I’m a big fan of all-in-one ETFs and indeed invest my own money in Vanguard’s VEQT – the 100% equity version of its all-in-one balanced ETFs. These ETFs are a game changer for self-directed investors who want to invest in a low cost, broadly diversified, and automatically rebalanced portfolio.
Vanguard was first to launch its suite of asset allocation ETFs in January 2018, and they were quickly followed by Horizons and iShares later that year. BMO got in on the action in early 2019, and this year has seen the launch of TD’s “one-click” ETFs, and finally Tangerine’s global ETF portfolios.
Vanguard’s VGRO continues to be the most popular of the all-in-one ETFs, attracting $457 million of new in-flows year-to-date. The entire asset allocation ETF category has attracted $2.13 billion of new in-flows so far this year.
Before investing in an asset allocation ETF you’ll want to first identify a risk-appropriate asset mix. These ETFs come in several flavours, but most often you’ll find a conservative (40% equities and 60% bonds), balanced (60% equities and 40% bonds), or growth (80% equities and 20% bonds) option.
The point of an all-in-one ETF is for it to truly be your one fund portfolio solution. Don’t be fooled into thinking you’re putting all of your eggs in one basket. These ETFs are wrappers that contain several other ETFs, which themselves hold thousands of individual stocks and bonds.
“An asset allocation ETF is a simple and efficient way to invest in a portfolio of ETFs that is broadly diversified by asset class and across regions, in one convenient package.”
While each asset allocation ETF provider offers a slight difference in terms of how their ETFs are constructed, which indexes they follow, and the fees they charge, the general concept is the same across the board: low cost, broad diversification, and automatic rebalancing.
With that in mind, here’s an overview of the best all-in-one ETFs you’ll find on the market today:
|ETF Provider||ETF Name||ETF Symbol||Asset Mix||MER|
|Vanguard||Vanguard Conservative Income ETF Portfolio||VCIP||20 / 80||0.25%|
|Vanguard||Vanguard Conservative ETF Portfolio||VCNS||40 / 60||0.25%|
|Vanguard||Vanguard Retirement Income ETF Portfolio||VRIF||50 / 50||0.29%|
|Vanguard||Vanguard Balanced ETF Portfolio||VBAL||60 / 40||0.25%|
|Vanguard||Vanguard Growth ETF Portfolio||VGRO||80 / 20||0.25%|
|Vanguard||Vanguard All-Equity ETF Portfolio||VEQT||100 / 0||0.25%|
|iShares||iShares Core Income Balanced ETF Portfolio||XINC||20 / 80||0.20%|
|iShares||iShares Core Conservative Balanced ETF Portfolio||XCNS||40 / 60||0.20%|
|iShares||iShares Core Balanced ETF Portfolio||XBAL||60 / 40||0.20%|
|iShares||iShares Core Growth ETF Portfolio||XGRO||80 / 20||0.20%|
|iShares||iShares Core Equity ETF Portfolio||XEQT||100 / 0||0.20%|
|Horizons||Horizons Conservative TRI ETF Portfolio||XCON||50 / 50||0.15%|
|Horizons||Horizons Balanced TRI ETF Portfolio||HBAL||70 / 30||0.15%|
|Horizons||Horizons Growth TRI ETF Portfolio||HGRO||100 / 0||0.17%|
|BMO||BMO Conservative Index Portfolio ETF||ZCON||40 / 60||0.20%|
|BMO||BMO Balanced Index Portfolio ETF||ZBAL||60 / 40||0.20%|
|BMO||BMO Growth Index Portfolio ETF||ZGRO||80 / 20||0.20%|
|TD||TD One-Click Conservative ETF Portfolio||TOCC||30 / 70||0.25%|
|TD||TD One-Click Moderate ETF Portfolio||TOCM||60 / 40||0.25%|
|TD||TD One-Click Aggressive ETF Portfolio||TOCA||90 / 10||0.25%|
|Tangerine||Tangerine Balanced ETF Portfolio||INI420||60 / 40||0.65%|
|Tangerine||Tangerine Balanced Growth ETF Portfolio||INI430||75 / 25||0.65%|
|Tangerine||Tangerine Equity Growth ETF Portfolio||INI440||100 / 0||0.65%|
You can sort the table by ETF provider, asset mix, and fees.
