Best All-in-One ETFs Canada

If you’ve ever tried self-managing your own investing portfolio, you probably know that investing can get real complicated, real quick! With the plethora of stocks, bonds, and ETFs available on the market today, it’s hard to know where to even begin.

Fortunately, all-in-one ETFs (also known as asset allocation ETFs) allow you to create a diversified and balanced investing portfolio with the purchase of a single ETF. They provide an ideal blend of simplicity, low cost, and broad diversification, making them an excellent choice for the passive index investor.

Ever since Vanguard led the way a few years back with their original all-in-one ETFs, there have been a rising number of issuers offering one-fund investing solutions. The best all-in-one ETF in Canada for any investor will depend on one’s individual risk tolerance and asset allocation preferences.

Here are the best all-in-one ETFs to buy in Canada for 2021:

ETF NameTickerAsset Allocation2020 ReturnMER
Vanguard All-Equity
ETF Portfolio
VEQT100% equities9.440.25
Vanguard Growth
ETF Portfolio
VGRO80% equities
20% fixed income
Vanguard Balanced
ETF Portfolio
VBAL60% equities
40% fixed income
Vanguard Conservative
ETF Portfolio
VCNS40% equities
60% fixed income
Vanguard Conservative Income
ETF Portfolio
VCIP20% equities
80% fixed income
iShares Core Equity
ETF Portfolio
XEQT100% equities9.910.2
iShares Core Growth
ETF Portfolio
XGRO80% equities
20% fixed income
iShares Core
Balanced ETF Portfolio
XBAL60% equities
40% fixed income
iShares Core Conservative
Balanced ETF Portfolio
XCNS40% equities
60% fixed income
iShares Core Income
Balanced ETF Portfolio
XINC20% equities
80% fixed income
BMO Growth ETFZGRO80% equities
20% fixed income
BMO Balanced ETFZBAL60% equities
40% fixed income
BMO Conservative ETFZCON40% equities
60% fixed income
Horizons Growth
TRI ETF Portfolio
HGRO100% equities15.720.16
Horizons Balanced
TRI ETF Portfolio
HBAL70% equities
30% fixed income
Horizons Conservative
TRI ETF Portfolio
HCON50% equities
50% fixed income

How to buy all-in-one ETFs in Canada

You can buy all-in-one ETFs and other stocks with an online brokerage account. The best online brokerage to buy ETFs with is Questrade. Aside from being one of the best overall brokerages in Canada, they work especially well with this strategy because buying ETFs cost $0 in commissions.

This means that as an index investor, your returns won’t be eaten up by trading fees, especially if you are using the dollar-cost averaging technique!

Don’t have a Questrade account yet? Wealthsavvy readers can earn a bonus $50 in free trades by creating an account using the link below.

 Open Questrade Account ($50 in Free Trades)

How to decide which all-in-one ETF to buy

By definition, you only need to pick one of these all-in-one ETFs for your investment portfolio. However, with an increasing number of all-in-one ETFs becoming available, it can be daunting to decide exactly which ETF you want in your portfolio.

Here are the main considerations that you’ll need to keep in mind when choosing the best option for you:

  • Risk vs Return: What is your risk tolerance and investing time horizon? (determines percentage in equities vs. fixed income)
  • Asset Mix: Do you prefer a greater proportion of Canadian, US, or international exposure? (choosing between Vanguard vs BlackRock vs BMO vs Horizons)
  • Management Expense Ratios (MER): Each all-in-one ETF has varying management fees that eat into your annual return. This seemingly small difference in cost can compound over the long-term.

Risk vs Return

When it comes to investing, there is always a tradeoff between expected return and risk. Generally speaking, the higher the risk, the higher the expected return needs to be to compensate for an investor taking on that risk.

The great thing about all-in-one ETFs is that they are broadly diversified, which means they eliminate unsystematic risk (risk from individual stocks) and offer favourable risk-adjusted returns. Therefore, the main decision to make is how much exposure you want in equities (i.e. stocks) vs fixed income (i.e. bonds).

Generally, equities consistently perform better over the long run and have higher annualized returns than fixed income. However, the volatility of equities is much higher, meaning that it’s very possible to lose money on your investment in the short term.

