An investment advisor is constructing a portfolio for a 45-year-old Canadian client with a moderate risk tolerance, aiming for long-term growth. The client has indicated that their primary financial goal is retirement in 20 years. Which of the following asset allocation strategies would generally be most suitable?

Question: An investment advisor is constructing a portfolio for a 45-year-old Canadian client with a moderate risk tolerance, aiming for long-term growth. The client has indicated that their primary financial goal is retirement in 20 years. Which of the following asset allocation strategies would generally be most suitable?

Answer options:

• 80% Canadian equities, 20% international equities. ✅ 60% equities (Canadian and international), 40% fixed income (government and corporate bonds).
• 100% money market instruments and short-term GICs.
• 70% emerging market equities, 30% high-yield corporate bonds.

Correct answer: 60% equities (Canadian and international), 40% fixed income (government and corporate bonds).

Explanation: For a moderate risk tolerance and long-term growth, a balanced portfolio with a mix of equities (for growth) and fixed income (for stability and income) is generally appropriate. The other options are either too aggressive or too conservative for the stated profile.