The Best All-in-One Exchange Traded Funds
What are some of the Best All-in-One Exchange Traded Funds (ETFs) to own?
How can some of these All-in-One ETFs make investing better for you?
My investing approach
Passionate readers of this site will know I take a “hybrid approach” to investing:
- I invest in a number of Canadian dividend paying stocks for long-term growth and income.
- I also invest in some low-cost Exchange Traded Funds (ETFs) for additional diversification.
This approach has worked very well for me/us in terms of meeting some of our future goals:
- We can own individual stocks from mostly Canada, skim low-cost ETF like XIU, to earn income and growth for the future; companies that we want to be in shareholders in, and
- We stay lazy and invest in some low-cost ETFs for growth at the same.
Here is a quick snapshot, just a point in time too, of just some of the Canadian stocks we’ve owned in recent years and bought more of: a mix of dividend growers, capital appreciation stocks and just for good measure…we continue to own even one company that cut their dividends recently too!
Sources (above and below): Portfolio Visualizer.
Portfolio 1 (XIU benchmark – blue line) vs. Portfolio 2 (basket of some of my stocks over a select time).
Your mileage including your stock mix or ETF mix or both, your returns, your holding periods may vary. This is just for simple illustrative purposes and not exactly my returns although I do own every stock above at the time of this post – including since Jan. 2017. 🙂
Where I’m going with this is not everyone is like me/us.
While I accept all forms of investing and discussions on this site, I do confess and fully realize that folks who might be new to investing and/or experienced investors might not invest the same way.
With that mentioned, there has never been a better time to be a DIY investor in my opinion.
First up, some reader comments in the past to me on this subject worth sharing….
I know you like buying and holding Canadian banks, utility companies and more for income. It seems to be a great way to invest but I have to be honest – doing so on my own seems overwhelming to a new investor like me. What if I get it wrong and mess things up? I’m thinking some of these new low-cost all-in-one ETFs might be right for me. Do you have any posts on these funds?
Love the site – what’s your take on Vanguard’s new all-in-one funds? Do you think other companies are going to follow suit?
I’m a fan of the Vanguard all-in-one portfolios which I know you’ve covered before (VCNS, VBAL, VGRO). When they were launched, I was surprised they did not include an all-equity solution since it would help those who have taxable accounts but don’t want a fixed income drag there. Well, looks like they finally launched VEQT.
If you look at the total assets on Morningstar you will see VGRO’s $570.9bn exceeds VBAL ($392.0) and VCNS ($140.1) combined, so the market clearly favours a more aggressive tilt to these equity funds.
I wouldn’t encourage most investors to go 100% equity, for those looking for tax efficient allocations or who prefer not to have to rebalance a portfolio of individual ETFs (leading to market timing) I think the all in one funds are a great idea, and in my view, might even replace some advisor services. Thoughts? Maybe your take on these funds?
Great emails and great questions. Keep them coming!
In previous posts on my site I’ve discussed how many ETFs are enough, maybe a handful at best.
Well, given our recent wave of All-in-One ETFs on the market, the answer for you might be just one ETF.
There is beauty in simplicity: why All-in-One Exchange Traded Funds work!
Essentially, other than making regular investment contributions into these products within your accounts, these one-fund solutions do all the work for you.
- You no longer need to worry about getting fleeced by high fees by your financial advisor. You’ll see below that these funds have very low management costs.
- You no longer need to worry about portfolio re-balancing. These funds are designed to keep a particular asset allocation in-check for you.
- You no longer need to worry about asset location – what funds to put where and why. These funds are designed to be held in registered accounts (RRSP, TFSA, RESP, RRIF, and more) and non-registered accounts alike, although some funds might be a bit more tax efficient than others.
- You no longer need to fret about your risk tolerance or think about market timing. This is because the fund’s regular re-balancing act (for you) I mentioned above will keep your desired risk level in line with your investing goals.
- You no longer have to worry about your diversification. For some of these funds, you can obtain broad global and fixed income exposure as you wish to reduce investment risk while increasing your long-term return potential.
Let’s take a quick look at some of my favourite All-in-One ETFs to see the pros and cons of each product and what could work for your investing needs.
Vanguard All-in-One ETF solutions
Vanguard has always been a low-cost investing leader and they continue to prove it time and time again…
(All images from Vanguard Canada’s site.)
