Top ETFs and Model Portfolios for Canadian Investors

Top ETFs and Model Portfolios for Canadian Investors

The investing landscape has certainly evolved for the better over the past two decades. Gone are the days when the only way to invest was to work with an expensive broker or mutual fund salesperson. Self-directed investing platforms, robo-advisors, and all-in-one ETFs have democratized investing – making it cheap and accessible for investors to build a portfolio at any age and stage.

Today, just as mutual funds dominated the investing scene in the 1990s, exchange-traded funds (ETFs) are exploding in popularity as investors flock to low cost passive investing products. The challenge for investors is to separate the wheat from the chaff. Indeed, according to the Canadian ETF Association (CETFA), there are now more than 1,100 ETFs offered by 40 ETF providers.

In this article, I’ll break out the top ETFs for Canadian investors to help you avoid analysis paralysis and make an informed decision about which ETFs to hold in your portfolio.

Then I’ll take it one step further and show you one simple portfolio to get started with a self-directed index investing portfolio, and one more complicated version to help investors with larger portfolios save on fees.

Top ETFs for Canadian Investors

First, let’s sort out the top ETFs from that list of 1,100+ funds. I’m going to stick with ETFs from the three largest ETF providers in Canada (stats from Jan 2023):

  1. BlackRock Canada: 143 ETFs and $104.9B in assets under management 
  2. BMO Asset Management: 152 ETFs and $95.7B in assets under management
  3. Vanguard Canada: 37 ETFs and $59.7B in assets under management

I’m also going to screen out any ETFs that are actively managed or that focus on a specific sector (I’m looking at you, BetaPro Crude Oil 2x Daily Bull ETF).

Instead, we’re looking for ETFs that track as broad of an index as possible to give investors the ultimate diversification of global stocks and bonds. I’ve narrowed down the list to the top 20 ETFs on the market.

Canadian Equity ETFs

Each of these two ETFs offer exposure to approximately 200 of Canada’s top small, medium, and large companies for an ultra-low fee.

  • Vanguard FTSE Canada All Cap Index ETF (VCN)
  • iShares Core S&P/TSX Capped Composite Index ETF (XIC)

U.S. Equity ETFs

Each of these two ETFs offer exposure to the entire U.S. stock market by tracking the CRSP US Total Market Index.

  • iShares Core S&P US Total Market Index ETF (XUU)
  • Vanguard U.S. Total Market Index ETF (VUN)

International and Emerging Market ETFs

Vanguard’s VIU and iShares’ XEF offer exposure to thousands of stocks in the developed world outside of North America (Europe and the Pacific), while VEE and XEC, respectively, give investors exposure to thousands of stocks from emerging markets around the globe.

  • Vanguard FTSE Developed All Cap ex North America Index ETF (VIU)
  • Vanguard FTSE Emerging Markets All Cap Index ETF (VEE)
  • iShares Core MSCI EAFE IMI Index ETF (XEF)
  • iShares Core MSCI Emerging Markets IMI Index ETF (XEC)

Global Equity ETFs

Investors can avoid holding individual ETFs for U.S. equity, international equity, and emerging markets by choosing one of these two global equity ETFs (All World, ex Canada).

  • iShares Core MSCI All Country World ex Canada Index ETF (XAW)
  • Vanguard FTSE Global All Cap ex Canada Index ETF (VXC)

Bond ETFs

These popular Canadian bond ETFs give investors exposure to the broad universe of Canadian government and corporate bonds.

  • BMO Aggregate Bond Index ETF (ZAG)
  • Vanguard Canadian Aggregate Bond Index ETF (VAB)

All-in-One ETFs

Vanguard, iShares, and BMO all offer all-in-one balanced ETFs that come in several different flavours depending on your risk tolerance. These one-decision ETFs circumvent the need to hold multiple ETFs.


  • Vanguard All-Equity ETF Portfolio (VEQT)
  • Vanguard Growth ETF Portfolio (VGRO)
  • Vanguard Balanced ETF Portfolio (VBAL)


  • iShares Core Equity ETF Portfolio (XEQT)
  • iShares Core Growth ETF Portfolio (XGRO)
  • iShares Core Balanced ETF Portfolio (XBAL)


  • BMO All Equity ETF (ZEQT)
  • BMO Balanced ETF (ZBAL)
  • BMO Growth ETF (ZGRO)

Model ETF Portfolios (Putting It All Together)

I’ve pulled out the top 20 ETFs, but that’s still a lot for investors to sort through when deciding which ones to use for their own portfolio. Now I’m going to break things down even further by showing you an ideal model ETF portfolio depending on the size of your account(s).

