Many of you know how much I appreciate and recommend the Vanguard all-in-one ETFs.  What I like most about them is that in a single ETF, it provides investors with a complete globally indexed portfolio that will automatically rebalance to maintain the set ratio of equity/bonds.  All for a very low management expense ratio (MER) of 0.25%.

We all know that competition is good right?  Blackrock iShares has come out with their own version of all-in-one ETFs, and are just as good, and slightly cheaper!  They have some subtle differences, but I’ll let you decide which you like best.

The advantages of choosing either the Vanguard or the iShares all-in-one ETFs versus a robo advisor (which use the exact same ETF-based passive investing strategy) is that the MERs for the all-in-one ETFs are less than half of the cost of those that robos charge. (And roughly a tenth of what Canadian equity mutual funds charge you!).

While robo advisors used to have an advantage in that there were no transaction fees, the leading discount brokerages in Canada such as Questrade, Qtrade, and Virtual Brokers, now allow you to purchase these ETFs for free! Zero dollar ETF purchases have really evened the playing field when it comes to DIY investing vs various types of assisted investing platforms.

Are you paying fees on ETF purchases?

If you do, sign up with Questrade to enjoy commission free trading on all in one ETFs.

Vanguard All-in-One ETFs

Here are the three Vanguard ETFs straight from the Vanguard website.   They each have a MER of 0.25%.  For more details, read my post about the Vanguard all-in-one products here.

Vanguard ETF

Investment objective

Ticker

Strategic asset allocation

seeks to provide a combination of income and some long-term capital growth by investing in equity and fixed income securities.

VCIP

20% equity / 80% fixed income

Seeks to provide a combination of income and moderate long-term capital growth.

VCNS

40% equity / 60% fixed income

Seeks to provide long-term capital growth with a moderate level of income.

VBAL

60% equity / 40% fixed income

Seeks to provide long-term capital growth.

VGRO

80% equity / 20% fixed income

seeks to provide long-term capital growth by investing primarily in equity securities

VEQT

100% equity

iShares All-in-One ETFs

As you can see from the table below, even the ticker symbols are similar!  These iShares ETFs are a little cheaper with an estimated MER of 0.21% (official MER not posted yet).  It’s a great time to be an investor where you can build a completely hands-off indexed portfolio by purchasing a single ETF and paying only 0.21% in fees.  It can get even cheaper if you go with a discount brokerage that offers commission-free ETF purchases.

The biggest difference that I can see right now is that iShares does not offer a conservative portfolio (like Vanguard above), but they go head to head in the balanced and growth portfolios.

iShares ETF

Investment objective

Ticker

Strategic asset allocation

The Fund seeks to provide long-term capital growth and income by investing primarily in one or more exchange-traded funds.

XCNS

40% equity / 60% fixed income

The Fund seeks to provide long-term capital growth and income by investing primarily in one or more exchange-traded funds that provide exposure to equity and/or fixed income securities.

XINC

20% equity / 80% fixed income

The Fund seeks to provide long-term capital growth and income by investing primarily in one or more exchange-traded funds managed by BlackRock Canada or an affiliate that provide exposure to equity and/or fixed income securities.

XBAL

60% equity / 40% fixed income

The Fund seeks to provide long-term capital growth by investing primarily in one or more exchange-traded funds managed by BlackRock Canada or an affiliate that provide exposure to equity and/or fixed income securities.

XGRO

80% equity / 20% fixed income

The Fund seeks to provide long-term capital growth by investing primarily in one or more exchange-traded funds managed by BlackRock Canada or an affiliate that provide exposure to equity securities.

XEQT

100% equity

Are you paying fees on ETF purchases?

If you do, sign up with Questrade to enjoy commission free trading on all in one ETFs.

Comparing Holdings

XBAL vs. VBAL

Comparing the holdings of these two leading ETF providers show that there is little difference in the exposure and holdings.  With XBAL, you’ll get slightly more exposure to the US market and slightly less exposure to Canada.  In the grand scheme of things, that may not be a bad thing since Canadians have a tendency to have a home bias (myself included).