- A “traditional” balanced fund – 60% stocks, 40% fixed income – long-term investing to weather any markets – up or down.
- A great product for younger investors with a multi-decade investing horizon – holds 80% stocks, 20% bonds – so investors can take advantage of long-term equity growth from companies and countries from around the world.
- Could be a great “set and forget” product for TFSA and RRSP for any 20- or 30-something.
- 100% equity, an aggressive fund, great for investors who might have a workplace pension and/or other fixed income assets who might wish to ride stock market returns from around the world while avoiding portfolio re-balancing on their own.
iShares All-in-One ETF solutions
These XBAL and XGRO iShares funds are designed to compete with VBAL and VGRO above and are some of my favourites to consider owning.
(All images from iShares Canada’s site.)
- A fund of 8 iShares funds.
- Management fee of 0.18%.
- Designed as “traditional” balanced fund of ~ 60% stocks, 40% fixed income.
- Another fund of funds.
- Management fee of 0.18%.
- Designed as a more aggressive mix of stocks and bonds (80% stocks, 20% bonds) – for long-term equity growth from markets around the world.
- One of my favourite funds because it has a lower Canadian exposure than VEQT.
- Another fund of funds.
- 100% equities.
Need an ex-Canada All-in-One equity solution? Look at XAW
- Invest beyond Canada’s borders to own companies from around the world.
- Easy, simple global portfolio diversification without Canada – whereby you can buy and hold Canadian stocks at your leisure.
- Low-cost way to own U.S., international and emerging market stocks.
- A low management expense ratio of 0.22%
- 100% equities.
- Disclosure: I own this fund have done so for years.
BMO All-in-One ETF solutions
Not to be outdone…Bank of Montreal (BMO) has a few great, low-cost risk-based asset allocation ETFs to challenge the Vanguard and iShares funds above.
(All images from BMO’s site.)
- Another fund of 7 BMO funds and cash.
- Management fee of 0.18%.
- A more aggressive fund for growth that targets exposure of 60% equity and 40% fixed income.
- Another fund of 7 BMO funds and cash.
- Management fee of 0.18%
- A growth-oriented fund designed to take advantage of an investors’ long-term holding objectives; 80% equity and 20% fixed income.
Horizons All-in-One ETF solutions
And finally, let’s bring in Horizons ETFs.
Marketed as their “family of TRI Portfolio ETFs” to “help take the guesswork out of building an index ETF portfolio” – these are absolutely ones to consider. Better than potentially the products above, these TRI ETFs are tax-efficient and can offer after-tax benefits if held in taxable or non-registered accounts.
Let’s have a look at their key funds.
(All images from Horizons ETFs site.)
Horizons Conservative TRI ETF Portfolio (HCON)
- HCON invests primarily in Horizons Total Return Index ETFs* (“Horizons TRI ETFs”). The portfolio targets a long-term asset allocation of approximately 50% equity securities and 50% fixed income securities at the time of any rebalance. The portfolio will be rebalanced semi-annually.
- Because of this asset balance, this fund is for the conservative investor I believe.
Horizons Balanced TRI ETF Portfolio (HBAL)
- HBAL is designed to compete in the same ballpark as VBAL, XBAL and ZBAL.
- It provides a one-ticket-ETF solution that targets a long-term asset allocation of approximately 70% equity securities and 30% fixed income securities, and rebalances semi-annually.
Horizons Growth TRI ETF Portfolio (HGRO)
- Despite the “GRO” name, HGRO is a 100% equity product.
- This fund seeks long-term capital growth using a portfolio of primarily equity-focused total return index exchange traded funds.
- This product could be a game-changer in that with HGRO taxable distributions are not anticipated. Instead, distributions compound and lead to tax-deferral benefits until the asset is sold. Something to consider for non-registered investing for sure…
I had a great interview with Mark Noble about Horizons ETFs you should not miss out on.
Best All-in-One ETFs summary
As a passionate buy-and-holder of many Canadian and U.S. dividend paying stocks, as well as a couple of low-cost ETFs, I’m not quite ready to switch to one All-in-One fund for my entire portfolio.
Some of these choices are however very compelling to me; I might eventually re-think how I’m investing especially beyond Canada’s borders including owning more HGRO in particular.