Along the way you may need to make trade-offs that include simple versus complex, low cost versus even lower cost, and automatic monitoring and rebalancing versus a more hands-on approach to portfolio construction.

The need for these trade-offs becomes more apparent as your portfolio grows over time.

One-Fund ETF Portfolio vs. 3-Fund ETF Portfolio

First, we’re going to look at an example of a young investor with an initial $10,000 to invest. We’ll assume the appropriate asset mix for this investor is a portfolio with 80 percent equities and 20 percent bonds.

Keep the process as simple as possible when you’re building an ETF portfolio. That means you should likely choose one of the asset allocation ETFs (one ETF solutions), such as iShares’ XGRO or Vanguard’s VGRO.

One-Fund ETF Portfolio ($10,000)

Ticker MER % Allocation $ Allocation $ Fee
XGRO 0.21% 100% $10,000  
Total 0.21% 100% $10,000 $21


The trade-off for a slightly higher fee is the simplicity of these products. They automatically adjust your allocation behind the scenes, so you don’t have to monitor or rebalance on your own.

Select a self-directed investing platform, fund your account, and then purchase the single ETF. It’s that easy.

I’d recommend choosing Questrade, which offers free ETF purchases, or Wealthsimple Trade, the mobile-only investing platform that offers zero-commission ETF trades.

Since you’ll likely be adding new money regularly, and likely in smaller amounts, a one-ETF solution is ideal to avoid having to tinker and rebalance your portfolio with every contribution.

As you can see by the model portfolio breakdowns for the more complex portfolios, you’d be tweaking each individual ETFs amount with every purchase to try and stay true to your original asset mix. 

Three-Fund ETF Portfolio ($10,000)

Ticker % MER % Allocation $ Allocation $ Fee
VCN 0.06% 25% $2,500  
XAW 0.22% 55% $5,500  
VAB 0.09% 20% $2,000  
Total 0.15% 100% $10,000 $15


That’s why I highly recommend a one-ETF solution for new investors who plan to invest a small amount to start, and want to add small, frequent contributions with every paycheque.

Adding Complexity to Save on Fees

When you’re first starting your investing journey it makes sense to value simplicity over fees. That’s because in the early stages of investing your savings rate and contributions will have much more of an impact than fees.

But when your portfolio grows to the six-figure range, perhaps even around $200,000, these extra costs can certainly add up. At this point it can make sense to add some complexity, such as unbundling a one-ETF solution in favour of adding some lower fee U.S. listed ETFs.

U.S.-listed ETFs come with lower MERs and less foreign withholding taxes. But they require you to invest using U.S. currency. Since it can be expensive to convert currency, investors perform a manoeuvre known as Norbert’s Gambit to convert CAD to USD and vice-versa.

The good news is that if and when you’re ready to do this, a discount brokerage platform like Questrade can support USD and the Norbert’s Gambit move.

Let’s now look at model ETF portfolios for an investor with a $200,000 portfolio.  

One-Fund ETF Portfolio ($200,000)

Ticker MER % Allocation $ Allocation $ Fee
XGRO 0.21% 100% $200,000  
Total 0.21% 100% $200,000 $420


The one-ETF solution is still incredibly cheap compared to any mutual fund or actively managed portfolio.

But let’s show how low our costs can get when we dissect the portfolio into three ETFs.

Three-Fund ETF Portfolio ($200,000)

Ticker MER % Allocation $ Allocation $ Fee
VCN 0.06% 25% $50,000  
XAW 0.22% 55% $110,000  
VAB 0.09% 20% $40,000  
Total 0.15% 100% $200,000 $308


With a $200,000 portfolio you’ll save $112 per year by using the three-ETF model portfolio.

Let’s take things one-step further with a five-ETF solution courtesy of PWL Capital’s Justin Bender and his “ridiculous” model ETF portfolio.

Lowest Fee ETF Solution (RRSPs – $200,000)

Ticker MER % Allocation $ Allocation $ Fee
VAB 0.09% 20% $40,000  
VCN 0.06% 24% $48,000  
VTI 0.03% 31.83% $63,660  
VIU 0.22% 18.00% $36,000  
VWO 0.10% 6.17% $12,340  
Total 0.09% 100% $200,000 $180


With this low-fee solution our investor would save $240 per year by unbundling the one-ETF solution in favour of this five-ETF portfolio.