Again, it’s tough to definitively say which all-in-one ETF is best. Each fund provider takes its own approach to ideally achieve a similar outcome (when comparing similar asset mixes). Here’s my takeaway:
- If you want the lowest cost portfolio, go with an iShares or BMO asset allocation ETF.
- If you’re a TD customer, and use the new TD GoalAssist investing app, go with the TD “one-click” portfolios (they’re free to trade)
- If you’re looking for tax efficient investing in a non-registered (taxable) account, go with the Horizons TRI ETF portfolios
I chose the Vanguard funds because I believe in the company’s mission to take a stand for all investors and to treat them fairly. I also know that Vanguard regularly reduces its product fees and so I expect their asset allocation fees to eventually match the fees charged by iShares and BMO.
This Week’s Recap:
The TFSA new contribution limit for 2021 was officially released this week. It’s staying at $6,000, where the annual limit has been since 2018. I’ve updated my TFSA contribution limit guide to reflect the new changes and highlight that the total lifetime TFSA contribution limit is now up to $75,500.
Last week I explained why health and dental insurance isn’t really insurance – it’s an employee benefit.
Watch this week for my long-awaited post on how I changed up my approach to credit card rewards this year to maximize my cash back.
Promo of the Week:
Black Friday deals are already here and many of you will be taking advantage of online shopping as we head into the holiday season. This is a reminder to always be sure to visit a cash back rebates site before visiting your favourite online retailer. It’s a great way to collect an extra 1-5% (or more) cash back on spending you are going to do anyway.
Become a member of Great Canadian Rebates and take advantage of online coupons and earn cash back rewards. GCR features over 400 merchants to satisfy all your shopping needs.
Ebates.ca pays you cash back every time you shop online, and it’s FREE to join. Sign up now and when you spend $25 you’ll earn a $5 cash back bonus.
Our friends at Credit Card Genius are getting into the Christmas spirit and have opened their annual $1,000 cash Christmas giveaway. They’re giving away five cash prizes, so head on over and enter to win.
One of Canada’s oldest personal finance sites – Million Dollar Journey – just got a new face lift. In addition to Frugal Trader’s regular financial freedom updates, Kyle Prevost has been writing some unique stuff about moving to the desert and making a tax-free income as a teacher.
Jamie Golombek shares everything you need to know about converting your RRSP into a RRIF this year.
Larry Swedroe explains an investing truth: that for every buyer there must be a seller.
If one spouse makes most or all the financial decisions, the uninvolved spouse can be left vulnerable. Jason Heath explains why seniors, their family and their advisors should try to involve both spouses in money discussions.
Jonathan Chevreau tackles an interesting question: Should retirees speculate in the stock market?
The Economist wrote about a passive attack – how index investing is reshaping the investment industry.
Dr. Bonnie-Jeanne MacDonald says that outdated assumptions and conflicts may be guiding advice on CPP timing:
“In a way,” MacDonald said, “advisors are being compensated to tell Canadians to take their CPP as soon as possible.”
We took a look earlier at asset allocation ETFs. Here, PWL Capital’s Justin Bender takes a look at iShares’ new ESG ETF portfolios:
Morgan Housel continues to write some incredibly thought-provoking articles – this one on the big lessons from history.
Of Dollars and Data blogger Nick Maggiulli explains how to save for a big purchase.
Rob Carrick answers a question from a reader who is on the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness.
Gen Y Money asks, do you need mortgage insurance? Likely not from your bank.
Michael James previously wrote about why owning long term government bonds is crazy, and followed up with a four question bond quiz.
Andrew Forsythe shares why he changed his free spending ways to become “cheap and proud”.
Finally, Rob Carrick interviews retirement expert Fred Vettese on low rates, when to start CPP, and millennials in love with stock trading.
Have a great weekend, everyone!