Amongst all of them, I’m a big fan of 100% equity funds above since I have a big bond in my portfolio already.
That means I would have a bias to owning HGRO in particular, or XEQT, VEQT or XAW as secondary top-choices for most of my portfolio over time if I ever had to choose just one ETF, a desert island pick if you wish.
If I ever decide to move away from my basket of Canadian and U.S. stocks for higher income growth, those are the asset allocation funds I would gravitate to: HGRO, XEQT, VEQT and some XAW.
Here is a summary table to start your research with my favs. in bold:
|Fund Mix (Equities / Bonds)||Vanguard Canada||iShares||BMO||Horizons ETFs|
|All Equity (100/0)||VEQT||XEQT||ZEQT||HGRO|
|Ex-Canada (100% equity)||VXC||XAW|
To invest in equity-only ETFs or high-growth ETFs you’ll need to become an investor who has learned to live with stocks.
If you’re a new investor, tired of paying pricey mutual fund fees and tired of costly financial advice for investing it might be time to switch into any one of these funds. In doing so, you’ll undoubtedly keep more of your hard-earned money and you will likely earn better returns over time since paying fees is forever money lost…
Here is my older primer on self-directed investing 101.
If you’re an experienced investor, it might also be time to switch anyhow. While you can use a few individual ETFs to be more tax-efficient across your portfolio (e.g., by putting Canadian equity ETFs in your TFSA; by putting U.S. equity ETFs in your RRSP or LIRA) – see why here – using one ETF to rule them all could be an easy, diversified, low-cost way to invest without any re-balancing effort.
Invest regularly and stay the course!
What’s your take on the wave of new all-in-one ETFs? Fan? Not so much? Tell me (and others) in a comment!
Thanks for reading,
Can you tell me is Vanguard VDY is an “all-in-one” ETF.
I’m a new investor in VDY and certainly love the monthly dividends.
Thank you Mark
VDY isn’t considered an all-in-one ETF because it does not include “a world of stocks” nor any fixed income like bonds, it only includes some Canadian stocks and even then, VDY has a screen just for certain Canadian stocks that pay a higher yield.
Remember that yield (income) and growth (price gains) are two sides of the same coin so essentially you can’t get lots of both. There are tradeoffs. So, if you get higher yield then usually you get lower price gains. Vice-versa.
I hope that helps!
More reading here too:
What are your thoughts on a ETF from Harvest -HTA Harvest Tech Achievers Growth & Income for Retired income seekers. Pays a monthly 9% dividends and has an annual return since inception 06/2017 of 14% and yes MER is high at .98%. But over all return I believe it’s justified?
Great comments as usual, Mark. There is a relatively new ETF called ANEW, the Pro-Shares Transformational ETF encompassing some 175 stocks. Their aim is to focus on future innovators that will transform the way we do things. It looks very appealing and growth oriented. It’s virtually impossible to say there is one best ETF on the market. For me personally, a few of the top ETF’s like Vanguard, ARK families, etc, are the best way to go and invest.
One side note is the increasing attention being paid on crypto currencies. The crypto world has attracted the attention of the billionaires and the large institutions with their larger and larger investments. May be this is the new wealth creation!!!! What are your thoughts? Thanks for your input and comments.
Good luck in your investing journey.
ANEW – interesting ticker Ken! Will read up on that one.
Ya, simple is good. VTI, XAW, or if you wish VEQT and others and go. Let those ETFs DRIP for as long as possible and wake up wealthy.
As with crypto, we’ll see. It might increase more over time for sure but I prefer investing in more real assets and tangible stuff for the most part – things people can’t live without. I also don’t like supporting the crypto machines too much (absolutely terrible for the environment). It will be interesting to look back in 10-20 years and see what happens!
Thanks for the kind words!
Good advice. But ain’t u heard? People have no patience with time being their wealth builder?
Ha, very true Bob. All about instant gratification!
Thanks for this post. Would you consider an all in one ETF like VGRO or XGRO as good one to hold in a non-registered account? I feel like unless you go for swap ETFs, you will be taxed regardless of what option you choose in this type of account.
Thanks and keep up the good work!
I think a set and forget VGRO or XGRO or any “GRO” fund is very smart for anyone that doesn’t want to worry about rebalancing or stock picking decisions!
