Asset Allocation: Canada

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Asset Allocation: Canada

After an extensive search through credible sources, we were not able to provide an analysis of the typical asset allocation for ultra-high net worth individuals in Canada or how are their portfolios structured in terms of investments. However, the research team pulled together all the general insights about the portfolio breakdown and presented them below, together with the details of the team's research strategies to find the required information.

Other Helpful Findings

  • According to Money Sense, a portfolio should be more conservative as one gets older. This can be done by lowering the allocation to stocks that are riskier while replacing them with safer bonds.
  • There is a rule of thumb that suggests that individuals should allocate funds equal to their age into their portfolios.
  • The recommended allocations by type of investments in Canada are:
  • According to an article published by The Globe and Mail, the breakdown of a typical portfolio would be:
    • 25% real estate, where personal residences are not included
    • 10% alternative investments like derivatives, hedge funds, private equity, and foreign currency
    • 33% cash and fixed-income vehicles
    • the difference (32%) is in equities.

Research Strategy:

To provide an analysis of the typical asset allocation for ultra-high net worth individuals in Canada, we reviewed finance-related magazines and other publications that are produced by Canada. Some websites we visited were Money Sense, Money Magazine, Wealth Simple, and Financial Post. We were hoping to find data related to how certain income groups allocate their assets. Out of the data found, we were only able to find beginner guides, outdated articles, and some allocation suggestions based on age and other factors, but no article gave insights to asset allocation by income range.

Secondly, we looked for educational resources and "how-to" articles that teach individuals how to invest hoping to find information related to asset allocation for high-income individuals. Using this strategy would give us the suggested allocation for the required income range within Canada. Some websites we researched were Performance Forward, FordBridge, and Fidelity. Although we were able to find tutorials, online courses, and ways to meet up with Financial Advisors, we were not able to find any educational materials that gave the suggested allocation for ultra-high or high net worth individuals.

Next, we attempted to use some asset allocation calculators to determine the allocation for ultra-high or high net worth individuals. On the Performance Forward website, they suggested four different asset allocation calculators, so we used those for this strategy. The calculators used were Bankrate, Cal cXML, CNN, and SmartAsset. The Bankrate calculator did not allow us to set the income high enough, Cal cXML, CNN, and SmartAsset did not use income range as a factor. For this reason, this strategy did not produce any relevant result.

As our last resort, we did a direct search of various websites related to finances and asset allocation. Some of the websites we visited were Newport Private Wealth, Wealth Professional, and The Globe and Mail. This strategy did not give a full breakdown of asset allocation for ultra-high or high net worth individuals but it yielded some useful information as stated above.

Sources
Sources