Over the years, there have been various trends in the world of finance and investing. One of the most talked about has been crypto, but a lesser known investment is the all-in-one ETF. Over the years, all-in-one exchange traded funds have become a popular investment for Canadians. You might be wondering, what exactly is an all-in-one ETF and should I invest in them? To learn more about all-in-one exchange traded funds and for a Canadian ETF list, continue reading below.
Table of contents
What is an ETF?
An ETF stands for exchange traded funds. As the name implies, they are funds that trade on an exchange, usually tracking against a specific index. When you own exchange traded funds, you own a bundle of assets. Like stocks, the price of an ETF rises and falls throughout the day. You are free to buy and sell exchange traded funds as you wish during market hours.
Why invest in ETFs?
When you own an exchange traded fund, you own a bundle of stocks or bonds. This diversifies your market risk which helps your investment portfolio in the long run. In addition, owning stock in a specific company is great, but owning various types of investments is even better. Having some ETFs in your portfolio can help you achieve optimal diversification.
Related Reading: 5 Best Money Market ETFs in Canada
What is an all in one ETF?
An all-in-one ETF is an ETF of an ETF – yes, the world of finance can be crazy! In other words, an all-in-one exchange traded fund bundles various other ETFs together into a single ETF. Asset allocation exchange-traded funds is another term for the same financial product. The idea is to provide more diversification to the investor than a regular ETF. Just like other exchange traded funds, you can purchase all-in-one ETFs on the stock exchange. Exchange traded funds are routinely rebalanced to ensure they maintain their investment objectives. Typically, they contain an assortment of North American and international investments.
Why invest in all in one exchange traded funds?
Asset allocation ETFs can be a way to further diversify your portfolio. In fact, it is an investment with a high level of diversification on its own. They have become a popular investment choice for Canadians. Although, it’s not enough to invest in what everyone else is investing in! Below is more information to consider before purchasing an all-in-one exchange traded funds.
Benefits of all in one ETFs
- Easy to purchase. Unlike other kinds of investments, you don’t need to enter a new market to purchase all-in-one exchange traded funds. If you are already in the stock market, you can easily purchase asset allocation ETFs.
- Rebalancing. Every now and then, it’s good practice to rebalance your portfolio. Over time, portfolios can stray from their original targets due to market activity. You can rebalance a portfolio by selling investments and putting the money into new investments. With all-in-one exchange traded funds, the asset allocations automatically rebalance every now and then. This means you have to make less decisions as an investor.
- Diversification. Asset allocation ETFs provide a ton of diversification compared to regular exchange traded funds, stocks and bonds. You essentially own a small portion of a bunch of companies.
- Professional input. Since all-in-one ETFs are overseen by professionals, the investor benefits. You may not have this knowledge or resource if you weren’t investing in asset allocation exchange traded funds.
- Cross border investing. Many ETFs hold assets from other countries, such as the US or Europe. However, you don’t have to open a foreign currency account or foreign stock exchange account to access them. Certain asset allocation exchange traded funds allow you to invest cross borders without having to go through tricky administration.
Is an all in one ETF all you need?
No, it’s not wise to solely invest in all-in-one ETFs. In fact, it’s not recommended to invest all your money into any one thing. As the old saying goes, don’t put all your eggs into one basket!
Asset allocation exchange traded funds are a great way to diversify your portfolio, but you should also consider putting money into regular ETFs, mutual funds, stocks, bonds, and other investments. In addition, you should consider investing money outside of the stock market. For example, into a home, business, your education or anything else that could increase your wealth in the long run.
Who should invest in all in one ETFs?
Anyone who has savings they want to invest should consider all-in-one exchange traded funds. This could be individuals who already have stock portfolios and want to reinvest cash, or it could be someone looking to begin investing on a stock exchange.
The great thing about asset allocation exchange traded fund is they’re an easy entry into the stock market for beginners. Since they hold so many types of assets, it’s unlikely the exchange traded funds will perform badly in the long run. However, this shouldn’t deter you from purchasing other types of investments on the stock market.
How to buy an all in one ETF in Canada
To purchase an asset allocation exchange traded fund, you need to have a stock trading account. Some achieve this through their bank, whereas others use platforms like Wealthsimple and Questrade. Many Canadians choose to invest using their TFSA or RRSP, but you can also invest through a non-registered account.
Once you’ve got a trading account open, you need to have funds available to make a purchase. From there, you can find an all-in-one exchange traded fund you like and make a purchase.
How to choose the right all in one ETF
There are a ton of asset allocation exchange traded funds out there, so how do you choose the right one? All-in-one exchange traded funds are typically graded based on risk tolerance. Each investor is different, some are willing to take on more risk whereas others would prefer to be conservative. Below are various risk profiles for all-in-one ETFs:
Conservative
If you have low risk tolerance, prefer steady, long term gains and modest income, then this is the optimal risk profile for you. These kinds of all-in-one exchange traded funds are made up of mainly fixed assets and some stocks.
