BMO All-in-One ETF – Diversification and Convenience
All-in-One ETFs, also known as asset allocation or balanced ETFs, were created to offer investors a simplified and convenient way to achieve diversified portfolios. Several reasons make these types of ETFs attractive to investors:
Diversification: All-in-One ETFs typically hold a mix of different asset classes such as stocks, bonds, and sometimes even other assets like real estate or commodities. This diversification helps spread risk and reduces the impact of poor performance in any single asset.
Ease of Use: These ETFs are designed to be easy for investors to understand and use. Instead of selecting and managing multiple individual ETFs, investors can purchase a single All-in-One ETF that already contains a well-balanced mix of assets.
Simplicity: Especially for novice investors, All-in-One ETFs simplify the investment process. There’s no need to worry about rebalancing or adjusting the portfolio as market conditions change since the fund’s management takes care of this.
Cost-Effectiveness: These ETFs can be cost-effective compared to purchasing multiple individual ETFs or mutual funds. The fees for All-in-One ETFs are often lower than the combined fees of managing a similar diversified portfolio with separate funds.
Time-Saving: For investors who don’t have the time or expertise to actively manage a complex portfolio, All-in-One ETFs provide a “set it and forget it” approach. This can be particularly beneficial for individuals with busy schedules or those who prefer a hands-off investment strategy.
Targeted Goals: Some All-in-One ETFs are designed for specific goals, such as retirement, saving for college, or generating income. This makes it easier for investors to align their portfolio with their financial objectives.
Accessibility: All-in-One ETFs are available on major stock exchanges, making them easily accessible to a wide range of investors through their brokerage accounts.
Overall, the introduction of All-in-One ETFs provides investors with a straightforward and efficient way to achieve a diversified portfolio, align with their risk tolerance, and work towards their investment goals without the complexity of managing multiple individual investments.
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How to choose the best All in one BMO ETF portfolio?
The first crucial step is assessing your risk profile, a pivotal factor in crafting the best portfolio. This profile hinges on your response to two fundamental questions:
Time Horizon: Are you planning for the long haul or aiming for short-term gains?
Risk Tolerance: Every ETF carries inherent fluctuations in value. What level of percentage variation can you comfortably handle?
To facilitate this assessment, an online questionnaire is available through Vanguard at the following link.
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
A 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
A 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.
BMO All-in-One ETF
BMO offers three all-in-one ETFs. The breakdown for each portfolio is diversified and covers several types of assets (US, Canadian, Developed and Emerging Markets Equities). The fixed income offering is diversified and covers both the North American and global bond markets.
For the equities breakdown, exposure to the US market is made with 3 funds (mainly the BMO S&P 500 INDEX ETF, BMO S&P US MID CAP INDEX ETF and BMO S&P US SMALL CAP INDEX ETF).
For the bond component, iShares uses three funds that cover the Canadian, American and global markets.
| Name | Number of holdings | Breakdown |
| BMO Conservative – ZCON | 7 | 35%-40% Equity; 60%-65% Bonds |
| BMO Balanced – ZBAL | 7 | 55%-60% Equity; 40%-45% Bonds |
| BMO Growth – ZGRO | 7 | 80%-85% Equity 15%-20% Bonds |
Best ETF Canada 2023 (all in one) – BMO
Portfolio allocation
BMO Conservative – ZCON
| Weight (%) | Name | Bloomberg Ticker |
| 40.33% | BMO AGGREGATE BOND INDEX ETF | ZAG |
| 18.49% | BMO S&P 500 INDEX ETF | ZSP |
| 16.96% | BMO US AGGREGATE BOND INDEX ETF | ZUAG/F |
| 9.99% | BMO S&P/TSX CAPPED COMPOSITE INDEX ETF | ZCN |
| 9.08% | BMO MSCI EAFE INDEX ETF | ZEA |
| 3.31% | BMO MSCI EMERGING MARKETS INDEX ETF | ZEM |
| 1.26% | BMO S&P US MID CAP INDEX ETF | ZMID |
| 0.51% | BMO S&P US SMALL CAP INDEX ETF | ZSML |
| 0.06% | CASH | – |
BMO Balanced – ZBAL
| Weight (%) | Name | Bloomberg Ticker |
| 27.11% | BMO S&P 500 INDEX ETF | ZSP |
| 26.05% | BMO AGGREGATE BOND INDEX ETF | ZAG |
| 14.97% | BMO S&P/TSX CAPPED COMPOSITE INDEX ETF | ZCN |
| 13.26% | BMO MSCI EAFE INDEX ETF | ZEA |
| 10.86% | BMO US AGGREGATE BOND INDEX ETF | ZUAG/F |
| 4.73% | BMO MSCI EMERGING MARKETS INDEX ETF | ZEM |
| 1.76% | BMO S&P US MID CAP INDEX ETF | ZMID |
| 0.71% | BMO S&P US SMALL CAP INDEX ETF | ZSML |
| 0.46% | CASH | – |
| 0.07% | BMO GOVERNMENT BOND INDEX ETF | ZGB |
BMO Growth – ZGRO
| Weight (%) | Name | Bloomberg Ticker |
| 35.53% | BMO S&P 500 INDEX ETF | ZSP |
| 19.48% | BMO S&P/TSX CAPPED COMPOSITE INDEX ETF | ZCN |
| 16.99% | BMO MSCI EAFE INDEX ETF | ZEA |
| 13.01% | BMO AGGREGATE BOND INDEX ETF | ZAG |
| 6.31% | BMO MSCI EMERGING MARKETS INDEX ETF | ZEM |
| 5.60% | BMO US AGGREGATE BOND INDEX ETF | ZUAG/F |
| 2.21% | BMO S&P US MID CAP INDEX ETF | ZMID |
| 0.90% | BMO S&P US SMALL CAP INDEX ETF | ZSML |
| -0.02% | CASH | – |