With VBAL, you’ll get slightly better diversification with your bonds portfolio with exposure to the US and global bonds.  However, XBAL gives you more exposure to corporate bonds. With only a 0.04% difference in MER, it’s a tough choice, but if I were to start a portfolio today, it would lean towards XBAL.

AllocationXBALVBAL
CanadaXIC ISHARES S&P/TSX CAPPED COMPOSITE I 15.21%VCN Vanguard FTSE Canada All Cap Index ETF 17.1%
USITOT ISHARES CORE S&P TOTAL U.S. STOCK 26.56%VUN Vanguard US Total Market Index ETF 23.0%
InternationalXEF ISHARES MSCI EAFE IMI INDEX 14.93%

 

IEMG ISHARES CORE MSCI EMERGING MARKETS 3.02%

VIU Vanguard FTSE Developed All Cap EX North America Index ETF 13.7%

 

VEE Vanguard FTSE Emerging Markets All Cap Index ETF 4.2%

Canadian BondsXBB ISHS CORE CAD UNIV BND IDX ETF 25.56%

 

XSH ISHARES CANADIAN SHORT TERM CORPOR 6.40%

VAB Vanguard Canadian Aggregate Bond Index ETF 24.8%
US/International  BondsUSIG ISHARES BROAD USD INVESTMENT G 4.04%

 

GOVT ISHARES US TREASURY BOND ETF 3.99%

VBG Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged 9.7%

 

VBU Vanguard US Aggregate Bond Index ETF CAD-hedged 7.5%

XGRO vs. VGRO

Comparing the iShares and Vanguard all-in-one growth ETFs, again, there are slight differences.  iShares gives you more US equity exposure (36.5% vs 31%) and less Canadian equity (20.51% vs 23.2%).  Vanguard, on the other hand, gives you better global exposure to bonds.  However, this is less important as bonds are only 20% of these portfolios.

Both are strong portfolios, but I like that XGRO has slightly greater global equity exposure.

AllocationXGROVGRO
CanadaXIC ISHARES S&P/TSX CAPPED COMPOSITE I 20.51%VCN Vanguard FTSE Canada All Cap Index ETF 23.2%
USITOT ISHARES CORE S&P TOTAL U.S. STOCK 36.52%VUN Vanguard US Total Market Index ETF 31.0%
InternationalXEF ISHARES MSCI EAFE IMI INDEX 19.71%

 

IEMG ISHARES CORE MSCI EMERGING MARKETS 4.02%

VIU Vanguard FTSE Developed All Cap EX North America Index ETF 18.6%

 

VEE Vanguard FTSE Emerging Markets All Cap Index ETF 5.7%

Canadian BondsXBB ISHS CORE CAD UNIV BND IDX ETF 12.22%

 

XSH ISHARES CANADIAN SHORT TERM CORPOR 3.06%

VAB Vanguard Canadian Aggregate Bond Index ETF 12.5%
US/International  BondsUSIG ISHARES BROAD USD INVESTMENT G 1.92%

 

GOVT ISHARES US TREASURY BOND ETF 1.89%

VBG Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged 4.9%

 

VBU Vanguard US Aggregate Bond Index ETF CAD-hedged 3.8%

VEQT vs XEQT

Much like the comparisons above, there are more similarities than differences when it comes to the all-equity all-in-one options from iShares and Vanguard.  iShares continues to give a little more weight to the USA exposure over the Canadian side of things, with virtually equal weighting given to the international scene.

What it essentially boils down to here is whether you like the extra diversification of the US market versus the steady-as-she-goes world of Canadian equities.

AllocationXEQTVEQT
CanadaXIC ISHARES S&P/TSX CAPPED COMPOSITE   23.5%Vanguard FTSE Canada All Cap Index ETF 30%
USITOT ISHARES CORE S&P TOTAL U.S. STOCK 48.5%Vanguard US Total Market Index ETF 42%
International XEF ISHARES MSCI EAFE IMI INDEX (23 %)EMG ISHARES CORE MSCI EMERGING MARKETS (5%)Vanguard FTSE Developed All Cap ex North America Index ETF (20.8%)Vanguard FTSE Emerging Markets All Cap Index ETF (7.7%)

I’m not going to bother going into detail on the new ultra-conservative all-in-one ETFs from both companies, because there are very few differences between them as they are essentially basic income-generating portfolios.  I honestly think I’d rather just opt to place my money in a high interest savings account at EQ Bank as opposed to bothering with either option.

