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It used to be possible to reassure investors swamped by the selection of exchange-traded funds by telling them to just focus on asset-allocation ETFs.

But the ETF population of Canada has ballooned to the point where there are 50 asset-allocation funds, also known as balanced ETFs. That’s a considerable number, even if it’s just 4.8 per cent of the total 1,050 ETFs listed on Canadian exchanges. Asset-allocation ETFs give you all or most of a balanced portfolio in single purchase. At their best, they’re a marvel of cost-efficient, low-effort investing.

Here are four points to consider when choosing between those 50 asset-allocation ETFs. All data come from the latest ETF Handbook produced by National Bank Financial.

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If you like to follow the crowd ...

Vanguard introduced asset-allocation ETFs to the Canadian market a little more than two years ago and is the leader as measured by assets in most subcategories by far. For example, The Vanguard Growth ETF Portfolio has assets of $2.2-billion, with the second-ranked iShares Core Growth ETF Portfolio at $766-million and third-ranked BMO Growth ETF at $80-million. Vanguard also leads in all-equity, balanced and conservative portfolios.

If you want the lowest fees …

Vanguard leads in assets but not fees. The management expense ratios for its funds come in at 0.25 per cent, while BMO and iShares are at 0.2 per cent. MERs run as high as 0.91 per cent for some products, which seems high for portfolios where a substantial portion would typically be in bonds.

If you want income …

Several long-standing income-oriented ETFs have been classified by NBF as asset-allocation funds. These funds may not be suitable as your entire portfolio, but they do provide the service of packaging a variety of income-producing investments into a single convenient package. The king of income ETFs is the iShares Canadian Financial Monthly Income ETF, with assets of $839-million and a bloated MER of 0.96 per cent. In fact, many of the yield-focused ETFs have extremely high fees. An exception is the Vanguard Retirement Income ETF Portfolio, which targets a distribution rate of 4 per cent and has an MER of 0.33 per cent.

If you hate bonds …

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There are three all-equity ETF portfolios on the NBF list, from iShares, Horizons and Vanguard. They provide exposure to stock markets in Canada, the United States and beyond (including emerging markets). A thought for bond-wary investors who still want some diversification: Hold an all-equity portfolio and a high-interest savings ETF as a bond alternative. NBF lists five of these cash alternatives, all with MERs of 0.17 per cent and below. Providers include: CI Financial, Evolve ETFs, Horizons, Purpose Investments and Ninepoint Partners.

If you’re looking for socially responsible funds …

BMO Balanced ESG ETF is an asset-allocation product with holdings selected using ESG criteria – environment, social and governance. There are four iShares offerings as well.

-- Rob Carrick, personal finance columnist

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

The Rundown

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Home Capital and other Canadian mortgage-lender stocks have surged, but mind the housing-bubble talk

Opining that Canada’s housing market is in a bubble is a popular activity right now – but the stock market doesn’t appear worried. Financial stocks with direct exposure to mortgage underwriting and lending have rallied sharply over the past year during a resurgence in home-buying activity and rising home prices. Home Capital Group Inc has risen 88 per cent over the past 12 months. First National Financial Corp is up 115 per cent and Equitable Group Inc is up 148 per cent over the same period. If the bubble talk is on the mark, it raises the question of whether such stocks are in a precarious position. David Berman takes a look at what the future may hold.

Rob Carrick’s 2021 ETF Buyer’s Guide: Best International & global equity funds

Finally, a reward for adding stocks from outside North America to your portfolio. As you’ll see in this latest installment of the 2021 Globe and Mail ETF Buyer’s Guide, returns in the past year for international and global equity funds were uncharacteristically excellent. Rob Carrick reviews the best options for investors going forward.

Global bond rout not over, another sell-off likely before mid-year: poll

Another bond market sell-off is likely in the next three months following the recent rout in financial markets, according to analysts polled by Reuters, although they did not predict a runaway rise in sovereign yields.

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Quarter-end rebalancing could present headwinds for Wall Street

Part of the reason why U.S. stocks are struggling for a second straight week may be quarter- and month-end rebalancing by pension funds, which could also keep pressure on equities through the end of March next week.

U.S. bank profits may leap, then fade, as investors look under the hood

Big U.S. banks are on track to produce blockbuster first-quarter profit gains, but enthusiasm might fade when investors look under the hood.

Recharged: Energy sector seen as big winner on Wall Street after disastrous 2020

Energy companies spent the first quarter of 2021 recharging from a draining year. Wall Street expects that growth to continue as energy companies and many of the other companies beaten down by the virus benefit from the vaccine push aimed at bringing the pandemic to an end.

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U.S. infrastructure bill could fuel stocks, but investors temper enthusiasm

A U.S. government plan to upgrade the nation’s infrastructure could further fuel the stock market’s rally, but skepticism about a massive spending package navigating political obstacles and the speed of any benefits filtering into the economy stand to temper any enthusiasm.

Others (for subscribers)

The highest-yielding stocks on the TSX, plus risk data

Friday’s analyst upgrades and downgrades

Friday’s Insider Report: Director invests over $600,000 in this stock as it rockets to a record high

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Thursday’s analyst upgrades and downgrades

Number Cruncher: Growing U.S. economy could be a tailwind for these eleven TSX-listed industrial stocks

Number Cruncher: Looking to augment your core portfolio? Check out this small but winning Canadian fund category

What’s up in the days ahead

Are you a dividend growth investor worried about rising bond yields cutting into your returns? John Heinzl will have some reasons for optimism this weekend.

Quarter-end tug of war: World market themes for the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.

Compiled by Globe Investor Staff

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