Going Global
A diversified portfolio that includes exposure to global stocks can help reduce concentration risk - at the sector and company level - compared to investing in Canadian stocks alone.
Power of diversification
Put Diversification to Work
Diversification is key to managing risk. No single asset class is consistently among the top performers, and the best and worst performers change from one year to the next.
Highest
Lowest
Diversification table organised left-to-right by increasing years and top-to-bottom by decreasing returns.
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|---|
|
U.S. Equities 21.6% |
Canadian Small Cap 38.5% |
Emerging Markets 28.7% |
Global Bonds 7.7% |
U.S. Equities 24.8% |
U.S. Small Cap 17.9% |
U.S. Equities 27.6% |
Canadian Home Prices 2.3% |
U.S. Equities 22.9% |
U.S. Equities 36.4% |
|
International Equities 19.5% |
Canadian Equities 21.1% |
International Equities 17.4% |
U.S. Equities 4.2% |
Canadian Equities 22.9% |
Emerging Markets 16.6% |
Canadian Equities 25.1% |
Canadian Equities -5.8% |
International Equities 15.7% |
U.S. Small Cap 21.7% |
|
Global Bonds 16.1% |
U.S. Small Cap 17.1% |
U.S. Equities 13.8% |
Canadian Home Prices 2.5% |
U.S. Small Cap 19.2% |
U.S. Equities 16.3% |
Canadian Small Cap 20.3% |
International Equities -7.8% |
U.S. Small Cap 13.8% |
Canadian Equities 21.7% |
|
U.S. Small Cap 14.6% |
Canadian Home Prices 11.7% |
Canadian Equities 9.1% |
Canadian Bonds 1.4% |
International Equities 16.5% |
Canadian Small Cap 12.9% |
Canadian Home Prices 15.1% |
Canadian Small Cap -9.3% |
Balanced Portfolio 12.5% |
Canadian Small Cap 18.8% |
|
Canadian Home Prices 6.2% |
Balanced Portfolio 8.2% |
Canadian Home Prices 8.6% |
Balanced Portfolio -2.0% |
Balanced Portfolio 16.1% |
Balanced Portfolio 10.0% |
U.S. Small Cap 13.8% |
Balanced Portfolio -9.8% |
Canadian Equities 11.8% |
Emerging Markets 17.9% |
|
Balanced Portfolio 4.4% |
U.S. Equities 8.1% |
Balanced Portfolio 8.2% |
U.S. Small Cap -3.0% |
Canadian Small Cap 15.8% |
Canadian Home Prices 9.2% |
Balanced Portfolio 12.3% |
Global Bonds -10.2% |
Emerging Markets 7.3% |
Balanced Portfolio 16.8% |
|
Canadian Bonds 3.5% |
Emerging Markets 7.7% |
U.S. Small Cap 7.1% |
International Equities -5.6% |
Emerging Markets 12.9% |
Canadian Bonds 8.7% |
International Equities 10.8% |
Canadian Bonds -11.7% |
Canadian Bonds 6.7% |
International Equities 13.8% |
|
Emerging Markets 2.4% |
Canadian Bonds 1.7% |
Canadian Small Cap 2.8% |
Emerging Markets -6.5% |
Canadian Bonds 6.9% |
Global Bonds 7.3% |
Canadian Bonds -2.5% |
U.S. Equities -12.2% |
Canadian Small Cap 4.8% |
Global Bonds 7.2% |
|
Canadian Equities -8.3% |
Global Bonds -1.4% |
Canadian Bonds 2.5% |
Canadian Equities -8.9% |
Canadian Home Prices 2.1% |
International Equities 6.4% |
Emerging Markets -3.1% |
Emerging Markets -13.9% |
Global Bonds 2.9% |
Canadian Bonds 4.2% |
|
Canadian Small Cap -13.3% |
International Equities -2.0% |
Global Bonds 0.3% |
Canadian Small Cap -18.2% |
Global Bonds 1.4% |
Canadian Equities 5.6% |
Global Bonds -5.5% |
U.S. Small Cap -14.7% |
Canadian Home Prices 2.8% |
Canadian Home Prices 2.4% |
Source: Morningstar. Priced in Canadian currency, as at December 31, 2024. Assumes reinvestment of all income and no transaction costs or taxes. Annual returns compounded monthly. The asset classes are represented by their indicated indices and the balanced portfolio is hypothetical in nature. This information is for illustrative purposes only. It is not possible to invest directly in an index.
Asset classes and balanced portfolio are represented by the following (indexes parenthesized): Canadian Small Cap (S&P/TSX Small Cap Index); U.S. Equities (S&P 500 Index); Canadian Equities (S&P/TSX Composite Total Return Index); Canadian Bonds (FTSE Canada Universe Bond Index); International Equities (MSCI EAFE Index); Emerging Markets (MSCI Emerging Markets Free Index); U.S. Small Cap (Russell 2000 Index); Global Bonds (Barclays Global Aggregate Bond Index); Canadian Home Prices: Teranet-National Bank House Price Index Composite 11 index (C11). Balanced Portfolio (40% FTSE Canada Universe Bond Index, 30% S&P/TSX Composite Total Return Index, 30% MSCI World Index).
Top 10 stocks in Canada (% of index): 36.59%
Canada - 36.59%
6.95% - Royal Bank of Canada
5.25% - Shopify
3.79% - Toronto-Dominion Bank
3.76% - Enbridge
3.36% - Brookfield Corporation
2.88% - Bank of Montreal
2.75% - Canadian Pacific Kansas City Limited
2.72% - Bank of Nova Scotia
2.65% - Canadian Natural Resources
2.48% - Constellation Software
Top 10 Global Stocks (% of index): 23.86%
Global - 23.86%
4.91% - Apple
4.25% - Nvidia
3.84% - Microsoft
2.67% - Amazon.com
1.65% - Meta Platforms (Class A)
1.50% - Tesla
1.43% - Alphabet (Class A)
1.33% - Broadcom
1.24% - Alphabet (Class C)
1.04% - Taiwan Semiconductor
Top 3 Canada Sectors (% of index): 62.70%
Canada - 62.70%
33.03% - Financials
17.14% - Energy
12.61% - Industrials
Top 3 Global Sectors (% of index): 54.12%
Global - 54.12%
25.98% - Information Technology
16.80% - Financials
11.34% - Consumer Discretionary
Source: 1832 Asset Management L.P. as at December 31, 2024. Top 10 stocks and top 3 sectors information for Canada is represented by the S&P/TSX Composite Index. Global top 10 stocks and top 3 sectors information is represented by the MSCI All Country World Index. Information is for illustrative purposes only and is subject to change. It is not possible to invest directly in an index.
