It’s been almost a year since my last HELOC investing update. I meant to post quarterly but time got away from me. That’s just another way to say that I’m lazy. Click the link below to read my last post.
HELOC Investing Update – September 2025
To quickly recap my holdings. I hold 85% XAW and 15% VCN. Initially, I chose this allocation over a one fund portfolio because I thought that having two funds would encourage me to buy more of the poorer performing fund when the allocation drifted.
XAW (85%) – iShares Core MSCI All Country World ex Canada Index ETF
VCN (15%) – Vanguard FTSE Canada All Cap Index ETF
September 2025 Portfolio Value
Below are the values and quantities of each ETF in September 2025.
Since my last post in September 2025, XAW shares are up 15% to $57.82. VCN shares are up 18% to $71.66. Who would have thought that the stock market would continue to rally. I sometimes wonder how much more I would be up if I had just invested the entire HELOC in September 2023 and left it to grow. As the market continues to rise, I continue to ask myself if it is wise to borrow funds to invest when markets are at all time highs.
One psychological hack that has helped me when markets go down is to borrow from the HELOC to buy more. It’s hard for me to do nothing when my portfolio drops. When markets drop, borrowing from the HELOC gives me a feeling of control. So what have I purchased in 2026?
2026 Purchases
I find it interesting to look back at the world headlines at the time I made my investments. There is always some headline that explains or causes stocks to move up or down. When I see news articles that tell of a stock sell off, that’s my signal to buy and use some more HELOC funds. Below are three orders that I put in this year. For each purchase, you can see the headline, how much I purchased, and the ETF chart.
March 18, 2026
March 18, 2026 – Bought 20 shares of XAW at $51.22/share for a total of $1024.40.
March 27, 2026
March 27, 2026 – Bought 40 shares of XAW at $49.77/share for a total of $1990.80.
April 2, 2026
April 2, 2026 – Bought 41 shares of XAW at $50.59/share for a total of $2074.19.
You’ll notice that I didn’t buy any VCN during the March 2026 dip. This is because Canadian Equities have been so hot that they’ve significantly outperformed US stocks causing my asset allocation to drift. Buying only XAW, made me ‘buy low’, putting me back at an 85/15 asset allocation.
2026 Dividends
XAW pays dividends twice a year(December and June) and VCN pays dividends quarterly.
Debt and Interest
Unlike traditional investing where you just use your own money, leveraged investing involves carrying debt and paying interest. Currently, I owe $65 000 on my HELOC.
Anytime you borrow money, you need to pay monthly interest payments. My borrowing rate is 5.45% (prime + 1.0%). I didn’t know this before, but I should have haggled harder for a better interest rate. Once it’s time to renew my mortgage, I’m going to shop around for better rates and merge my HELOC and mortgage into a readvanceable mortgage.
A big benefit of borrowing to invest is being able to deduct the interest paid on your loan. In 2025, I paid $3066 in interest payments. After filing my taxes, I received a $1200 tax refund which I used to pay down my mortgage.
Current Portfolio
The total portfolio value is $97 795 but I still have to pay the $65 000 back in the future. The debt doesn’t bother me but that’s easy for me to say right now because the investments have done well. Ask me how I feel about the debt when the market drops 50% and I’ll probably have a different answer.
I calculate the total gain by taking the portfolio value and subtracting the debt + lifetime interest.
There are a few numbers I don’t factor in to the total gain number. The first is the tax refund, which is a significant amount and only gets bigger as I borrow more. The second, is the tax I have to pay annually on the dividend payments. And the third is the capital gains that I’ll eventually have to pay when I sell the investments. However, my plan is to sell them in years where my income is low so the tax consequence will be minimal.
What’s Next?
Every time I write a HELOC update post the market is up. Can it be this easy? Well, so far it is. But I just entered some quick numbers into my calculator and a 30% drop in the market will wipe out all my gains and leave me several thousand dollars in the red. It’s not a matter of if but when. It’s impossible to time market drops. For now, I’m going to continue holding my current 85/15 portfolio and add more money when the allocation drifts. Until next time, don’t do anything stupid. Happy Investing!