All-in-one ETFs

An all-in-one ETF bundles many other individual ETFs together. It can provide more diversificationDiversification A way of spreading investment risk by by choosing a mix of investments. The idea is that some investments will do well at times when others are not.+ read full definition than a regular ETF. It may also offer lower fees and the convenience of automatic rebalancing. All-in-one ETFs can be bought and sold on the stock exchangeStock exchange A market in which securities are bought and sold.+ read full definition, just like many other types of ETFs.

All-in-ones ETFs are regularly  rebalanced to ensure that they maintain their investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition objectives. An all-in-one ETF will typically contain an assortment of Canadian and international bonds, stocks and other investments. It can also be designed for a specific investment objective, categorized as income, conservative, balanced and growth.

4 types of all-in-one ETFs

The portion of the fund invested in stocks versus bonds determines its category. As with any type of investment, your own risk profile, investment goals, time horizonTime horizon The length of time that you plan to hold an investment before you sell it. This may be a brief period of time or span as long as decades, depending on your financial goals.+ read full definition and overall fit with your portfolioPortfolio All the different investments that an individual or organization holds. May include stocks, bonds and mutual funds.+ read full definition will determine whether an all-in-one ETF may be suitable for you.

Income. Income-focused funds produce regular income and little to modest long-termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition capital growth. They typically have a much higher proportion of bondBond A kind of loan you make to the government or a company. They use the money to run their operations. In turn, you get back a set amount of interest once or twice a year. If you hold bonds until the maturity date, you will get all your money back as well. If you sell…+ read full definition ETFs, generally holding 90-100%.

Conservative. Conservative-focused funds provide a combination of income and modest long-term capital growth. These generally have a higher proportion of bond ETFs to stockStock An investment that gives you part ownership or shares in a company. Often provides voting rights in some business decisions.+ read full definition ETFs, in the range of 50-60%.

Balanced.  Balance-focused funds contain more stocks, for example 70-60% stock ETFs and 30-40% bond ETFs.  They seek to provide long-term capital growth with a moderate level of income.

Growth. Growth-focused funds target long-term capital growth and typically have 80-100% of their funds in stock ETFs.

Other features

  • As of December 2019, most all-in-one ETFs currently available are rated as low, low-to-medium, or medium risk. For information on a specific ETF’s risk rating and holdingsHoldings Shares or other interests in a business. Also refers to investments in a portfolio.+ read full definition, you can check the fund’s ETF Facts on your financial institution’s website.
  • Management expense ratios for these products tend to be low. You could also incur trading costs.
  • Like other mutual funds, all-in-ones can be purchased through discount brokerages, financial institutions and some fee-only advisors.

Key Point

All-in-one ETFs can offer more diversification compared to regular ETFs.

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