Best All-In-One ETF Canada 2023

Many Canadians prefer investing in ETFs because of their low management fee and diversification. ETFs now exist for every asset class and sector. The dilemma is to choose the right ones to build your portfolio. The all-in-one ETFs respond directly to this need. By buying one ETF, the investor can have exposure to various types of assets. It does not require rebalancing because the ETF manager takes care of this for you. These features make all-in-one ETFs the best ETF in Canada in 2023.

So, it’s simply a matter of choosing one and holding onto it. The all-in-one ETFs are marketed based on the investors’ tolerance to risk. There are 3 main types: Conservative, Balanced or Growth. The percentage allocation is pretty consistent across issuers except for Horizons all in one which has an oddly different allocation for each profile risk. The balanced portfolio would be ideal for passive investors looking for a steady income of both dividends and interest earned on fixed-income products.

Note: If you not yet familiar with ETF’s, please review our previous post ‘What’s an ETF

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There are 4 main issuers in Canada:

  • i-Shares they pioneered the all in one ETF offering in Canada since 2007;
  • Bank Of Montreal BMO;
  • Horizons
  • Vanguard 

When comparing historical performance, please pay attention to the allocation Equities/Bonds because it might be different from one issuer to another for the same profile. Horizons for example has an odd allocation. The Horizons conservative portfolio is 50% Equities which not the norm for such type of portfolios.

How to choose the best All in one ETF portfolio?

You have first to determine your risk profile. Risk profile is established by answering two questions:

  • The term: are you saving for the long term? Or short term?
  • What is your risk tolerance? Every ETF can go up and down in value. What percentage variation can you live with.

You can also use a questionnaire available online and offered by Vanguard: https://www.vanguardcanada.ca/individual/questionnaire.htm#/

Based on your answers, the tool will propose the best allocation among stocks, bonds and short-term reserves.

Conservative portfolio

Fixed income will dominate the portfolio at 60% or more (with the exception of Horizons’). Meaning your investments will be mostly  in Bonds. Bonds are much safer than stocks but they don’t usually offer much return. This portfolio is perfect for some one whose financial objective is short term or who is risk averse. Your portfolio will still have between 20-40% exposure to stocks which allows for some modest growth with a moderate risk overall.

Balanced profile

balanced portfolio is an investment that combines stocks and bonds. In general, 60% will be invested in the stock market (. While the remainder (40%) will be invested in fixed income investments. This portfolio seeks to combine both growth potential by holding stocks and the safety associated with holding bonds.

Growth portfolio

growth fund is a diversified portfolio of stocks that has capital appreciation as its primary goal. This is ideal for investors who have a long term objective such as building a retirement fund. The fund will invest at least 80% in Stocks. Generally for these type of funds, providing a dividend income is a secondary objective.

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