Balanced
This is a step up in risk tolerance. If you’re comfortable taking on a medium level of risk, then this is a good risk profile to consider. These kinds of all-in-one exchange traded funds are made up of stock and fixed assets, with the ratio of stocks being slightly higher.
Growth
Investors with a higher appetite for risk will benefit from this risk profile. Keep in mind, this risk tolerance is ideal for investors looking for long term gains. You may experience volatile ups and downs in the short run. These kinds of all-in-one ETFs consist mainly of stocks.
All Equity
Many people choose to invest in stocks because it means they own a small portion of the company. In other words, this equity. Other investments available for purchase on the stock exchange do not necessarily give you ownership in a company, like bonds. These types of exchange traded funds have a greater focus on leveraging ownership in organizations.
Income
Some people choose to invest to expand their income streams. There are all-in-one exchange traded funds designed to produce regular, consistent income. Although, the risk profile of these is similar to conservative above. Some may have a more modest risk level. Often times, these all-in-one ETFs have a higher proportion of bond ETFs.
ETF Screener
An ETF screener is a technology used to help investors find exchange traded funds, or screen through a variety of options. They are a good tool to use if you want to create or reassess your ETF portfolio in Canada. Normally, ETF screeners are some sort of software program or based on the internet. The user would input certain criteria, such as risk tolerance or desired investment type, and the system would return a list of ETFs.
Below are some free online ETF screeners you can use:
ETF Finder
VettaFi ETF Screener
Seeking Alpha ETF Screener
Best all in one ETFs in Canada
As mentioned, all-in-one ETFs have become a popular investment choice for Canadians. There are a lot of Canadian exchange traded funds to buy on the market. But which are the good ETFs to buy in Canada? We’ve compiled a list of top Canadian exchange traded funds in the all-in-one category below. But remember each investor is different and will have a different risk profile and investment preferences. Use this general information and tables as an ETF comparison in Canada.
Vanguard
Vanguard Canada was originally founded in Valley Forge, Pennsylvania in 1975. Now, it is an international investment company that also operates a Canadian subsidiary called Vanguard Investments Canada Inc. Vanguard offers a variety of asset allocation exchange traded funds. Some of them are considered the best performing ETFs. Each of their products consists of ETFs in a variety of industries. In addition, most of the assets are based in North America. All are traded on the Toronto Stock Exchange (TSX). Learn more below.
| Stock ticker | Percentage of stocks (Approx.) | Percentage of bonds (Approx.) | Assets Under Management (AUM) | Management Expense Ratio (MER) |
| VCNS | 40% | 60% | $486 million | 0.24% |
| VBAL | 60% | 40% | $2.36 billion | 0.24% |
| VGRO | 80% | 20% | $3.96 billion | 0.24% |
| VCIP | 20% | 80% | $217 million | 0.24% |
| VEQT | 100% | 0% | $2.60 billion | 0.24% |
| VRIF | 35% | 65% | $314 million | 0.32% |
iShares
iShares Canada, also commonly known as BlackRock, is an investment company that focuses on the “investor-driven approach”. Their mission is to create innovative investment solutions for their clients. iShares has a few all-in-one exchange traded fund products in their selection of offerings. Most of iShares’ ETFs are invested in the United States, but also Europe and Canada. The assets are split between numerous sectors. Check out the details below.
| Stock ticker | Percentage of stocks (Approx.) | Percentage of bonds (Approx.) | Assets Under Management (AUM) | Management Expense Ratio (MER) |
| SPTGGUT | 60% | 40% | $1.89 billion | 0.15% |
| SPTGMUT | 40% | 60% | $1.34 billion | 0.15% |
| SPTGAUT | 80% | 20% | $1.64 billion | 0.15% |
| SPTGCUT | 30% | 70% | $677 million | 0.15% |
| MAHIT | 40% | 60% | $136 million | 0.58% |
BMO
The Bank of Montreal, or simply BMO for short, is one of Canada’s five largest banks. They are also the 8th largest bank in all of North America. BMO provides both personal and commercial banking services, in addition to wealth management and investment. BMO offers various all-in-one exchange traded funds, continue reading below. All are traded on the Toronto Stock Exchange (TSX).
| Stock ticker | Percentage of stocks (Approx.) | Percentage of bonds (Approx.) | Assets Under Management (AUM) | Management Expense Ratio (MER) |
| ZEQT | 100% | 0% | $32 million | 0.20% |
| ZGRO | 80% | 20% | $190 million | 0.20% |
| ZBAL | 60% | 40% | $149 million | 0.20% |
| ZESG | 60% | 40% | $52 million | 0.20% |
| ZMI* | 55% | 35% | $106 million | 0.20% |
| ZCON | 40% | 60% | $39 million | 0.20% |
Horizons
Horizons exchange traded funds began in September 2005 based in Toronto, Ontario. At the time, their goal was to give investors affordable, flexible investment options that allow the owner to access numerous asset classes. Now, Horizons offers some of the best ETFs to buy on the market. All are traded on the Toronto Stock Exchange (TSX). Let’s take a further look below.