Hey Mark I been reading you blog for sometime now and I think you are doing a great job! ishare has now all equity portfolio XEQT just like Vanguard VEQT. I like ishare because of theirs slightly lower MER!
What’s your opinion on this new fund.
Thanks very much 🙂
OJ – I’m a fan of VEQT for folks that want to keep things very simple.
I haven’t written about XEQT but as a fund of iShares funds, very similar structure.
I like the MER for sure and the 25% allocation to Canada seems about right for most passive investors!
Seems like a great new all-in-one fund I need to write about 🙂
Hey Mark, Big fan of all in one Vanguard ETF’s
I’m retired have 100K RRSP to invest and won’t need money
for 10yrs. I like VEQT, but leaning to VBAL for safety, any thoughts
would be appreciated. Thx. Sidd
Both are different for sure Sidd (VBAL is more balanced) but if you fear any major stock market calamity, likely a “BAL” fund such as VBAL or XBAL or ZBAL might be a better risk adverse fit. Have you assessed that – your risk tolerance?
Hey Mark, I like the all in one etf, How about a small portion for Vanguard VRE? Thx. Sidd
Nothing wrong with VRE. Great fund for 5-10% of the portfolio I think!
I like XRE and ZRE for REITs as well but I’ve decided to unbundle my Canadian ETF for income:
Thanks, well, like I said, that’s my situation straight to the point nothing more or less and free to move in any direction. This thought came to mind from the newbie research I’ve been doing and I guess was just looking for some validity, it feels right though without having to get too involved in a system I moderately understand..
Thanks for checking in and all the best to you too Mark, Peace!
Millionaire Teacher by Andrew Hallam is a great book on indexing, low-cost ETFs and provides a great read for lower-cost investing and why.
Check that out since for $20 it might provide much more validity related to an all-in-one fund. Cheap cost for a big decision. I’ve had Andrew on my site a few sites, use the search or archives to find articles. He’s an interesting dude and is passionate to help retail investors.
Hi, Believe it or not that title rang a bell and when I checked my shelf it turns out I have it. When I first started dabbling around looking for info a few years ago, I bought it off Amazon. In fact it’s the only book I ever bought since there’s so much on the Net. Apparently I bookmarked and stopped reading it at page 33 (Rule 3 – Small Percentages Pack Big Punches). But now I definitely have a renewed interest! So thanks again Mark.. glad I messed around with some queries in the search engine the other day and came across your site. The clean/ simple design and your decent responses to others made it comfortable to reach out and shoot you a message. Love coming across sites like yours, Regards.
Sweet, love the feedback VanDex – thanks! Mark
Hi Mark – straight to the point. 50 yrs. old, newbie – I have $250,000 in bank savings, $65,000 in a TFSA, no debt, no investments and mortgage free. I was thinking of transferring the $65,000 TFSA into an online broker account and buying VEQT and maxing out the TFSA contribution room each year for the next 20 years. The remaining savings could be used for having cash on hand in a 2-3% savings account to help supplement income since contract work is up and down. Sound reasonable? Thanks for your website!
Geez VanDex – I can’t offer advice for many reasons and wouldn’t without knowing far more details but I can say, maxing out for you TFSA is always a GREAT thing and using an all-in-one is a very easy set-and-forget long-term solution that should deliver (without investor tinkering of course!) 6-8% returns over the next decade or so!
If your work is up and down – definitely consider stashing some cash in an emergency fund but ultimately your call!
Awesome work on debt-free and no mortgage. You’re in charge!
All the best,
The i shares XBAL has out performed both Vanguard VBAL and the BMO ZBAL. I am considering using this all in one product and wondering if I should purchase all three. I will be selling my current portfolio of ETF and Mutual Funds and plan on purchasing both Candian Dividend Stocks (50 percent) and the rest in the all in one ETF. I am retired and like this approach. Your thoughts.
Hey Kerry these funds track almost identical indexes. Owning 3 -BAL funds defeats the whole purpose of an all-in-one fund; you’d be better off switching to a 3 fund like ZCN/XAW/ZAG for lower fees if you prefer owning 3 separate ETFs.