  • Vanguard Canadian Aggregate Bond Index ETF
  • Vanguard FTSE Canada All Cap Index ETF
  • Vanguard Total Stock Market ETF (U.S.-listed)
  • Vanguard FTSE Developed All Cap ex North America Index ETF
  • Vanguard FTSE Emerging Markets ETF (U.S.-listed)

Two of the ETFs are U.S.-listed, meaning you’ll need a USD account and USD currency to purchase the funds. As mentioned, you’ll also need to perform the currency conversion move called Norbert’s Gambit to exchange CAD and USD and avoid currency conversion fees.

The extra tinkering, monitoring, and rebalancing may not be worth it for some investors (me included), but as your portfolio grows the cost savings may become too tempting to ignore.

Final thoughts

When you’re starting out with $5,000 or $10,000 to invest it doesn’t make a ton of sense to slice-and-dice your portfolio into a handful of different ETFs.

A one-ticket ETF is all you need at this stage while you build up your investment portfolio. Later on, as your portfolio grows and the fees start to creep up, then consider a more complex portfolio that can help you save on MER and foreign withholding taxes.

Related: Need help setting up your own DIY investing portfolio? Check out my DIY Investing Made Easy video series.

I know that 1,000+ ETFs can be overwhelming, and you may not know where to start. Hopefully this guide can help you avoid analysis paralysis so you can start investing confidently in ETFs.

Decide on a model portfolio and an asset mix that’s suitable for your situation. Use a self-directed investing platform like Questrade or Wealthsimple Trade to save on transactional costs. Put your money to work regularly by setting up automatic contributions.

And, finally, stick to your investing plan through good times and bad. Passive investing through index ETFs is designed to deliver market returns, minus a small fee. That means your investment portfolio will go up and down with the direction of the market.

Over the long term, that risk has paid off handsomely.

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  1. LittleMountain on April 15, 2020 at 1:32 pm

    Thanks, Rob! This is an excellent and straight forward breakdown. For people who want to go “nuts”, there are always the model portfolios from Justin Bender.. 😉 But yours is an excellent introduction!

    One question I would have about buying US listed ETFs: everyone talks about fees to exchange $CAD to $USD (with or without Norbert’s Gambit), but no one really talks about the exchange rate between the two currencies. I remembers that about a decade ago, the exchange rate was 1:1 whereas nowadays, the Candian Dollar is down to roughly $0.70+ USD, so a significant drop.
    I usually stay with currency hedged ETFs, to avoid the “risk” of fluctuating exchange rates. Yes, there is the additional withholding tax, but this is on dividends only.

  2. Brien Stewart on April 15, 2020 at 4:36 pm

    What ETF’s do you recommend for someone who is looking for yield rather than growth?

    Thanks Rob, really enjoy your posts.

    • Robb Engen on April 15, 2020 at 10:43 pm

      Hi Brien, dividend ETFs (at least the more diversified ones) tend to come with a lower yield than most dividend investors are seeking.

      A more concentrated dividend ETF like Vanguard’s VDY (tracking 53 Canadian high dividend yield stocks) has a current yield 4.53%. And iShares CDZ (tracks 97 Canadian dividend aristocrats) has a yield of 5.29%. These yields sound attractive but keep in mind you’re investing in a small geographical region (Canada) and only its dividend paying stocks.

      Outside of Canada there’s VIDY which tracks the FTSE Developed ex North America High Dividend Yield Index and has a yield of 3.76%.

      In the U.S., there’s VGG which tracks the U.S. Dividend Appreciation Index. This one has a yield of just 1.31%.

      • Mike Jeffries on April 17, 2020 at 1:27 pm

        “you’re investing in a small geographical region (Canada)”.
        Realize that many Canadian companies are international thus taking advantage of economies elsewhere. TD, for example has as many or more USA branches as in Canada. FTS utility is also diversified outside of Canada. Likewise AGN, TCP, ENB etc.

      • Sandra Anthony on February 24, 2023 at 3:37 pm

        Rob – always love the great info in your articles!

        Having recently come upon some inheritance, today my husband and I transferred ~200K$ into our first ever set of Questrade accounts (maxing our RRSPs – then filling our TSFA room). After years of analysis paralysis, this is our first foray into passive investing. I hope it also unsticks us, and that my next move is finally moving ~400K$ of RRSPs from our “advisor” and out of the ugly mix of Mutual Funds and individual stocks.

        For me, this next step of picking ETFs is exciting – and very scary – despite years of reading and learning. I am ready to follow your all-in one ETF recommendations in this article, but I can’t tell if they were updated in Aug 2022 or from 2020 (seeing many comments from 2020). Also curious if recommendations change with higher portfolio amounts that will be close to $600k all said and done. Very much appreciate all you do in the community!!

