There was a time when Canada had five seasons: spring, summer, fall, winter, and RRSP. During January and especially February, the media would be awash with ads urging everyone to make an RRSP deposit before the March 1 deadline and get a tax break for doing so.

What we’re seeing now is only a shadow of what used to be. Financial institutions still want your money but the big emphasis on RRSPs has disappeared. We’re back to four seasons.

That does not mean retirement savings is any less important. If anything, it’s even more so. According to recent data from Statistics Canada, about 60 per cent of working Canadians do not have an employer pension plan. They’re on their own when it comes to putting aside money for retirement.

RRSPs offer two advantages. All the money you contribute is tax-deductible up to the limit. This year it’s 18 per cent of your earned income in 2024 to a maximum of $32,490. The second benefit is that all the income you earn within the plan is tax-free until you make a withdrawal. At that time, the amount coming out is taxable at your marginal rate.

Properly used, an RRSP can generate an impressive retirement fund over the years. In my book RRSPs: The Ultimate Wealth Builder, I point out that it is possible to build a portfolio worth several million dollars if you start early enough and contribute regularly.

Of course, as with any investment, RRSP assets must be allocated wisely and monitored on a regular basis. To help with that process, I launched an RRSP model portfolio fourteen years ago, in February 2012, and have monitored it twice a year since.

The portfolio has two main objectives: to preserve capital and to earn a higher rate of return than is available from a GIC. The original value was $25,031.92.

The portfolio contains a mix of ETFs and stocks, so readers who wish to replicate it must have a self-directed RRSP with a brokerage firm.

These are the securities we currently hold, with comments on how they have performed since the last review in August. Results are as of the close on Feb. 11.

iShares 0-5 Years TIPS Bond Index ETF (XSTP-T). This ETF invests in short-term US Government inflation protected notes. They pay a low rate of return, but both the face value and the interest increase as inflation rises. This provides downside portfolio protection. The units are down $1.32 since the last review in August. We received distributions that totaled 95 cents per unit. Note that while distributions are monthly, they vary considerably in amount.

CI High Interest Savings ETF (CSAV-T). This fund invests in high-interest deposit accounts at Canada’s major banks. It earns a better rate of return than a retail customer can obtain because of its hefty purchasing power. The units are down $0.05 since the last review, and we received monthly distributions totaling 50.72 cents per unit. The decline in the payout reflects the decline in interest rates over the latest period.

BMO S&P/TSX Banks Equal Weight Index ETF (ZEB-T). This ETF invests in shares of the Big Six Canadian banks. Banking stocks continue to do well, and this ETF posted a big gain of $12.34 per unit. Monthly distributions totaled 87.2 cents.

iShares Edge MSCI Minimum Volatility USA Index ETF (CAD-Hedged) (XMS-T). XMS invests in low-beta US stocks. Low beta means they are less sensitive to broad market movements and, in theory, less risky. The fund posted a small gain of 24 cents in the latest period. Quarterly distributions totaled 21 cents per unit.

BMO Low Volatility Canadian Equity ETF (ZLB-T). This ETF invests in a portfolio of large-cap Canadian stocks that have a low beta history. It’s up $3.26 since the last review. We received two quarterly distributions for a total of 57 cents.

BMO Low Volatility International Equity Hedged to Canadian Dollar ETF (ZLD-T). This ETF focuses on international stocks and is hedged to Canadian dollars, so the currency risk is removed. It gained 60 cents in the latest period. Distributions totaled 34 cents per unit.

Brookfield Corp. (BN-T). Brookfield operates in a range of business areas including real estate, asset management, renewable resources, infrastructure, and insurance. The stock split 3 for 2 in October, so we now own 300 shares in our portfolio. We received two quarterly dividends for a total of 16.6 cents. The company announced last week that it is raising the dividend by a penny to 7 US cents per quarter.

Enbridge Inc. (ENB-T). Enbridge offers an attractive yield (currently 5.4 per cent) and modest capital gains potential. The stock is up $3.28 since the last review and the quarterly dividend is 94.25 cents.

Fortis Inc. (FTS-T). Interest-sensitive stocks showed modest gains in the latest period, with Fortis up $3.31. Due to timing, we received one dividend of 64 cents per share.

Manulife Financial Corp. (MFC-T). We added Manulife a year ago and it’s doing well. The stock is up $9.66 in the latest period. Due to timing, we received one dividend for a total of 44 cents per share.

Interest. We had a cash balance (including retained income) of $3,061.22. We moved it to Tangerine Bank which had a promotional offer of 4.5 per cent for five months on new accounts. We received interest totaling $57.40.

Here is how the RRSP Portfolio stood as of Feb. 11. Commissions have not been factored in. All amounts are in Canadian dollars.

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Comments: The portfolio was up 7.4 per cent in the latest six months. Every security except XSTP showed a profit. The biggest gains were posted by Manulife and the BMO S&P/TSX Banks Equal Weight Index ETF.

Over the 14 years since the portfolio was launched, we have a total return of 250.6 per cent. That’s an average annual growth rate of 9.37 per cent, well ahead of our target.

Changes: The portfolio is performing well and has significant downside protection through its holdings in XSTP and CSAV. But those two securities are delivering minimal returns. Therefore, I am going to sell XSTP and replace it with the iShares Core Canadian Corporate Bond Index ETF (XCB-T). I expect this will give us a somewhat better return with a minimum amount of added risk.

We will sell our XSTP position for a total of $6,180.37, including retained earnings. We’ll buy 300 units of XCB at $20.40 for a total cost of $6,120. We’ll add the difference of $60.37 to cash.

We’ll also buy another 10 shares of Fortis for a cost of $739.90, which will increase our share count to 80. We’ll use the retained earnings of $682.89 and take $57.01 from cash to finance the trade.

The new cash balance (including retained income) is $2,852.74. We will move it to the Kawartha Credit Union High Interest eSavings Account which is paying 2.25 per cent on RRSP accounts.

Here is the revised portfolio. I’ll review it again in August.

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Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.