WealthCompare two portfolios without distorting the result
A return gap explains nothing until period, currency, contributions, risk and fees are comparable.
Published July 17, 2026 · By the WealthWise team · Human review indicated
Step 1: make the data comparable
Same period
Use identical start and end dates. A portfolio launched after a decline cannot be compared directly with a longer history.
Same currency
Convert values and returns into one currency using a consistent method.
Same cash-flow treatment
Separate contributions and withdrawals from performance. Otherwise, the portfolio receiving more money appears to win.
Dividends included
Compare total returns. A price index without dividends understates an investment that distributes income.
Step 2: compare several dimensions
| Dimension | Possible measure | Useful question |
|---|---|---|
| Return | Total and annualized return | What result over the same period? |
| Risk | Volatility and maximum drawdown | What path was required to earn that return? |
| Diversification | Countries, sectors and top holdings | Does the result depend on a few securities? |
| Fees | MER, platform and conversion | What return remains after visible costs? |
| Income | Distributions and payment growth | Does the portfolio meet the income need? |
| Tax context | Account and income type | Does a gross comparison hide different treatment? |
Step 3: choose the question before the winner
Two portfolios may fit different objectives. A global equity portfolio and a balanced portfolio do not target the same stability. An income portfolio may distribute more while growing more slowly. A concentrated portfolio can dominate for a period and then experience a larger decline.
State the question: Which preserved capital better? Which produced the desired income? Which better matched drawdown tolerance? Which had the lower total cost?
Real portfolio versus model or index
A model often assumes perfect rebalancing, no tax, no delay and complete historical data. A real portfolio contains cash flows, fees, price differences, currencies and sometimes holdings without a long history.
The comparison remains useful when those limits are visible. Put assumptions beside the result and never turn a backtest into a promise.
Tools for a fairer comparison
Inspect return, risk, overlap and benchmarks with the same starting data.
Portfolio analysis Canada
The complete framework for interpreting results.
ReadingHow to read a portfolio analysis
Understand each metric before comparing.
BenchmarkPortfolio versus S&P 500
Choose a coherent index and period.
RiskStandard deviation and volatility
Read the historical dispersion of returns.
ETFXEQT vs VEQT vs VFV
A concrete example of funds with different roles.
ProductPortfolio visualizer Canada
Explore a real portfolio in WealthWise.
Sources and method
Rules, limits and fees change. The primary sources below were reviewed on July 17, 2026. Always verify the official version before acting.
- Bank of Canada — exchange rates — normalizing CAD and foreign values
- Financial Consumer Agency of Canada — general return and risk principles
- WealthWise — methodology — assumptions, sources and comparison limits
Frequently asked questions
Can I compare portfolios of different sizes?
Yes. Use percentage returns and risk measures while separating contributions. Dollar size can answer a different question.
Should I compare average or annualized return?
Across several years, compounded annualized return is generally more informative than a simple arithmetic average. Show the full period as well.
Why include volatility?
Two portfolios can produce similar returns through very different paths. Volatility and maximum drawdown describe part of that experience.
Does a backtest identify the best future portfolio?
No. It describes a historical result under stated assumptions. Future returns, correlations, fees and conditions can differ.
Compare under the same rules
Bring positions together, select the period and inspect return, allocation and risk in one view.