Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

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.

Story continues below advertisement

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 (VGRO-T) has assets of $2.2-billion, with the second-ranked iShares Core Growth ETF Portfolio (XGRO-T) at $766-million and third-ranked BMO Growth ETF (ZGRO-T) 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 (FIE-T), 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 (VRIF-T), which targets a distribution rate of 4 per cent and has an MER of 0.33 per cent.

If you hate bonds …

Story continues below advertisement

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 (CSAV-T), Evolve ETFs (HISA-NEO), Horizons (HSAV-T), Purpose Investments (PSA-T) and Ninepoint Partners (NSAV-NEO).

If you’re looking for socially responsible funds …

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

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies