This article provides general information about investing in Canada. It is not personalized financial advice or a recommendation to buy or sell any investment.
Investing can quickly become complicated. You need to decide how much to hold in stocks and bonds, divide your money between Canada and international markets, select several funds, and periodically rebalance everything.
All-in-one ETFs simplify those decisions. With a single purchase, you can own a diversified portfolio containing thousands of securities while maintaining a predetermined allocation between stocks and bonds.
The main challenge is therefore not finding the ETF with the best recent return. It is choosing an allocation you can continue holding when markets go through a difficult period.
Key takeaways
- An all-in-one ETF combines several underlying ETFs into one fund.
- It generally provides exposure to Canada, the United States, international developed markets and emerging markets.
- The fund rebalances itself automatically.
- The major Canadian providers offer portfolios ranging from approximately 40% to 100% stocks.
- Your stock-and-bond allocation generally matters more than choosing between Vanguard, iShares and BMO.
- A portfolio composed entirely of stocks can experience large declines.
- The right portfolio should match your goals, time horizon, financial capacity and ability to tolerate losses.
What is an all-in-one ETF?
An all-in-one ETF, also known as an asset allocation ETF, is a complete investment portfolio traded under a single ticker symbol.
The fund manager combines several types of investments, which may include:
- Canadian stocks;
- U.S. stocks;
- stocks from international developed markets;
- emerging-market stocks;
- Canadian and sometimes foreign bonds, depending on the portfolio.
The fund manager then monitors the portfolio and rebalances it when necessary.
Suppose your ETF targets an allocation of 80% stocks and 20% bonds. If rising stock markets push the equity allocation above its target, the fund makes the necessary adjustments. You do not need to manually sell one investment and buy another.
That is what makes one ETF function as an entire portfolio.
Why have all-in-one ETFs become so popular?
Before these funds became available, a Canadian index investor often needed three or four different ETFs to cover Canadian, U.S. and international stocks as well as bonds.
That approach still works, but it requires more decisions and ongoing maintenance.
All-in-one ETFs offer several advantages.
Immediate diversification
One fund can provide exposure to thousands of stocks and bonds across many countries, economic sectors and currencies.
Automatic rebalancing
The fund maintains its target asset allocation without requiring regular intervention from the investor. The asset allocation ETF families from Vanguard and iShares are specifically designed as diversified, automatically rebalanced portfolios.
Relatively low costs
The major Canadian asset allocation ETFs have considerably lower fees than many traditional mutual funds. Exact costs can change, so always review the fund’s official documents and current management expense ratio, or MER, before investing.
Fewer decisions
You do not need to decide each month whether to buy more Canadian, U.S. or international stocks.
This is also a behavioural advantage. Fewer decisions mean fewer opportunities to chase recent returns or continually modify a reasonable investment strategy.
The main categories of all-in-one ETFs
The three major Canadian families follow a similar structure:
| Approximate profile | Stocks | Bonds | Vanguard | iShares | BMO |
|---|---|---|---|---|---|
| Conservative | 40% | 60% | VCNS | XCNS | ZCON |
| Balanced | 60% | 40% | VBAL | XBAL | ZBAL |
| Growth | 80% | 20% | VGRO | XGRO | ZGRO |
| All equity | 100% | 0% | VEQT | XEQT | ZEQT |
These are target allocations and can vary slightly. The fees, underlying holdings and geographic weights also differ among providers.
Consult the current fund information from Vanguard, iShares and BMO before making an investment decision.
How should you choose your stock allocation?
The most important choice is generally not VEQT versus XEQT or VGRO versus XGRO. It is deciding how much of your portfolio you can reasonably hold in stocks.
Consider three factors together.
1. Your investment time horizon
When will you need the money?
Money needed within the next few years should generally not depend entirely on the stock market. A decline could happen at the wrong time and force you to sell at a loss.
A longer horizon gives you more time to recover from market declines, but it does not prevent those declines from happening.
Money intended for an upcoming home purchase, a near-term expense or an emergency fund usually requires more stability than a stock-heavy ETF can provide.
2. Your financial capacity to take risk
Your capacity for risk depends on factors such as the stability of your income, your debt, your emergency savings and the importance of this portfolio to your overall finances.
Someone with stable income, adequate emergency savings and no need to withdraw from the portfolio for several decades may have a greater capacity to withstand losses than someone approaching regular withdrawals.
3. Your emotional tolerance for losses
It is easy to believe you have a high risk tolerance while markets are rising.
Ask yourself a more concrete question: what would you do if a $100,000 portfolio temporarily fell to $70,000 or less?
If that possibility would cause you to sell, a portfolio composed entirely of stocks may be too aggressive, even if you have a long time horizon.
The Canadian Investment Regulatory Organization’s Investor Questionnaire considers your goals, time horizon, financial capacity and tolerance for losses. It is a useful starting point, though it is not a substitute for a personalized assessment.
Which allocation might fit your circumstances?
Approximately 40% stocks and 60% bonds
This allocation places greater emphasis on stability. It may suit an investor with limited tolerance for fluctuations or a stronger need to preserve capital.
That does not mean the portfolio cannot lose money. Stocks and bonds can both decline.
Approximately 60% stocks and 40% bonds
A balanced portfolio seeks a compromise between growth and stability. It may appeal to investors who want meaningful exposure to stock-market growth without accepting the full volatility of an all-equity portfolio.
Approximately 80% stocks and 20% bonds
This allocation places greater emphasis on long-term growth. The bond component may soften some fluctuations, but the portfolio remains heavily exposed to stock markets.
100% stocks
An ETF such as VEQT, XEQT or ZEQT provides global diversification but no bond allocation.
