Hey there. So, the benchmarks are created proportionally related to the stocks they have in the portfolio.
Our growth portfolios, for the most part, are all Canadian stocks with an equity/fixed income makeup. So for this reason, our blended benchmarks tend to be the TSX Index and a bond index that is reflective of the current makeup. So for example, if a portfolio is 70% equity 30% fixed income, we will utilize a 70% TSX/ 30% fixed income benchmark.
Something like the dividend growth model, on the other hand, is a blend of both Canadian and US stocks. It is simply not possibly to construct an optimal dividend growth portfolio with 100% Canadian equities. You'd have a portfolio that is loaded with financial companies. For this reason, we have a 65/35 Canadian/US makeup. This is exactly why our benchmarks are 65/35 TSX and S&P 500.
Does this make sense? Feel free to drop a comment if you need some more clarification.
Posted by Anonymous