Certainly a 3-fund ETF portfolio might provide more opportunities to rebalance and be a bit more strategic when it comes withholding tax efficiency but given that work involved, I personally think for any newbie investor or experienced investor that doesn’t want those headaches some of these all-in-one funds are ideal. Set, save, invest and forget.
Don’t you bear double fees in this scenario – 0.25 with VGRO + whatever fees each component fund charges?
For withholding taxes Anthony – yes – just like other Canadian ETFs that hold U.S. or international assets but underlying fees associated other money management and portfolio re-balancing charges – not to my knowledge.
Great post Mark. Wondering if you have a favourite provider for One Ticket? I know they are all quite similar and the fees will not determine the total return winner over time. The fees are all quite close. The subtle asset allocation differences will determine the total return ‘winner’ and the creator of the best risk-adjusted returns
Wondering who you and your readers would choose as a favourite and why.
For US holdings. Keep in mind that iShares US does have US dollar One Ticket options as well.
I’m a huge fan of the “GROs” for many investors and I might even consider a VEQT for myself – for the reason I put into the post.
Time will tell! 🙂
Good point those products are available at US side of Ishares. That could work great for me to replace my US & int USD$ etfs now leaving our CDN stocks intact and keeping a desirable allocation mix with something like AOR however….I’m less crazy over not holding mostly CDN bonds(am gravitating to mostly gics currently), I don’t like my fees doubling, and don’t like income generated being cut significantly. Simpler, yes, better….not so sure for us. But I’m not ruling it out completely for the future.
You’re right asset mix could be a differentiator. Trouble is no knows in advance what’s better. Seems to me fees are known and may be the most important factor deciding which, although a very small difference anyhow.
Hi RBull, yes the fees are almost exact and will be eaten up by the asset allocation in a heartbeat. The Tangerine Portfolio at 1.07% essentially matched the Canadian Couch Potato Model Portfolios in 2018.
Simplicity won. They probably beat all of the lower fee Robo’s.
All said, I’m a fan of Vanguard with the addition of foreign bonds. Plus they have the 5 risk levels.
Not quite following what you’re saying on Vanguard and foreign bonds. Which etf are you suggesting?
5 risk? Are you referring to their chart showing risk level.
Yes, simplicity has its place.
Compared to PWL model 60/40 my portfolio lost a bit to them in 2018, but beat them 3 yr, 5yr and 10yr, but not by much.
Great article Mark. Thanks for putting the time into creating each article. Love watching these financial companies now competing to create better products. Choices of where to put your money are overwhelming. It will very interesting to see how these new ETF’s from Vangaurd do and how they pressure the banking giants to respond. The more diversification through various financial products you take the better you protect yourself but the poorer your returns will likely be. You can end up watering down everything. It’s hard to find that balance. Simple is better and for now I choose to remain stick with my DGI plan. Find that I am becoming addicted to the dividends.
I think that’s what makes these new all-in-one ETF choices – even though there are a few of them more appealing. Most investors have no time or inclination to re-balance their portfolio.
Heck, I love investing and it’s hard to keep track of stuff to ensure beyond VYM, other, I do not exceed 5% of my portfolio with any 1 stock.
As I get older, I’m learning simple is better and avoiding complexity usually is the best recipe for many of life’s lessons 🙂
For now, my dividend portfolio is rather simple, and growing, every month. Don’t fix what isn’t broken either!
And VYM is US listed. It qualifies for the US Canada reciprocal tax treaty – return of dividend withholding taxes if held in an RRSP account. Canadian listed ETFs (wrap products with US) do not is my understanding.
Yes, VYM is U.S. listed and that is one of my U.S. ETFs. 3% yield and growth like VTI. Hard to beat for 0.08% MER!
CDN ETF wrap products are subject to withholding taxes – for those U.S. and international assets held within the product. There are a few great white papers about that from PWL.
Thanks for being a fan!
HI mark, you made my night reading ur post about etfs.. I basically own the same Canadian dividend stocks you own and 2 etfs vgro & vfv, I’m debating about buying VEQT but I have vgro and its 80% equities vs 100% equity of VEQT . I was looking at the 2 etfs you own vym & hdv, Is it good to Own atleast 1 American etf? I’m just stumped at what one I should buy….there’s so many etfs out there.
I gravitated to VYM and HDV for both income and growth. I love the low fees as well. 0.08% each. I own these to be tax efficient (inside RRSP). In the coming years we’ll see what I decide re: VEQT or a “GRO” ETF. All great choices!
