The Best All-in-one ETFs in Canada for April 2024

WRITTEN BY Dan Kent | UPDATED ON: April 4, 2024

All-in-one ETFs Canada

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Exchange-traded funds (ETFs) have quickly become popular in Canada because of their adaptability and accessibility for investors. They bring together the most favorable features of stocks and mutual funds, providing a wide array of investment choices at affordable rates and with high liquidity.

Although you can trade ETFs for free on Wealthsimple Trade, for the most part, many major brokerage platforms like Questrade, Qtrade, and even major bank brokerages are making them free to trade despite charging commissions on regular stock purchases.

Among the variety of ETFs available, all-in-one ETFs stand out for their simplicity and convenience, delivering a one-click method to a diverse portfolio for Canadians. We mustn't get too focused on Canadian equities. It can end up leaving us with a poorly balanced portfolio and too exposed to a single economy.

All-in-one ETFs are designed to provide a balanced and diversified portfolio within a single investment product. The widen the scope of attention, focusing on entire markets, while some ETFs narrow the field of view to one industry, such as gold ETFs.

These ETFs typically consist of a mix of stocks, bonds, and other assets, adjusting the allocation based on an investor's risk tolerance and investment goals. 

This approach allows Canadians to effortlessly access a well-rounded investing strategy without the need to manage multiple individual funds.

As the demand for efficient, diversified investing solutions grows in Canada, numerous all-in-one ETFs have emerged to cater to various investment preferences, possibly saving a person from the need for robo-advisors, human advisors, or constant rebalancing. These offerings help people shift from having to review ETFs for specific niches, like Canadian bank ETFs, and instead capture entire markets and gain increased diversification.

This article will discuss all of the possible all-in-one ETFs you can buy here in Canada from some of the largest ETF providers around. Hopefully, by the end of it, you'll know which ones you need to investigate further.

What are the best all-in-one ETFs in Canada today?

Types of all-in-one ETFs

All-in-One ETFs combine several asset classes and strategies into a single fund, providing investors with a diversified and well-balanced portfolio. Let's go over the various types of all-in-one ETFs available in the Canadian market, focusing on growth, equity, and conservative options.

Equity ETFs 

These are designed for investors seeking capital appreciation over a long time horizon. These funds generally have a higher allocation to equities, with a smaller portion in fixed-income securities.

These products provide exposure to a diverse range of Canadian and global stocks, with minimal allocation to bonds. 

These funds can include domestic, international, or global equities, allowing investors to diversify across geographic regions and sectors. The All-Equity ETF Portfolio (XEQT) is an example of an equity-focused portfolio, providing investors with a comprehensive mix of Canadian, U.S., and international stocks.

Balanced ETFs 

These strike a balance between risk and reward by allocating assets across both equities and fixed-income securities. These funds offer a mix of capital appreciation and income generation, making them suitable for investors with a moderate risk tolerance.

Conservative ETFs 

More conservative ETFs focus primarily on capital preservation and income generation, with a more minor emphasis on capital growth. These funds usually have a higher allocation to fixed-income securities, such as bonds, and a lower allocation to equities.

These portfolios offer diversified exposure to global bonds and equities, with an emphasis on Canadian fixed-income securities.

Canadian investors have numerous All-in-One ETF options catering to various investment objectives and risk preferences. By selecting the appropriate All-in-One ETF, investors can easily create diversified, well-balanced portfolios tailored to their specific needs.

Top All-In-One ETFs in Canada

iShares Core Equity ETF Portfolio (XEQT)

iShares Core Equity ETF Portfolio (XEQT) is a popular all-in-one ETF for investors seeking exposure to equities. An entirely equity-based portfolio, XEQT is composed of around 9,000 securities from domestic and international markets. 

The fund has a management expense ratio of around 0.2%, meaning you'll pay $2 per $1000 invested in the fund on an annual basis. With assets under management of just shy of $2B, it's undoubtedly one of the larger funds in Canada for all-in-one ETFs.

Although the fund has over 9,000 aggregate holdings, in reality, it just contains four. How does this work? iShares Core Equity ETF Portfolio XEQT is an ETF of ETFs. Its 4 holdings are all iShares ETFs, each targeting a different global market segment. So, you'll have an ETF that tracks the U.S. market, the Canadian market, the international market, and so on.

