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About Asset Allocation

Asset allocation shows how diversified your holdings are, providing a measure of risk in your account. We collected some top questions so you can easily understand how to take advantage of the feature.
 
What is Asset Allocation in WebBroker?
Asset Allocation is the classification of investments inside an account.  
WebBroker will display your investment assets categorized in six asset classes namely cash and cash equivalents, Canadian fixed income, global fixed income, Canadian equities, U.S. equities, and international^ Equities.
^ International refers to any geographic region outside of Canada and the United States, while "Global" refers to any geographic region outside of Canada.
 
Why is Asset Allocation important?
Asset Allocation is important because allocating assets within a portfolio has been shown to explain over (0% of its return variation over time, suggesting that the asset mix decision plays a much more important role in determining investment returns within a diversified portfolio versus the underlying security selection1.
1Determinants of Portfolio Performance; Brinson, Hood and Beebower; 1986.
 
What if I have investments that are outside the six main asset classes?
WebBroker displays a category marked Other, which includes many non-traditional investments like
  • Options and other derivatives
  • Physical commodities
  • Hedge funds
  • Structured products
This category also includes mutual funds or ETFs that cannot be classified solely within one of the other classes, such as a balanced mutual fund, or a target date mutual fund.
 
What are unclassified assets?
Unclassified assets are securities/funds that are currently not mapped in our database. In most cases, this is a new issue or a company that has recently been listed on the stock market. Once the security is added, it will be allocated in the correct category.
 
How do I know if my current Asset Allocation is appropriate for me?
An appropriate target asset allocation can be determined by factors including your investing time horizon, your financial objectives and the level of risk you are willing and able to take.
 
To determine your appropriate asset allocation, explore the Goals tab in WebBroker to better understand what an appropriate target asset allocation for you might look like.
 
How often is Asset Allocation data refreshed or updated?
Like the Holdings page, the Allocation tab uses real-time price data and will be updated with intra-day activity. 
 

Transaction

Refresh/update frequency

Changes to cash

Immediate

Trades in securities such as stocks or ETFs

Immediate

Trades in bonds, GICs or mutual funds

Next day

Can I see my Asset Allocation for my entire portfolio (e.g. multiple accounts)?
Currently, in WebBroker, the Allocation tab will only show asset allocation for the single currency of an individual account type.

Can I see my Asset Allocation using sectors or industries as categories (e.g. financials, technology, etc.)?
Currently, no. However, this is being considered for a future release.

Can I see what will happen to my asset allocation before I make a trade (e.g. analyze 'what-if' scenarios)?
Currently, no. However, this is being considered for a future release.

How is the Asset Allocation on my statement different from my asset allocation in WebBroker?
Asset Allocation categorization in your statement is displayed using broader classifications, like domestic/foreign or equity/fixed income. 

In WebBroker, investment assets are more specific, using Canadian, U.S., international or global labels. Investments that don’t fall in the above categories are displayed under Other. Statements do not have an Other category.

Here is a summary of how your assets are classified: 

Asset Classes

Your statement

WebBroker

Equity

Canadian Equity
Foreign Equity

*incl. Options
*incl. Balanced and Equity Mutual Funds or ETFs

Canadian Equity
U.S. Equity
International Equity

*incl. Equity Mutual Funds or ETFs

Fixed Income

Canadian Fixed Income
Foreign Fixed Income

*incl. Preferred Shares, PPNs and Convertible Debt
*incl. Fixed Income Mutual Funds or ETFs

Canadian Fixed Income
Global Fixed Income

*incl. Preferred Shares, PPNs and Convertible Debt
*incl. Fixed Income Mutual Funds or ETFs

Cash & Equivalents

Cash & Equivalents

*incl. Fixed Income securities <1 year to maturity

*incl. Money Market Funds and HISAs

Cash & Equivalents

*incl. Fixed Income securities <1 year to maturity

*incl. Money Market Funds and HISAs

Alternative Investments
 

Physical Commodities
Hedge Funds
Structured Products

 

Other

 

Commodities
Hedge Funds
Structured Products

*incl. Options
*incl. Balanced Mutual Funds or ETFs

 

 

 

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