        • Robb Engen on February 24, 2023 at 4:21 pm

          Hi Sandra, thanks for the kind words. I do aim to keep the content up-to-date every so often and that’s still the case today (although it was originally written in 2020).

          I don’t think you need to “graduate” to a more complicated portfolio when you have a higher balance. Many DIY investors are perfectly happy holding a single asset allocation ETF whether they have five, six, or even seven-figure portfolios.

          Remember, underneath the hood of the all-in-one ETF is a mix of 7 individual ETFs. They’ve just been neatly packaged into single balanced fund for your convenience. If the idea of holding 7 ETFs representing 13,000+ stocks and 17,000+ bonds from every corner of the globe sounds more sophisticated then just think of your all-in-one ETF as the sum of its individual parts.

          BTW, you may find my new investing series helpful as I walk you through exactly how to open an account, fund the account, transfer existing accounts, and how to buy your asset allocation ETF in your chosen discount brokerage platform.

  3. Rod on April 15, 2020 at 9:45 pm

    Hi Robb,

    I’m curious what your thoughts are on the size of portfolio that would warrant the greater complexity. In your 200k example, it’s $240 per year. I Know that it would vary by individual but was thinking that it might be worth it more once the fee savings approach $1k/year (so $800k+). If it’s just several hours more per year, that could be a good trade off.


    • Robb Engen on April 15, 2020 at 10:55 pm

      Hi Rod, great question and one I’ve pondered myself. Take a look at this post where I asked PWL Capital’s Justin Bender this very question:

      Keep in mind there’s an extra layer of costs at play here called foreign withholding taxes which can make the trade-off even more appealing at around the $200,000 mark.

      However, as Mr. Bender explains in that article, there’s also an extra layer of complexity from the currency conversion, PLUS, the potential opportunity cost of being underexposed to equities while your brokerage settles the currency conversion (TD, for instance, takes a few days to process the Gambit transaction).

      Note that some brokers, like RBC Direct Investing, allow you to implement the entire Norbert’s Gambit process in the same trading day, so choose your broker wisely if you go down this route.

  4. Charlie on April 16, 2020 at 5:02 am

    Hi Rob,
    Another great post. I’ve been a firm believer in balanced etf portfolios like the VBAL you’ve highlighted. In today’s environment, etf investing is so broad that we buy into the mediocre with the good investments that they track. I mean we know travel and hospitality will be hard hit for quite sometime. Why buy into a broad based fund when we know these types of companies will do poorly in the short term with many going bankrupt and closing for good?

    Also what are your thoughts on an older investor’s ideal portfolio when they’re 2-3 years out from retirement?

    • Robb Engen on April 16, 2020 at 8:00 am

      Hi Charlie, thanks! I don’t believe your investment strategy or allocation should change based on market conditions.

      Let’s unpack your comment about travel and hospitality. You say we know this industry will be hard hit for quite some time. In reality, we know this industry has been hit hard already.

      Stock prices at major hotel chains like Marriott and IHG dropped 55-60% but have since rebounded along with the latest market bounce and are “only” down 38-45% as of today. Airlines have been hit harder (majors like United and Delta are still down 60%).

      So, on the one hand, you want to make a portfolio decision to remove these companies now, but the damage has already been done. It also requires some incredible foresight to imagine a world 5-10-20 years from now where tourism is no longer a major driver of certain economies.

      On the other hand, the broad index also includes companies that are unexpectedly thriving in this environment.

      We’re all home and watching more Netflix than usual. Those of us working from home are using video conferencing software like Zoom. All of us, even those who are self-isolating, need groceries. U.S. grocery giant Kroger and Canadian conglomerate Loblaws have benefitted greatly. We’re ordering more online from Amazon (up 23% YTD). And, since we’re all washing our hands and disinfecting every surface regularly, companies like Clorox are cleaning up.

      The point of buying all the companies in the world with a broad-based index ETF is that we cannot predict which companies, industries, sectors, countries, or regions will perform well or poorly in the future. So we buy all of them to diversify and capture the collective gains.

      We have to avoid hindsight bias and understand that we could not have seen this coming – but the time we understood what was happening in the market all the known information had already been priced in.

      As far as an ideal portfolio for someone nearing retirement goes, I typically recommend building a safety buffer between your investments – such as one year’s worth of spending in cash, three-to-five years worth of spending in some sort of GIC ladder, and the remainder of your portfolio in a risk-appropriate mix of stocks and bonds (something like VBAL could certainly be a sensible option).

      • David Butler on April 19, 2021 at 1:20 pm

        Robb: Greatly enjoying your articles!

