beginning of 2012.

  8. Rahim June 20, 2013 at 1:40 pm

    Hello CCP,

    Your “Global Couch Potato (Option 3)” with primarily RBC index funds doesn’t appear on your “Model Portfolios” page anymore. Did you remove it for any particular reason? My RRSP portfolio is currently built off of this option:
    – 25% – RBC Canadian equity index
    – 25% – RBC US equity index
    – 25% – RBC Intl’l equity index
    – 25% – RBC Gov’t bond index (I decided to stick with RBC here instead of TD to consolidate my portfolio with 1 institution).

    I was simply curious to know if I should be aware of any abnormalities with RBC’s index fund offerings.


  9. Canadian Couch Potato June 20, 2013 at 4:14 pm

    @Rahim: I updated Option 3 for a couple of reasons. First, the TD US Index Fund is quite a bit cheaper than the RBC version (0.54% versus 0.72%). Second, the Altamira International Index Fund is available without currency hedging, while RBC offers only a hedged version.

    I would not be in a huge rush to switch, especially if you like the convenience of being able to rebalance between funds of the same family.

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