Boost the earning potential on your sitting cash

Yield to maturity (YTM) reflects the expected annual return if bonds are held to maturity at current market prices. For our Bond portfolios, YTM is the market value-weighted average of the underlying securities, shown net of management expense ratio (MER). The yield information is updated monthly.

It’s worth noting that the yield is subject to change due to fluctuations in dividend payments, ETF prices, and portfolio composition. Past performance is not indicative of future results.

Yes, you can invest in all three, but each one requires its own account. For example, if you wanted to invest in all three Income portfolios within a TFSA, you’d need to open three separate TFSAs — one for each portfolio.

The Income portfolios can offer a higher yield than just holding onto your extra cash, and it can add up over time if you’re comfortable taking a small amount of risk.

Although you can certainly do worse than holding your money in a Wealthsimple chequing account, investing in our low-risk Income portfolios might perform even better. Over a few years, the probability of outperforming our chequing account is 80-90%, and the probability of having losses over that period is very low. And even if you happen to underperform the chequing account once in a while, it typically won't be by much.

Disclosure: The probability of Income portfolios outperforming the Wealthsimple chequing account are modelled using normal distribution of returns, assuming 2% volatility, 0.5 Sharpe ratio (the measure of how good an investment’s returns are compared to its risk), and a 3-year time horizon.

Sharpe ratios and volatility assumptions are based on Wealthsimple's forward-looking asset class assumptions, which are derived from historical data and Wealthsimple analysis. There is no guarantee of return or the results described. Past performance is not indicative of future results.

Yes. Unlike GICs, you can withdraw your money anytime, without commitment periods or penalties. Just keep in mind that it takes 1–2 business days to process the sale of Income portfolios.

First, the risk of one company defaulting matters a lot less when you hold a diversified Income portfolio, rather than picking a few yourself.

We believe professional, active management has advantages over choosing individual bond ETFs. Our managed Income portfolios carefully mix two kinds of risks that balance each other out: the risk that borrowers might not repay their loans (credit risk) and the risk that interest rates might change (duration risk). We change how much of each risk we take on as the market changes, and we do it for two reasons:

• To lower the chance of losing money
• To earn you more interest than you would by just keeping your money in a savings account.

You won’t find those features in an off-the-shelf index ETF, which simply takes the issuance of bonds as they come. So, if the government issues a lot of bonds, you buy those. If risky corporations issue a lot of credit, you buy those. It’s not optimized for spreading out risk or protecting your money when markets aren’t performing in your favour. As a result, you might not earn as much money as you should for the risk you're taking — and if there's a market downturn, you might even lose more money than you'd expect.

The Money market portfolio does not include any management fees. The Dynamic bond portfolio and the Core bond portfolio have two types of fees. And as you might expect from us, they're pretty low.

The first is a management fee. It's what you pay us to take care of your investments. The amount you pay depends on your tier:

Core: 0.5%

Premium: 0.4%

Generation: 0.2%–0.4%

The second is a Management Expense Ratio (also known as an MER). This goes towards the funds we use in your portfolio and is, on average, about 0.2%.

Tip: We show Income portfolio yield to maturity net of ETF MER but gross of Wealthsimple management fees. For example: If your Income portfolio yield to maturity is 4.5% and you're a Wealthsimple premium client, your net yield to maturity after fees, is 4.5% – 0.40% = 4.1%

Income portfolios aim to give you reliable returns, but without the drawbacks of other options. Here are some of the advantages:

• Unlike Guaranteed Income Certificates (GICs), you can access your money at any time, because it’s not locked in.
• Compared to High-Interest Savings Accounts (HISAs), this portfolio offers higher expected returns by investing in bonds instead of cash.
• If you’re considering managing your own portfolio of bond ETFs directly, this portfolio saves you the hassle of reinvesting, rebalancing, or adapting to changing market environments, while keeping fees much lower than the average mutual fund.

The interest from your Income portfolio lands in your account every month. We’ll automatically reinvest it so that all of your money is working harder, bringing you closer to your financial goals.

Like all investments, Income portfolios aren’t entirely risk-free. While they focuses on high-quality, low-risk bonds, bond values may decline if interest rates rise. There’s also some credit risk: during major market downturns, like in 2008 or 2020, the chance of defaults increases, which could lead to minor losses. Our team works hard to keep risks low, but it’s important to remember that returns aren’t guaranteed.

Yes! If you (or your combined household) have over $500,000 with Wealthsimple, you can work with one of our advisors for a small fee. They’ll work alongside you on decisions to help grow your wealth, like choosing the Income portfolio that best fits your goals.

If you have general questions about Income portfolios, we have a number of resources you can check out in your own time. Our guide to opening a bond portfolio’s a good place to start.