        Does your advice regarding the ideal portfolio change for someone who is fortunate enough to have an indexed pension which covers the majority of their living expenses? I am thinking in that instance that growth / protection against inflation would become a greater focus?


        • Robb Engen on April 19, 2021 at 2:46 pm

          Hi David, I’d start with the idea that a low cost, globally diversified, and risk appropriate portfolio is the best and most reliable way to invest for the long-term.

          The answer to your question really depends on your goals and risk tolerance. Some treat their pension income like a bond and so they invest more aggressively outside of their pension plan. Others, whose needs are already met by their pension and government benefits, may invest more conservatively – with the idea of preserving capital and building a cushion for unexpected spending shocks, health concerns, or legacy goals.

          If you have an indexed pension, and your government benefits are indexed, I’m not sure why the main focus of the investments would be for inflation protection.

  5. Tom on April 16, 2020 at 5:06 am

    Hi Robb,
    Is there a “where used” site that can be used to look up what stock is used in ETF’s. Example: enter ticker RY and get a list of ETF’s (with %’s of holding) that include RY.
    I know it would only be accurate of time of look up and would fluctuate with time/re-balancing.

    • Robb Engen on April 16, 2020 at 8:02 am

      Hi Tom, I’m afraid I don’t know of a site like this where you can find that information. If I come across something I’ll leave another reply here.

  6. Kevin on April 16, 2020 at 9:29 am

    Hi Robb,

    Really good post with great tips for beginner to start investing.

    Would you recommend for someone that is starting to invest (let’s say with $10,000 from your example) to sell his all-in-one ETF (VEQT for example) when he reaches that six-figure portfolio ($200,000 from your example) in a decade or two and buy different ETFs (as you recommended) to minimize MER?

    If yes, at what point would you recommend someone doing so? $100,000? $200,000?

    Thank you

    • Robb Engen on April 16, 2020 at 9:52 am

      Hi Kevin, thanks! So, I’m living this example myself and if you follow the link I shared in my reply to Rod you’ll see Justin Bender answer my question about sticking with VEQT or moving to a lower cost option.

      In his post he explains the trade-off between cost and simplicity. What I took from that is if you’re not the type of investor who will take the time to fully optimize his or her portfolio by performing Norbert’s Gambit, and moving to a discount broker who can process that manoeuvre in the same day (rather than taking 2-3 days), then you’re better off sticking with the one-ETF solution.

      Let me just say that the cost savings look great in an article or on a spreadsheet, but don’t underestimate the time and effort it takes to monitor and rebalance your portfolio.

      Remember, the day after you implement your portfolio markets will open and stocks and bonds will start moving around – throwing your portfolio off its original target mix.

      If you go this route I’d highly recommend developing a rebalancing strategy now that you pledge to stick to. This could mean either:

      – Rebalancing by % threshold – meaning whenever your asset mix drifts away from its original allocation by 5% then you’ll rebalance.
      – Rebalancing by date – meaning you commit to rebalancing quarterly, semi-annually, or at the very least annually.

      I would personally choose the % threshold, but either way it’s important to set up a rule now and stick to it so you take your emotions out of the process.

      PS – read some of the recent comments on that article I linked to above from some regretful Norbert’s Gambiteers.

  7. RichLife on April 16, 2020 at 7:15 pm

    Hi Rob,
    Im a newbie in investing. I just want to ask how do you compute the average/total MER if you have 3-fund or 5-fund etf portfolio? thank you!!

    • Robb Engen on April 16, 2020 at 11:05 pm

      Hi RichLife, no problem – here’s how to do it:

      Let’s say you have a portfolio worth $100,000 and it’s made up of 60% equities and 40% bonds. You’re using VAB for bonds, VCN for Canadian equities, and XAW for global equities.

      VAB’s cost is 0.09%. So you take the $40,000 that’s invested in VAB and multiply by 0.09% to get the total dollar cost = $36

      VCN’s cost is 0.06% and let’s say we have 20% of the portfolio invested in that ETF. $20,000 x 0.06% = $12

      XAW’s cost is 0.22% and it makes up the remaining 40% of your portfolio. $40,000 x 0.22% = $88.

      Now you add up the total dollar amounts of all three funds ($36 + $12 + $88 = $136) and then divide that by your total portfolio amount ($100,000).

      That gives you the weighted-average MER of your portfolio, which in this case is 0.136%.

      One mistake I see new investors make is adding up the MER of each fund to try and get a total cost (0.06 + 0.09 + 0.22 = 0.37%). But, as you can see from my example, it doesn’t work like that.