Are you paying fees on ETF purchases?

If you do, sign up with Questrade to enjoy commission free trading on all in one ETFs.

iShares vs Vanguard All-in-One ETFs FAQ

Can I buy iShares or Vanguard ETFs through Questrade or Virtual Brokers?

Yes! And you will pay exactly $0 to do so!  (There are small fees applicable when you sell these ETFs, but most investors won’t be doing that for 20+ years – when they will represent a very minimal fee for your overall portfolio.)

Are iShares and Vanguard ETFs as Good as Robo Advisors?

Both iShares and Vanguard ETFs use the same passive index investing strategy as the main robo advisors.  In some cases, the underlying ETFs are even exactly the same!  The differences come in terms of price and investor help.  You’ll pay a little bit more to use a robo advisor (roughly .3% more) but you’ll also have access to more advice should you need it.

Are All-in-One ETFs Safe?

No investment is ever “safe” when it comes to risk-proof returns.  All equity and bond investments will go up and down with the markets.  That said, using a discount brokerage to purchase these ETFs is extremely safe from a fraudulent or theft situation.  Also, instantly diversifying your investment dollar into thousands of companies and bonds from around the world, your money is statistically much safer from a dramatic investment loss than it could be in a mutual fund, or a few hand-picked stocks.

Is It Easy and/or Simple to Invest With Vanguard or iShares All-in-One ETFs?

Yes!  After you setup your online broker account, you can literally commit less than 30 minutes per year to your investment portfolio using these products.  If you simply decide on your risk level, and then purchase the corresponding all-in-one ETF, you will beat the returns of the vast majority of investors out there – simply by not doing psychologically-destructive things to your portfolio!  Every few months, you simply transfer money from your bank account to your discount brokerage account, then log in, purchase your one ETF, and log out again.  It is that simple.

Are you paying fees on ETF purchases?

If you do, sign up with Questrade to enjoy commission free trading on all in one ETFs.

Final Thoughts

Comparing both products, it looks like Vanguard has met its match!  While both products are very similar (and awesome), it’s a toss up on which is better.  If you’ve already started a portfolio using Vanguard all-in-one products, I’d say to stay the course.  If you’re new to investing, then I think the iShares all-in-one ETF line will serve you well with a slightly lower MER and slightly more equity exposure outside of Canada.  Either way, investors win with the low fees and ease of use.  As mentioned earlier, combine it with a discount broker that offers commission-free ETFs, and you’ll save even more!

You decide, which product do you like better?  Vanguard or iShares?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Fred
1 year ago

Hi there!

I’m trying to decide which one I’m gonna buy in 2020… and I compared the performance of VGRO, XGRO and ZGRO from the past year… from February 19 2019 to January 9 2020.
This does not include the distributions (which is practically the same)… only the performance. Here are my findings :

ZGRO : 9.5%
XGRO : 9.1%
VGRO : 8.8%

According to these numbers, I think I would go with XGRO, but it seems that more investors are going with Vanguard (more volume)… Am I missing something here?

Best regards,
Fred

Editor
Kyle Prevost
1 year ago
Reply to  Fred

Hi Fred,

These annually returns are completely irrelevant. I know that’s a weird thing to say, but it’s 100% true. The small difference in these returns is attributable to small differences in the underlying asset mix and probably a slight tracking error as well. The respective asset mixes will return slightly different gains or losses each year, but we have no way of knowing which will win out year to year. Consequently, the best bet is simply to diversify your portfolio and go do more important stuff in life! Pick one and be satisfied that your investment dollar is spread out over thousands of investments all over the world.

Danny
1 year ago
Reply to  Fred

Further to Kyle’s point, which one you choose will probably depend on what discount brokerage you are using. For example, in a Qtrade account, XGRO is commission free and can be set up for a DRIP at no cost. While some discount brokerages offer commission free trading on all ETFs, if your current account already qualifies for no annual fees, and has at least one of them on their commission free list, you can’t really go wrong just taking the easy choice when everything else is so close.