This fund isn't known for its distribution, as it has a dividend yield of only 2.12%. Most of these funds are not yield-focused because of the broad range of their holdings.

About 70% of the fund is comprised in North America, with 47% in the United States and the other 23% in Canada. Outside of that, most of the remaining holdings will be in developed markets like Japan and Europe.

Vanguard All-Equity ETF Portfolio (VEQT)

Another excellent all-equity option is the Vanguard All-Equity ETF Portfolio (VEQT), offering a similar allocation to the global market as XEQT. It, too, holds a combination of four ETFs to give the investor exposure to entire markets.

However, one of the differences would be that XEQT has an American-traded ETF in ITOT that gives the fund its United States coverage, while Vanguard goes for one of its own Canadian funds, the Vanguard U.S. Total Market ETF (TSE:VUN).

Why is this important? This is where you'll see a difference in fees. VUN has much higher fees than ITOT (0.17% versus 0.03%), so VEQT does come in at higher fees than XEQT at 0.25%. Still, paying $2.50 per $1000 invested annually is a small price for one-click exposure to the entire global market.

Allocations are similar. However, VEQT does have more exposure to the Canadian markets, about 3% more at the time of writing.

It pays a distribution of 1.95% and has $2.85B in assets under management.

BMO All Equity ETF (TSE:ZEQT)

BMO All Equity ETF (TSE:ZEQT) is yet another all-equity option in Canada. It offers investors well-rounded exposure to domestic and international equities and has a competitive MER of 0.20%.

The fund is relatively new and began during a pretty significant market drawdown. So, it only has assets under management of around $38M. This pales in comparison to the funds listed above, but BMO is a pretty big player in the fund game, I expect this to increase as we move forward.

Much like Vanguard and iShares, the fund uses its own ETFs to provide Canadians with broad global exposure. This one has the widest variety of ETFs, containing six total. The only main difference is it separates the U.S. exposure from a total market ETF to one that tracks the S&P 500, mid caps, and small caps.

Allocations are virtually identical to the options listed above, and it pays a distribution of around 2.21%. All in all, when it comes down to purchasing these funds, it boils down to the brand.

Vanguard Balanced ETF Portfolio (VBAL)

The Vanguard Balanced ETF Portfolio (VBAL) caters to investors looking for a balanced mix of equities and fixed-income assets. With a 60% allocation to equities and a 40% allocation to fixed income, Vanguard Balanced ETF Portfolio (VBAL) is designed for those seeking moderate growth and some risk mitigation. The MER is 0.23%, making it a cost-efficient choice for many looking for a mixed portfolio.

The exposure to fixed-income securities hasn't worked out well, as the 60/40 portfolio has faced significant pressure over the last few years. However, with high interest rates, it could be time to become bullish on bonds again.

The fund is relatively large, with AUM of $2.4B at the time of writing. Because it does have fixed income exposure, it pays a little higher distribution than its all-equity Vanguard counterpart, coming in at 2.33%.

In terms of holdings, it will contain the same ETFs as VEQT, except they'll have lower overall allocations due to the bond exposure. Almost the entire bond portfolio is either A-rated or greater, highlighting the high-quality nature of the fixed-income portion.

iShares Core Balanced ETF Portfolio (XBAL)

For investors who seek a balanced exposure to equity and fixed income, the iShares Core Balanced ETF Portfolio (XBAL) is a solid choice. With a 60% allocation to equities and a 40% allocation to fixed income, XBAL has a diversified portfolio to achieve an equilibrium between growth and risk management. It has a lower fee than VBAL, coming in at just 0.20%

Interestingly enough, this fund looks similar to VBAL. However, the allocations are different. XBAL contains 80% exposure to North American equities and fixed-income options. However, it puts more weight in Canada than the United States. This is the first fund on this list to have that objective.

The fund also contains a bit of a different bond portfolio. Although 83% of the fund is rated A or greater, XBAL has 17% exposure to BBB-rated bonds, which offer higher yields but have a bit more risk. Still, a BBB-rated bond is at low risk of default.

The fund has a distribution of 2.15%. Generally, these asset-allocation ETFs are not structured to provide income, more so total returns.

BMO Balanced ETF (ZBAL)

BMO Balanced ETF (ZBAL) is another all-in-one ETF for those who prefer a balanced approach. With a 60% equity and 40% fixed income allocation, ZBAL aims to maintain an optimal blend for long-term investments. In terms of management expense ratio, it keeps up with both iShares and Vanguard at around 0.2%, meaning you'll pay $2 for every $1000 you have invested on an annual basis.