  8. Sam on April 16, 2020 at 10:02 pm

    Hi Robb,
    Great article (as usual). A few quick questions.

    -What does the “FTSE” part mean with the Vanguard ETFs?
    -Pardon my ignorance (I’m still confused about the Norbert Gambit stuff) but are there ETFs you can buy with Canadian currency that track US indexes (for example the S&P 500)? Investing on your own as a newbie can be challenging, so I want to keep it as simple as possible and deal with one currency (i.e. the one I get paid in, Canadian dollars).


    • Robb Engen on April 16, 2020 at 11:13 pm

      Hi Sam, thanks!

      FTSE is the Financial Times Stock Exchange (or the London Stock Exchange). It’s the index the Vanguard ETF is tracking.

      Yes, there are Canadian listed ETFs that track US and other world indexes. The ones I listed under U.S. equities and global equities are all Canadian listed ETFs that track foreign equities.

      I agree with your idea of wanting to keep things simple and invested in Canadian dollars.

      Where Norbert’s Gambit comes into play is when your portfolio reaches a certain size. U.S. listed ETFs are actually cheaper (lower MER) and avoid withholding taxes on foreign dividends (basically a 15% tax on foreign dividends), so sophisticated investors who want to lower their fees and avoid or reduce foreign withholding taxes use U.S. listed ETFs – but the catch is they have to set up a USD account at their brokerage and swap currency from CAD to USD and vice versa to purchase funds and rebalance. It’s not for everyone.

      Most investors should just stick with Canadian listed ETFs, and more specifically a one-ETF solution that takes care of rebalancing automatically.

      • Babak on August 6, 2020 at 4:51 pm

        Hi Rob, count me as a big fan. You also have a great way of simplifying complex ideas.
        Thank you so much for all you’re doing for DIY investors.

        So, building on your response to Sam’s question … I’m not seeking financial advise but would appreciate your thought on buying US issues Asset Allocation etfs. I own many individual Canadian stocks but want to move over to globally diversified cap weighted etfs. Asset Allocation etfs (VBAL, XGRO, etc) are great but I do have access to US funds in my RRSP portfolio, that is if I journal my cross-listed Canadian stocks (e.g, RY, TD, SU, etc). So, currency conversion is not a big issue. Question: What do you think of the suitability of investing a couple of hundred thousand or more USD into A.O.R .or other US ishare asset allocation etfs (instead of VGRO or VBAL). Their MERs are the same as the Canadian versions of Vanguard and pretty much the same structure of diversity albeit insignificant Canadian holdings. I mention US ishare because I haven’t seen any US issued Vanguard AA etfs (I wish there were but they most of that style of investing in their vast mutual fund s offerings which as Canadians we just can’t buy). Wouldn’t that solve the a) no need for rebalancing, and b) currency conversions after the first journaling, and c) most of the dividend withholding tax issues?
        Thank you kindly, Babak

  9. MacAl on April 17, 2020 at 9:03 am

    What great information!!

    Question from the perspective of a new investor, let’s use the same $10k initial investment example.

    During a crisis like we have now, where the markets are very volatile, and there is a tremendous amount of uncertainty about the future… would you still suggest they go to a single-ETF? Are the single-ETF holding-mixes changed when temporary opportunities or risks arise? (e.g. do they try to minimize the blow when the markets get hit, by changing their holdings?)

    Still new to this, but I’ve heard “buy low sell high”, and I think the buy low part is here/coming. 😉

    • Robb Engen on April 17, 2020 at 9:35 am

      Hi MacAl, thanks! There’s always uncertainty about the future (unless you have a crystal ball).

      Remember, these one-ticket ETFs are really a wrapper of 6-7 different ETFs that track different indexes around the world.

      They are not actively managed – they’re not changing their holdings based on market conditions.

      What they do, is maintain their target asset mix regularly by selling whichever of those ETFs have gone up and buying more of the ETFs that have gone down (rebalancing).

      This is all happening automatically behind the scenes so you don’t have to make any active decisions on when to rebalance your portfolio on your own (like you would if you were holding multiple ETFs in your own portfolio).

      Making active decisions with your investments sounds good in theory but doesn’t work so well in practice. The vast majority of actively managed mutual funds fail to beat their benchmark index each year. That’s why investors are better off just buying the index (globally) and accepting market returns minus a small fee.

  10. Sam on April 17, 2020 at 10:23 pm

    Hi Robb,
    Thank you for your response, I appreciate it. Please excuse my ignorance, but I don’t understand. For example, I want to buy the Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY) and keep things simple and dummy proof.