I meant XWD. (Fat fingers)
What is the difference between VEQT and XWF or XAW?
From what I can see, VEQT is 4 Vanguard funds 100% stocks; 40% US; 30% Canada, the rest international.
iShares XWD is much more of a world fund – only 3-4% Canada – representing largely the world markets. IVV ETF (S&P 500 ETF) is about 60% of the XWD fund so largely as the U.S. market goes, so goes the XWD fund. MER = 0.47% as well.
iShares XAW is an ex-Canada fund (no Canadian component) so you’re largely betting on everything else. It’s a fund of 6 iShares funds for those that already own Canadian funds/stocks. It also owns about 45-50% of IVV ETF (S&P 500 ETF). MER = low 0.22%.
Hope that helps!
Hi Mark. I have put my husband’s TFSA entirely in VGRO because I don’t want to take a lot of time to manage it. Plus, he should be able to deal with it himself in case I get mowed down by a snowplow on one of my walks :).
Ouch but I get your point 🙂 I think any of the “GRO” funds are great automatic asset allocators for buying, holding and simply adding to the fund over time. Very sleep easy investing. Thanks Marie!
Thank you Mark. As usual your info comes at a time where I am addessing similar concerns. The new ETFs you have described might be just the ticket for my portfolio. I maintain a 60% equity and a 40% fixed income split and rebalance perhaps twice a year depending on the market. The trick is not the equity portion but the fixed income. I am tired of chasing GICs and their low rates. In addition, due to the volatility of the market, I do not believe in locking in my cash or cash equivalent side in any long term GIC. This means I have several of them coming due at different times and I have to go through all the research all over again. I am retired so it is important to keep a good foundation to ride the ups and downs of the market. So after having an emergency fund and a cost of living fund equivalent to 3 years of living expenses, I am looking for simplicity. This might be it
I think these “BAL” or “GRO” funds offer excellent options for many types of investors – including anyone that wants simplicity.
I have a bias to dividend investing (and some U.S. ETFs as you might know from the site) but it might not always be that way. If things change, I could definitely see myself investing in a VEQT for me given I have a small company pension in my future to offset any bond allocation owned personally.
The thing I think about is my cash position. How much of an emergency fund would a retiree need with a “BAL” or “GRO” product? Maybe 1 year or so worth? That’s my thinking – a cash wedge of 1 year’s worth of expenses (say $50K or so) and then a “live off dividends” approach.
I think an emergency fund/cash wedge of 3 years is very, very healthy and likely very solid approach – conservative when it comes to investing is usually very good!
Yes, these are great options for plenty of people, for lots of reasons you’ve outlined. I’ve been really thinking about this myself, to simplify but there are many, many issues for those having already accumulated considerable assets. I’ve done a bunch of number crunching and scenarios to figure out how this might work for us at some point.
Interesting at my broker RBCDI the BMO ones show but no information or any details whatsoever are shown- not available to buy. Too new?
The Vanguard ones are MER .25, I believe BMO is .20 and shockingly Ishares XGRO was ME .18 and MER .80, XBal .18 and MER .75.
Very strange indeed as RBC and ishares teamed up to market these funds. Hopefully this is wrong and RBCDI is not gouging. Would be curious to hear what other brokers charge on these ishares products.
The BMO products are very, very new. As in a week old I recall. I wanted to post this article to get ahead of the curve.
Yes, good point on the MERs being a bit higher than the just the management fee.
I’ve considered a VEQT or other for my portfolio but I’m just not there yet. I could see myself considering a “GRO” product in the coming years to simplify my wife’s portfolio for ease of use. Then again, I love my dividend paying stocks. It’s a mental block mostly but the companies I own raise their dividends often.
I need to write about my ultimate dividend ETF as some point!
I figured that’s the case with BMO funds.
It’s the RBC ishares ones that were crazy. Curious if you check them out at your broker.