BMO is a little late to the party on these ETFs, so the assets under management are a little smaller. In fact, at only $161M, it is much smaller than any of the other 60/40 ETFs mentioned. However, don't worry, it's still plenty large and won't be going anywhere.

Like the other funds, it simply owns BMO ETFs to expose investors to the proper asset allocation mix.

The fund is the highest yielding out of the 60/40 ETFs, typically in the mid to high 2% range. So, if you're looking for that added boost in income, you could consider this.

Another alternative I didn't list here would be the Horizons Balanced TRI ETF Portfolio (HBAL) from Horizons ETFs.

BMO Conservative ETF (ZCON)

The BMO Conservative ETF (ZCON) is designed for investors with a more conservative risk appetite. With a higher proportion of fixed-income assets (60%) to equities (40%), ZCON provides a relatively stable return profile.

The fund has management fees of only 0.2%, which is relatively comparable to any other ETF providers on this list. The heightened fixed-income exposure will be for someone with a fairly conservative risk profile. Only 10% of the bonds are BBB-rated, with the remaining being A or higher.

The fund has high Canadian exposure. Over half the fund is Canadian, a first on this list. The remaining is allocations towards the United States and developed markets in Europe.

Because of its 40/60 focus, it does end up yielding more. The fund has a distribution that typically hovers in the 3% range.

BMO Growth ETF (ZGRO)

Lastly, the BMO Growth ETF (ZGRO) suits investors with a higher risk tolerance and an emphasis on growth. This ETF consists of an 80% allocation to equities and a 20% allocation to fixed income, aiming for capital appreciation in the long run. 

This is the only 80/20 ETF on this list. However, to avoid myself from just repeating the same thing over and over, I decided not to put on the Vanguard (VGRO) or iShares (XGRO) variants on here. The funds are similar, and it often comes down to brand preference.

This will be the "middle of the line" all-in-one ETF for someone who doesn't quite want to go 100% equities but also thinks that a 40/60 portfolio made up mostly of fixed income may be a bit too conservative for them.

It has competitive fees, coming in at 0.2%, and pays a 2.44% distribution.

Selecting an ETF based on risk tolerance

When choosing an ETF, it is crucial to consider an individual's risk tolerance. In fact, most of these ETFs are structured to provide just that: appropriate risk profiles for the investor.

Risk tolerance refers to the degree of variability in investment returns one is willing to accept. One must be aware of risk tolerance to create a diversified portfolio that matches personal investment objectives and financial goals.

One way to assess risk tolerance is by examining the ETF's asset allocation, as we reviewed thoroughly in this article. 

ETFs with a higher proportion of equity holdings are typically more volatile and carry a higher risk, even some dividend ETFs, while those with a greater share of fixed-income securities are more stable, offering lower returns but reduced risk.

For investors with a low-risk tolerance, say those looking for retirement income, selecting ETFs with a higher percentage of fixed-income securities, such as government and corporate bonds, is advisable. These securities offer regular interest payments and are generally less susceptible to market fluctuations. Canadian bond ETFs are some important things to consider when leaning more on investments for expenses.

Furthermore, these types of ETFs serve as a reliable source of income and help preserve capital for risk-averse investors.

On the other hand, investors with a higher risk tolerance may prefer ETFs with more significant equity exposure, as these can potentially provide higher returns over the long term. These investors are more comfortable with the volatility of equity markets. They can withstand short-term losses in pursuit of long-term capital growth.

Balancing risk and potential returns is vital in creating a diversified portfolio. In other words, investors should seek to combine ETFs with a range of asset allocations, including both equity and fixed-income holdings, to strike an optimal balance. This approach provides a layer of protection against market changes and reduces the overall risk in a portfolio.

What account should I have these all-in-one ETFs in?

For the most part, the global exposure of these ETFs and the fact they have USD holdings held in Canadian-domiciled ETFs will have you paying withholding taxes on the distributions even in a TFSA or RRSP.

But, keep in mind that would only be on the dividend portion of the distribution, and these funds are primarily designed for investors to realize capital gains over the long term from holding them. So, I wouldn't fret too much about the withholding taxes if you purchase one of them, especially with their long-term diversification benefits.