    1) This ETF tracks Canadian companies on the Toronto Stock Exchange with high yields.
    2) This ETF is traded on the Toronto Stock Exchange.

    How does the London Stock Exchange (The “FTSE” part) enter into the picture here if this ETF is tracking companies on the Toronto Stock Exchange and bought/sold on the Toronto Stock Exchange?

    Thanks in advance…

    • Robb Engen on April 18, 2020 at 9:56 am

      Hi Sam, sorry I should have been more clear about the role FTSE plays in regards to creating indexes for ETF providers like Vanguard to follow. This link explains it more clearly:

      It shows that FTSE creates benchmark indexes, and Vanguard (along with other ETF providers) creates ETFs that track these various indexes to provide investors with options to choose from.

      Aside from FTSE, other groups like MSCI also create benchmark indexes for ETF providers to track.

      This has nothing to do with the exchange in which these ETFs are traded. You’d still buy VDY on the Canadian stock exchange (TSX). I hope that was more clear.

  11. Darby on April 18, 2020 at 12:24 pm

    When holding investments in different accounts – TFSA, RRSP and non-registered – would the same model portfolios be ideal for all types of accounts?
    I am wondering particularly about 6 figure non-registered accounts regarding withholding taxes on foreign investments, taxes on interest income from the bond component and also calculating the adjusted cost base.
    Could you comment on a model portfolio specifically for Cash Accounts with the assumption that the individual has only a Cash Account and a TFSF but no RRSP?

    • Robb Engen on June 9, 2020 at 2:06 pm

      Hi Darby, sorry for the delayed reply. Usually it makes sense to use the same strategy and asset allocation across all accounts to keep it simple to manage. And since foreign withholding tax is recoverable in a non-registered account, then holding something like VGRO would only add an expected 0.02% in taxes to the 0.25% MER – making it incredibly tax efficient in a cash account.

      In a TFSA there is no way to recover or avoid foreign withholding taxes, so, again, the goal should be to keep things simple and an all-in-one ETF would be completely appropriate.

      It’s inside the RRSP where an investor has opportunity to save on fees and foreign withholding taxes by using U.S.-listed ETFs.

  12. ffsquared on June 9, 2020 at 1:01 pm

    Hi Rob, Great article. What all in ETF strategy and fund do you recommend for a retiree (70 yr old) who has an extra $500 a month to invest? Should I invest in a balance fund or all equity
    Currently, I’ve max out my annual contributions to my TFSA (in a balanced ETF) and have an RRSP (Tradex equity of approx $130K) that will be converted to an RRIF in 2021 when I will be 71 yrs old. Current pensions (employer; OAS, CPP) provide monthly disposable income of approx. $8K. We have no debts and own our home and an “emergency cash” fund of approx. $40K. My spouse has an RRSP of approx $100K and TFSA of $75K
    Thanks Frank

    • Robb Engen on June 9, 2020 at 2:18 pm

      Hi ffsquared, I guess I have to ask what is the purpose of investing this new money when all of your spending needs are met and you’re able to still max out your TFSA contributions each year (assuming your spouse is as well)? Is it just to add to the pile for legacy purposes?

      If there’s no specific need for this money in the short term then that certainly opens up the options in terms of asset mix – making something like a 60/40 portfolio (VBAL) an appropriate investment. That said, an all-equity ETF like VEQT could also be considered appropriate (again, assuming no need for this money) with the goal of building a long-term legacy fund for your estate. It really depends on your goals and spending needs.

  13. Sarah Garside on January 1, 2021 at 7:51 pm

    thank-you for all you have written about and provided great financial information to all.
    I am struggling a bit. I love your suggestions for an investment portfolio of over $200,000.. but there was nothing for those with over 1 million.
    I took over all of my finances to DIY in 2020. I have no tfsa or rrsp room and the majority of my assets are in my personal account and corp account. I have $100,000 in my tfsa, 800,000 in my rrsp, and the rest in my corp and personal account- over 1.2 million. I currently have 50% in cash outside of my registered accounts.
    For others in a similar position.. ie finally taking over their own money management, how do you recommend that etf’s are bought and kept in the right account for best tax efficiency?
    thanks for all your thoughts,

  14. Mary Ellen on June 15, 2021 at 2:25 pm

    I have never heard of Norbert’s Gambit, but so interesting to see how it is done at other brokerages. I use Interactive Brokers and buy/sell USD or CAD at the prevailing FX rate, which seems to be the best rate compared to what the big banks offer. I trade & invest in both USD and CAD. I keep a USD bank account & credit card at RBC and transfer USD from IB should I need the cash in USD for spending purposes.