To account for this risk, you’ll need to be clear on your investing horizon (the length of time you are investing before you start to withdraw). As an example, if your investment horizon is 15 years, this is relatively long-term, so a suitable ETF choice would be one that has a higher equity allocation (one with 80% equities or more). The most popular ETFs in this category are VGRO and XGRO.

Another factor to consider for investors is that we are all susceptible to human emotions. You will need to accurately gauge your ability to stomach market volatility and understand whether you would deviate from your investing strategy when things take a turn for the worse.

Here are the best all-in-one ETFs in Canada to choose based on your investing horizon and risk tolerance.

ETF NameInvesting HorizonAverage Annualized Return (estimated)Potential Worst 1-Year Return (estimated)
VCIP, XINC0-2 years5-7%-6%
VCNS, XCNS, ZCON, HCON2-5 years5-8%-15%
VBAL, XBAL, ZBAL, HBAL5-10 years5-9%-20%
VGRO, XGRO, ZGRO10-20 years5-10%-30%
HGRO, VEQT, XEQT20+ years5-10%-40%

Asset Mix

Once you have determined what allocation of equities vs fixed income best matches your individual situation, you will now need to determine what issuer to choose. Do you go with Vanguard, BlackRock, BMO, or Horizons?

One factor to consider is the ETF’s regional asset allocation. Each issuer has a different target asset allocation of Canadian equities, US equities, international equities, and fixed income for each of their ETFs.

Asset Allocation for Canadian All-in-One ETFs

As you can see, some issuers are more heavily weighted in US equities compared to Canadian equities. Horizons has the highest proportion of US equities in its funds, while Vanguard funds have the highest proportion of Canadian equities. So if you want more Canadian exposure, go with a Vanguard fund. If you instead prefer to be more heavy on US equities, go with one of the other issuers.

Management Expense Ratios (MER)

The other important factor that you should consider when choosing which all-in-one ETF to buy is its MER. The good news is that the MER of all-in-one ETFs range from 0.15-0.25. This is quite low considering that the ETFs are automatically balanced for you, saving you the hassle of doing it yourself. And it’s also lower than the typical robo-advisor MER of about 0.5%.

However, it’s not something to overlook. When investing with an extremely long time horizon spanning several decades, every basis point that you can save in cost makes a tangible difference to your final portfolio value. That’s why when all else is equal, one possible deciding factor when choosing your ETF could be the MER of the fund.

For example, VGRO and XGRO both target 80% equities and 20% fixed income, but since XGRO has a lower MER than VGRO (0.20 vs 0.25), it seems to be a slightly more appealing option.

By considering risk tolerance, asset allocation, and fund fees, you will be well equipped to pick the all-in-one ETF that best suits your individual investing needs.

Are all-in-one ETFs the right investing choice for you?

For the DIY index investor, all-in-one ETFs are gems among a saturated market consisting of a dizzying variety of stocks and ETFs to choose from. With that said, are there any other circumstances that investors need to consider before jumping aboard the all-in-one ETF train?

Should I Buy an All-in-One ETF?

A good choice when...
  • You want simple, effective, and time-efficient – with the need for only one ETF in your portfolio and automatic rebalancing, this is as set-it-and-forget-it as it gets with DIY investing.

  • You are disciplined in buying the ETF every time you contribute – you will still need to manually buy the ETF whenever you contribute into your investment account. Make sure that you won’t forget to keep up this habit along the way.

  • You aren’t tempted to constantly fiddle with your portfolio – holding one ETF in your portfolio is so simple that it’s downright boring. You need to be able to tune out the noise and stick with your strategy, whether times are good or bad.

Perhaps not the best if...
  • You have the time and energy to rebalance – if you have more time on your hands to invest, consider using a 3-fund portfolio in which you will need to periodically rebalance, but the MER is reduced to below 0.10.

  • You might forget to buy ETFs because life gets in the way – if you want an even more hands-off approach and have your contributions automatically invested, consider using a robo-advisor service.

  • You’re always changing your portfolio – if you’re tempted to switch up your investing straetgy depending on the latest trends, you probably wouldn’t be able to sustain an all-in-one ETF investment strategy.


The Best All-in-One ETFs in Canada (2021)

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