I don’t know I’m there yet. I was doing all my figuring based on keeping my CDN stocks, how that affected geographic and asset allocations, and how much FI (cash HISA or equiv etc) I would need to keep. That’s why VGRO or more likely VBAL because equities would be boosted by CDN stocks, but it’s tough to make this work sensibly. In my modeling, with VBAL my costs would go up a lot -nearly double, income generated down by over 10%+ as far as I could accurately calculate (but not a deal breaker with a total return mentality), I would lose the non hedged large exposure to the US I like etc. I did my own calculations and question the yields mentioned on ishares. So definitely some issues for me, but I definitely like the ETF simplicity part, but getting there is complicated.
Definitely a mindset shift I would have to make with a more total return approach vs. my cashflow approach. I’m not interested in that change right now and I suspect my CDN portfolio will continue to increase dividends over time. That said, as I get older, simplicity might be good for me hence the consideration of a VEQT in my RRSP at some point for just growth and no currency exchanges to worry about.
That mindset is hard to change, but I know for us ultimately it’s the correct path.
You can tell from my answer above I also like my CDN dividend co’s.
I agree there’s going to be more all in one choices coming. Maybe that all in one dividend etf will come.
At some point we will change for simplicity. When?
I will know it when I see it but a global all-in-one dividend ETF under 20 basis points with at least 4% yield would be nice 🙂
Might be a tall order on both the yield and the costs, but who knows.
Thanks for posting this, I’m a big fan of these for sure. I agree with all your points about the benefits. Another benefit for those with smaller portfolios is that they bring down the point at which these ETFs are more cost effective than index mutual funds – a single trading commission to purchase rather than 3-5 with individual ETFs. For those with larger, taxable accounts, they simplify keeping track of ACBs.
It’s nice to see BMO and iShares launch their versions of the portfolios Vanguard initiated. Time will tell if Vanguard will need to be more aggressive in their fees to maintain the lead. I was surprised when Vanguard’s lineup was launched that there was no 100% equity solution offered since aggressive equity options are a standard in fund of fund solutions. Now that it is here, I expect to see BMO and iShares have to catch up again.
I think for investors worried about all the things I wrote about in the post – it’s really hard to go wrong with any the of the “GROs” BB.
I love the fact that BMO and iShares offer some competition.
I fully expect to see more all-in-one solutions in the future – other companies would be smart to offer an all-in-one dividend ETF 🙂
Best wishes and thanks for being an insightful fan.
Agreed about the dividend portfolio!
For those looking for retirement income (vs. total return growth) a dividend growth portfolio would be fantastic. I guess that would no longer be a passive index but would need to be some rules-based approach. And unless the Cdn component could qualify for preferential treatment, it probably wouldn’t be as advantageous as building your own.
I am interested in these funds, but as i already hold funds, i am freaked out at the thought of selling all my funds and rebuying. How do you know when a good t ime to pull the plug is?
To be honest Christina, there is never really an ideal time to sell assets or buy assets – since if we could all predict the future – we’d all be very well off.
That said, this post was not meant to encourage every reader to change their game plan but rather re-evaluate it and consider all-in-one funds – to see if such products are right for them. Do you struggle with re-balancing your portfolio? Portfolio asset location? Do you spend time worrying about your portfolio including when to buy or sell? If so, such funds could be a decent candidate for you.
Many articles suggest to re-balance your portfolio quarterly or semi-annually. So, if you feel these fund might suit your investing objectives better, you could consider selling existing assets quarterly and buying the new fund around the same time. By doing so you’ve essentially created a plan to turnover the portfolio; and in the process, you might worry less about “selling high” and “buying low” since barely anyone ever can get that right!
Thanks for putting them together. I have just started direct investing and decided to invest passively. I have great respect for the moderates teaching to avoid the temptation to bit the index. I started with VGRO, (wanted something like VEQT, which was not available then).
Starting this year, however, I have started buying actively too, like some TD and ENB. I am going active for dividend income in the first place. But there are other reasons, too. The ETFs are not DRIP eligible, which makes me pay commissions each time I plan to reinvest. More, the ETFs do not have any options, so no additional income.
Overall, however, life is simpler with VGRO, perhaps switching to VEQT.
Happy to put this together for investors. We should all be aware how high financial fees can kill portfolio values over time!
I could see myself going with VEQT eventually (to simplify things for my wife actually – priority #1 = happy wife, happy life) although for now we’ll continue to own VYM, HDV; our U.S. stocks, and our 30-odd individual CDN stocks. The ability to reinvest dividends and distributions suits me well PD.
Thanks for being a fan.