Kay
2 years ago

Hi FT,

I am 24 years old and I am really hoping to step foot in the investment world this year. Right now, I have a TD balanced mutual funds for about $13000 and I am thinking of switching it to a higher return product such as the VGRO.
Also, after putting aside an emergency fund, I have another $10000 to add onto my portfolio. So, my question is does it matter what time I sell my mutual funds? Also, how long should we hold ETFs for? Are they good until retirement? If so, what are some short time investment that you would recommend (3-5 years?) for people around my age?

Thank you so much!
Kay

Corey Harris
2 years ago

Beware, iShares’ real cost is deceiving. ie today, XGRO has a MER of 0.84% + TER of 0.07% for a total expense of a whopping 0.91%. VGRO has a MER of 0.22% and a total expense of 0.25%.

ovsa
2 years ago

Hard to find a US currency balanced ETF available in Canada. Lots of mutual funds but no ETFs.
I would prefer to keep the account in US Dollars. Something similar to VBAL.

Any suggestions

Kat
2 years ago

Hi,
I’m 37. I’m balanced type. I have 25k celi, 40k reer and 15k reee (kid 8). Should I put everything in VBAL? Or mixed with VGRO or something else?!
Thanks!

RKB
2 years ago

Hi, I’m 50 years old with $275,000 in the bank, $66,000 maxed out in a regular TFSA account and own my own home with precarious contract employment prospects lying ahead down the road. I’ve never really invested before. I was thinking of opening a TFSA account at Questrade and putting the entire $66000 in VGRO or VEQT and hope for the best in 20 years. Is that too simplistic of a view? Just looking for some straight forward advice. Thanks

RKB
2 years ago
Reply to  FT

Hi, thanks for the reply. I’m on my own without a pension and have no set retirement age. However, I’m debt free with only typical living expenses to account for. I just thought putting my entire TFSA balance into a growth ETF like Vanguard’s new all equity VEQT and contributing the max amount each year would compound nicely over the next 20-25 years while still having cash on hand. I might not like it but would accept the volatility while the goal takes precedence. After the sale of some real estate, combined with the above, I should end up with around $400,000 – $450,000 that I could use to contribute the max amount to the TFSA each year. This represents my entire net worth and am trying to keep things simple from this point on. I was also thinking that since VEQT is just a couple of months old of buying in with the full TFSA amount that I have all at once (no dollar cost averaging). Thanks again

Chris
2 years ago

Do you feel these sort of funds are better suited for smaller balances? I’ve heard John Hood on BNN say a few times, these are great for small accounts. What drawbacks of putting large amounts in VGRO? What are the alternatives?

Chris
2 years ago
Reply to  FT

I’ve only heard him reference a dollar amount once for small accounts and that was $35K, I believe. If someone is considering placing most or all of their RRSP into VGRO, this would be well above $35K and into the 6 digits.

Perhaps at a higher amount, it may be better to build your own portfolio without all the diversification of the ETFs???

Johnny
2 years ago

The management fee of XGRO is listed on iShare’s website here and it’s 0.20%. The MER hasn’t been posted yet, but it shouldn’t be too much higher. https://www.blackrock.com/ca/individual/en/products/239447/ishares-balanced-growth-coreportfoliotm-fund

zudora
2 years ago

I’m a bit confused with the MER of XGRO, the Fact Sheet states it is 0.80% which seems a lot higher than VGRO at 0.25%?

FC
2 years ago
Reply to  zudora

I have the same question, the fact sheet does not show a better MER than VGRO.

Cris
2 years ago

If you look to the performance of all of them, you are better off with a GIS over 3%.
There are much better options in the market.

nobleea
2 years ago
Reply to  Cris

That’s not true at all. These are young funds, about a year old, and the past year has not been great for the market as a whole, so for sure the performance the last year hasn’t been great. But over the long term, there’s no comparison.
The 10 yr annualized return for VGRO would have been about 9% and for VBAL would have been about 7.8%. Over 20 yrs, they would have been identical at 5.2% annualized.