  15. Jeff on November 26, 2022 at 11:52 am

    Long time reader, first time commenter.

    Robb, I’m trying to get down to one fund!

    I own about 3 funds in each of my accounts: rsp, tfsa and my taxable act…

    I have most of my taxable assets in VDY as I was trying to take advantage of the tax credit for the Canadian dividends. At this point I am up over $60000 in terms of a capital gains on this one fund (I happened to buy a large chunk of this in the dip of 2020). Would it be sensible to continue to hold it in the taxable account and then offset my TFSA and RSP to only hold XAW (world excluding Canada). I’m not employed at the moment (on purpose) and the $600-700 dividends / month are being put to use. (I know dividends are a bit of a farce, but it’s what I’m working with).

    I did the math and my asset mix would look like this…

    XAW (us and world) – 76% in registered acts
    VDY (Canadian dividend stocks) – 24% in taxable acts.

    This leaves me a little under diversified in the Canadian market, but it is so much simpler than my current portfolio. I’m also ditching whatever bond holdings I had, I’ve hated owning these and they have been nothing but a drag on my portfolio when the market was going up for the past decade. They have also performed poorly over the past year as interest rates have risen. I’m not sad to see them go and I’m good with volatility.

    I’m considering this and melting down the capital gain over time, would love your thoughts!


    • Robb Engen on November 26, 2022 at 6:08 pm

      Hi Jeff, thanks for your comment. That sounds pretty sensible to me and a good way to diversify your overall allocation globally.

      The “hold a single fund across all accounts” solution is great for new investors but can be challenging for those with legacy portfolios in taxable accounts. Your approach is a sensible trade-off.

  16. Mani Singh on December 2, 2022 at 5:09 pm

    What’s the best investment in non registered account?
    1. Please suggest ETFs. One ETF or those 5 you suggested?
    2. Have 200k to invest and dont want to deal with taxes and more complications.
    3. Also let me know what you would suggest? Income or Growth. I am 40 years old.

    • Robb Engen on December 7, 2022 at 4:09 pm

      Hi Mani, impossible to answer what’s best for your situation. In general, a single asset allocation ETF can make for a sensible portfolio in either registered or non-registered accounts. It’s up to you what level of risk you can handle – whether you go with an ‘EQT, ‘GRO, or ‘BAL version of the all-in-one ETF.

      That would be the simple solution. For a tax planning solution in a non-registered account, consider the Horizons’ all-in-one ETFs (HCON, HBAL, HGRO). Make sure to read this first so you understand the risks:

  17. Squirrel on December 7, 2022 at 5:42 am

    Hello, I just listened to you on the Money Saver podcast. Great episode, and thank you for your helpful post. I’m exclusively holding VEQT in my RRSP and my TFSA. There are so many ETFs to choose from that it can be overwhelming, so I love that there’s an all-in-one available. I figure when I get into my mid-50s I’ll start to buy bond ETFs or expand to 2 or 3 more ETFs. Or do you think it’s wiser to do that sooner?


    • Robb Engen on December 7, 2022 at 4:13 pm

      Hi Squirrel, thanks for the kind words. I agree, it’s great to have a sensible all-in-one ETF solution to keep investing simple.

      And, yes, at some point it’s sensible to “de-risk” your portfolio. That could simply mean selling VEQT and buying VGRO or VBAL. Or stopping your contributions to VEQT and buying a short-term bond fund like VSB. Or, stopping your contributions to VEQT and building up cash (there are even high interest savings ETFs). When to do that depends on your goals (retirement, short-term spending needs) and required annual withdrawals.

  18. The simpsons on November 10, 2023 at 7:12 am

    Hi Rob
    I’m using a brokerage account that doesn’t charge trading fees. I might as well take advantage of it.
    I’m considering a 4 fund equally divided ETF.
    All with 25% in it rebalance every 3-6 months as needed. Don’t even need a calculator, just equally divide the 4. XUU is all USA and XAW has 63% USA. This will give me a 75/25 equity to bonds (my comfort zone) with .11% MER. On top of this I will use CASH.TO for my emergency funds maybe a years worth.
    Would love to hear your thoughts on this. Keep up the good work.

    The Simpsons

    • Robb Engen on November 10, 2023 at 2:51 pm

      This sounds like a sensible strategy to me. This is similar to how I funded my kids’ RESP using e-Series funds. The one suggestion I have, and this depends on your frequency of new contributions, is to just rebalance with your new contributions – contributing to the lagging fund(s) each time.

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