Best all-in-one ETFs for 2021



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Asset allocation ETFs have become so popular with our panel that they now make up almost half of our All-Star picks: 18 of 44. This year, we added the three asset allocation ETFs from Horizons: HGRO, HBAL and HCON.

We also retained the five iShares AA ETFs and three BMO picks added in 2020. 

And of course, the panel stuck with the suite that started it all: the pioneering Vanguard asset allocation ETFs (VGRO, VBAL, VCNS, VEQT and VCIP), to which we added a sixth: the new Vanguard Retirement Income Fund (VRIF). Similar to VBAL but with a mix of roughly 50/50 stocks/bonds, VRIF is a bit different from the rest of this category, as it seeks to target (but not guarantee) a 4% annual return for retirees. 

Notice how most of these follow-on offerings use a ticker-naming methodology similar to Vanguard’s. Thus, BMO Growth ETF (ZGRO) is like Vanguard’s VGRO, 80% in equities and 20% in fixed income. BMO Balanced ETF (ZBAL) is like VBAL, with 60% in stocks and 40% in fixed income. Some of the All-in-One ETFs from iShares also follow this ticker-naming model, with XEQT (100% equities), XGRO (80% stocks/20% bonds) and XBAL (60% stocks/40% bonds).  

However, note that while the tickers are similar in many cases, the asset allocations may not be identical now that we have added Horizons to the lineup. The new Horizons All-Stars have relatively more equity in them than you might think from the ticker symbols: thus, HGRO is 100% equities, HBAL is 70% stocks to 30% fixed income (rather than the 60/40 split of VBAL), and HCON is 50/50 (compared to 20% fixed income to 80% equity for VCIP).  

Not all panellists are as enthusiastic about the more conservative asset allocation ETFs this year; indeed, the panel was split on adding the two more conservative new Horizons offerings. For example, almost half of Vanguard’s VCIP (almost 47%) is held in one of our perennial fixed-income All-Stars—VAB, the Vanguard Canadian Aggregate Bond Index ETF. More than half of the bonds held in VAB mature between five and more than 25 years from now; investors who worry about rising interest rates may prefer to build their own version of VCIP (or its equivalents in the competitor suppliers) and replace some VAB with the other All-Star, the short-term bond VSB, which holds only short-term (maturing in five years or less) Canadian bonds.

No ESG picks this year

Last year, the panel added the new BMO ESG (Environmental, Social and Governance) asset allocation ETF (ZESG)—the first of its kind in Canada. However, the panel decided to remove ZESG for this year’s edition. It also considered but decided not to add two new Wealthsimple ESG ETFs: Wealthsimple North America Socially Responsible (WSRI) and Wealthsimple Developed Markets ex North America Socially Responsible (WSRD).  Says PUR Investing’s Ioulia Tretiakova: “ESG is a no, because the criteria and the demand/benefits are uncertain.” 

We will monitor this space with interest in future editions. As Yves Rebetez notes, ESG product ramp-up has been significant and is coming up in discussions between financial advisors and their clients “ as awareness of ESG’s importance and relevance continues to grow.”

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<tbody

ETF Name Ticker Management Fee MER # of Holdings Description
Vanguard Growth ETF Portfolio VGRO 0.22 0.25 7 Holds 7 Vanguard ETFs, 80% equities versus 20% bonds
Vanguard Balanced ETF Portfolio VBAL 0.22 0.25 7 Holds 7 Vanguard ETFs, 60% equities versus 40% bonds
Vanguard Conservative ETF Portfolio VCNS 0.22 0.25 7 Holds 7 Vanguard ETFs, 40% equities versus 60% bonds
Vanguard All-Equity ETF Portfolio VEQT 0.22 0.25 7 Holds 7 Vanguard ETFs, 100% equities
Vanguard Conservative Income ETF Portfolio VCIP 0.22 0.25 7 Holds 7 Vanguard ETFs, 20% equities versus 80% bonds
New!! Vanguard Retirement Income Fund VRIF 0.29 N/A 8 Holds 8 Vanguard ETFs; seeks to yield 4% a year
iShares Core Equity ETF Portfolio XEQT 0.18 0.2 4 Most aggressive; holds 4 iShares ETFs, 100% equities
iShares Core Growth ETF Portfolio XGRO 0.18 0.2 8 Holds 8 iShares ETFs, 80% equities versus 20% bonds
iShares Core Income Balanced ETF Portfolio XBAL 0.18 0.2 8 Holds 8 iShares ETFs, 60% equities versus 40% bonds
iShares Core Conservative Balanced ETF Portfolio XCNS 0.18 0.2 8 Holds 8 iShares ETFs, 40% equities versus 60% bonds
iShares Core Income Balanced ETF Portfolio XINC 0.18 0.2 8 Most conservative, 20% equities versus 80% bonds
BMO Growth ETF ZGRO 0.18 0.2 7 Holds 7 BMO ETFs, 20% fixed income versus 80% equity
BMO Balanced ETF ZBAL 0.18 0.2 7 Holds 7 BMO ETFs, 60% equity verus 40% fixed income
BMO Conservative ETF ZCON 0.18 0.2 7 Holds 7 BMO ETFs, 60% fixed income versus 40% equity
NEW! Horizons Growth TRI ETF Portfolio HGRO 0 0.16 6 100% equity; fund of 6 Horizons equity funds with global exposure; note management fee doesn’t include underlying ETFs
NEW!! Horizons Balanced Tri ETF Portfolio HBAL 0 0.15 8 Holds 8 other funds, 70% equity versus 30% fixed income
NEW!! Horizons Conservative Tri ETF Portfolio HCON 0 0.14 8 Holds 8 other funds, 50% equity versus 50% fixed income


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