Best ETFs 2019 – One-stop portfolios

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The panel was again unanimous in affirming last year’s choice of the pioneering three Vanguard asset allocation ETFs (VGRO, VBAL and VCNS), as well as the two new ones that flesh out the risk spectrum: VEQT and VCIP.

Best one-stop ETF portfolios – The list

ETF Name Ticker Management Fee MER # of Holdings Description
Vanguard Growth ETF Portfolio VGRO 0.22 N/A 26,995 Holds 7 Vanguard ETFs, 80% equities versus 20% bonds
Vanguard Balanced ETF Portfolio VBAL 0.22 N/A 26,995 Holds 7 Vanguard ETFs, 60% equities versus 40% bonds
Vanguard Conservative ETF Portfolio VCNS 0.22 N/A 26,995 Holds 7 Vanguard ETFs, 40% equities versus 60% bonds
NEW! Vanguard All-Equity ETF Portfolio VEQT 0.22 N/A 12,140 Holds 7 Vanguard ETFs, 100% equities
NEW! Vanguard Conservative Income ETF Portfolio VCIP 0.22 N/A 26,995 Holds 7 Vanguard ETFs, 20% equities versus 80% bonds

Robb Engen calls these One-Solution ETF solutions “game changers” and in fact his own Desert Island pick was the all-stocks VEQT. Personally, I question whether VEQT’s 100% allocation to stocks even merits the descriptor “Asset Allocation” but this didn’t appear to be a concern for the panel. You could argue that the product is still needed to balance asset allocation across taxable and non-taxable accounts: with 80% and 60% fixed income respectively, VCIP and VCNS are strong candidates to hold in RRSPs or TFSAs, while VEQT would presumably be more tax efficient in taxable portfolios.

Ben Felix argued that the two new iShares one-decision packages, XBAL and XGRO, cut fees and reduced home bias enough to merit inclusion, but the majority felt the fee differential didn’t merit the switch, given our panel’s conservative inclination not to break what isn’t broken.

Most of the panel agreed with Dale Roberts’ assessment that “Vanguard gets the nod as they are the provider covering more of the risk suite, from 20% bonds up to 100% stocks; with 5 funds vs 3 for BMO and 2 for iShares. The asset allocation differences will quickly eat up any fee differences, minor as they are.”

Franklin Templeton’s entry to this class, albeit through the MFDA channel at slightly higher fees than the pure ETF solutions, suggests to Yves Rebetez that “Franklin’s offering is confirming once more if needed the commoditized state of traditional market cap benchmarks … which nonetheless is worth bringing to attention of investors.”

Naturally, our expert panel will monitor these and no doubt other recent alternatives over the next year. In the meantime, of course, readers are free to make their own call on any of these picks.

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