Using a robo-advisor can be a great way to lower your investment costs, diversify your portfolio, and reduce the time you spend worrying about investing. But if you’re a DIY investor like me then you can lower your costs even further by building a portfolio of index funds or ETFs on your own.

Here are a few model portfolio ideas to get you started:

ETF solutions for your portfolio

A portfolio of three Vanguard ETFs was made popular when it was introduced by the Canadian Couch Potato blog. The chart below shows a balanced portfolio with 60% equities and 40% bonds.

Vanguard ETFs

Fund name Symbol MER YTD return Allocation
Canada All Cap Index ETF VCN 0.06% 4.38% 20%
Canadian Aggregate Bond Index ETF VAB 0.13% 1.25% 40%
All-World ex Canada Index ETF VXC 0.27% (6.07%) 40%

My own two-ETF solution is a variation of the Vanguard model portfolio, minus the bond fund.

Fund name Symbol MER YTD return Allocation
Canada All Cap Index ETF VCN 0.06% 4.38% 25%
All-World ex Canada Index ETF VXC 0.27% (6.07%) 75%

Blackrock’s iShares offers another low cost, broadly diversified set of ETFs for investors to choose from. Here’s another three-ETF portfolio solution with a balanced allocation.

iShares ETFs

Fund name Symbol MER YTD return Allocation
S&P/TSX Capped Composite Index ETF XIC 0.06% 4.53% 20%
Canadian Universe Bond Index ETF XBB 0.33% 1.31% 40%
All Country World ex Canada Index ETF XAW 0.21% (5.95%) 40%

BMO has over 60 ETFs in its line-up and was the first big bank to launch its own robo-advisor platform – BMO SmartFolio. Here’s a model balanced portfolio using BMO ETFs:

BMO ETFs

Fund name Symbol MER YTD return Allocation
S&P/TSX Capped Composite Index ETF ZCN 0.05% 4.51% 20%
Aggregate Bond Index ETF ZAG 0.20% 1.33% 40%
S&P 500 Index ETF ZSP 0.10% (4.98%) 20%
MSCI EAFE Index ETF ZEA 0.20% (8.93%) 20%

Index fund solutions from the big banks

Investors won’t find a cheaper portfolio of mutual funds than the one they can construct with TD’s popular e-Series index funds. I use this for my kids’ RESP fund, and the four funds are also part of the model portfolios from Canadian Couch Potato.

TD e-Series index funds

Fund name Symbol MER YTD return Allocation
Canadian Index Fund – e TDB900 0.33% 4.44% 20%
Canadian Bond Index Fund – e TDB909 0.50% 1.24% 40%
U.S. Index Fund – e TDB902 0.35% (5.39%) 20%
International Index Fund – e TDB911 0.51% (9.26%) 20%

Let’s say you bank at Scotia and don’t want to go through the hassle of setting up a discount brokerage or switching banks. This set of index funds is still much cheaper than a basket of actively managed mutual funds sold by a front-line advisor.

Scotia index funds

Fund name Symbol MER YTD return Allocation
Canadian Index BNS381 1.00% 4.29% 20%
Canadian Bond Index BNS386 0.85% 1.17% 40%
U.S. Index BNS382 1.08% (5.16%) 20%
International Index BNS387 1.25% (10.28%) 20%

Here are four RBC index funds – you have to look closely as they’re hidden among no fewer than 112 other RBC mutual funds.

RBC index funds

Fund name Symbol MER YTD return Allocation
Canadian Index Fund RBF556 0.72% 4.33% 20%
Canadian Government Bond Index Fund RBF563 0.67% 0.95% 40%
U.S. Index Fund RBF557 0.72% (5.08%) 20%
International Index Currency Neutral RBF559 0.71% (6.91%) 20%

Finally, we have surprisingly broad list of index funds from CIBC. The bank offers a set of regular index funds as well as something called a premium class. For simplicity sake we list the regular index funds below:

CIBC index funds

Fund name Symbol MER YTD return Allocation
Canadian Index Fund CIB300 1.14% 4.23% 20%
Canadian Bond Index Fund CIB503 1.16% 1.09% 40%
U.S. Index Fund CIB500 1.18% (5.23%) 20%
International Index Fund CIB510 1.23% (9.00%) 20%

One-fund or balanced fund solutions

Tangerine’s balanced fund is a one-fund solution made popular with its inclusion as one of the Canadian Couch Potato model portfolios. It offers a mix of Canadian stocks and bonds, plus exposure to U.S. and International equities.

Tangerine balanced portfolio

Fund name Symbol MER YTD return Allocation
Tangerine Balanced Portfolio INI220 1.07% (1.85%) 100%

One of the good guys in Canadian investment management, Steadyhand offers simple, transparent, and low-fee funds. Their one-fund solution is called the founders fund, and it invests 2/3 in Canadian, U.S., and overseas equities, with the rest in bonds and cash.

Steadyhand founders fund

Fund name Symbol MER YTD return Allocation
Steadyhand Founders Fund SIF125 1.34% (0.50%) 100%

Mawer is one of the first names to come to mind when discussing actively managed funds that actually outperform the index. Its funds have a long track record of doing exactly that, and having some of the lowest expense ratios in the business certainly helps.

Mawer’s balanced fund invests in seven Mawer mutual funds to get its exposure to Canadian stocks and bonds, as well as U.S. and international equities.

Mawer balanced fund

Fund name Symbol MER YTD return Allocation
Mawer Balanced Fund MAW104 0.94% (0.90%) 100%

Another surprise from CIBC adds this balanced index fund to the mix of one-fund portfolio solutions. The fund holds an interesting mix of cash, index funds, and individual stocks.

CIBC balanced index fund

Fund name Symbol MER YTD return Allocation
CIBC Balanced Index Fund CIB901 1.20% 0.49% 100%

Final thoughts

Often our readers are looking for ideas to help design their investment portfolios. As you can see from the 11 model portfolios highlighted above, no one-size fits all.

In addition to your age, risk tolerance, size of portfolio, and time horizon, there are still a number of factors to consider before designing your personal investment portfolio.

That includes having the skill, desire, and temperament to manage your own portfolio instead of hiring a financial advisor or robo-advisor to build and manage one for you.

The best approach is to find a simple investing solution that works for you and stick with it for the long term.


Pin It on Pinterest