These portfolios can experience deep and prolonged declines. They are suitable only for investors with an appropriately long horizon, enough financial capacity to withstand losses, and the discipline to remain invested.
Being young does not automatically make an all-equity portfolio appropriate. Your behaviour during a market decline matters as much as your age.
VEQT or XEQT: Which is better?
VEQT and XEQT pursue a similar goal: providing a globally diversified portfolio composed entirely of stocks. Both hold Canadian, U.S., international and emerging-market equities.
They are not identical. Differences can include:
- the allocation to Canada;
- the allocation between the United States and other markets;
- the underlying ETFs;
- the management expense ratio;
- distribution frequency;
- the methods used to maintain the target allocation.
Those differences can affect returns from one year to another, but no one knows in advance which structure will produce the better long-term result.
For many investors, selecting an appropriate asset allocation, investing consistently and staying with the fund will probably matter more than optimizing every difference between VEQT and XEQT.
VGRO or XGRO: The same principle applies
VGRO and XGRO both target approximately 80% stocks and 20% bonds. Their underlying construction differs slightly, just as it does with their all-equity counterparts.
The important question remains: does an 80/20 portfolio suit your circumstances?
Repeatedly switching between VGRO and XGRO because one recently performed better is more likely to create unnecessary transactions and encourage performance chasing than to improve your financial plan.
Which accounts can hold an all-in-one ETF?
An all-in-one ETF can generally be held in accounts such as:
- a TFSA;
- an RRSP;
- an FHSA;
- an RESP;
- a non-registered investment account.
The account and the investment serve different purposes.
The account determines the applicable tax rules. The ETF determines what you own and how much investment risk you take.
You can therefore hold the same ETF in multiple accounts. However, the tax consequences, time horizon and purpose of each account may differ.
Asset location can become relevant for a large portfolio or a complex tax situation. There is no universal portfolio value at which a more complicated strategy automatically becomes worthwhile.
All-in-one ETF, robo-advisor or DIY portfolio?
All-in-one ETF
This option can work well for a self-directed investor who is comfortable opening a brokerage account and making or automating purchases.
Advantages:
- low fees;
- broad diversification;
- automatic rebalancing;
- a simple portfolio.
Limitations:
- you must make or automate the purchases;
- you must select your own risk level;
- there is no advisor to discourage you from selling during a market decline.
Robo-advisor
A robo-advisor constructs and manages a portfolio based on information collected through a questionnaire.
It usually costs more than purchasing an ETF directly, but it may provide a more automated experience and some degree of support.
A portfolio of several ETFs
Building your own portfolio gives you more control over each component and may reduce costs slightly.
In exchange, you must determine the allocations, place the trades and rebalance the portfolio. That additional flexibility can also encourage unnecessary changes.
How to buy an all-in-one ETF
The general process is straightforward:
- Choose the type of account that matches your goal.
- Open the account with a Canadian brokerage.
- Transfer money into the account.
- Search for the ticker symbol of your chosen ETF.
- Confirm the fund’s full name before placing the order.
- Review the brokerage’s trading fees and procedures.
- Make the purchase.
- Schedule recurring deposits and purchases if your platform supports them.
Do not treat an ETF purchase as an emergency. Check the bid price, ask price and order type you are using, especially when the market is volatile or closed.
If you are still selecting a brokerage, see Best Investment Platforms and Brokers for Canadians.
Common mistakes to avoid
Choosing based on last year’s performance
The recent winner will not necessarily lead during the next period. Past returns cannot tell you which fund will perform best next.
Overestimating your risk tolerance
Choosing 100% stocks only because it has the highest expected return can lead to panic selling during the next major decline.
Holding several all-in-one ETFs
Owning VEQT, XEQT and VGRO together does not necessarily provide better diversification. These funds already cover many of the same markets.
Combining them mainly makes your true asset allocation more difficult to understand.
Adding ETFs without a clear purpose
Adding a technology, dividend or sector ETF to an all-in-one portfolio may increase your exposure to securities the portfolio already owns.
Before adding another fund, ask what specific problem it is supposed to solve.
Constantly changing your strategy
A simple portfolio cannot eliminate fear, impatience or the temptation to follow market trends. It can reduce the number of opportunities you have to act on those impulses.
That is one reason simplicity can improve investor behaviour.
Are all-in-one ETFs always the best choice?
No. They are useful tools, but they are not appropriate for every situation.
A different strategy may make sense if:
- your goal is short term;
- you are already making regular withdrawals;
- your tax situation requires specialized planning;
- you want precise control over each asset class;
- you need comprehensive financial advice;
- you cannot tolerate the fluctuations of your chosen portfolio.
Portfolio size alone does not determine whether an all-in-one ETF is still appropriate.
Why consider index investing?
An all-in-one ETF does not guarantee a return. It provides a simple way to capture the returns of broad markets while controlling costs and diversification.
SPIVA data regularly show that a large majority of actively managed Canadian equity funds fail to outperform their benchmark over long periods. In the SPIVA Canada Mid-Year 2025 Scorecard, 97.6% of Canadian equity funds in the sample underperformed their benchmark over the ten-year period.
That does not mean an index fund will always make money. It demonstrates how difficult it is to identify in advance the active managers who will beat their benchmark after fees.
Simplicity as a behavioural advantage
The most underestimated advantage of an all-in-one ETF may not be its cost. It may be that the portfolio gives you fewer reasons to intervene.
When every region has its own ETF, it becomes tempting to favour the market that recently performed well, stop buying the market that declined, or rebuild your portfolio after every new book or article.
A single fund does not eliminate those impulses. It simply makes acting on them more difficult.
I learned that the more I searched for the perfect portfolio, the more reasons I found to change a portfolio that was already reasonable. Eventually, I realized that a good portfolio must work financially while remaining simple enough for its owner to hold.
You can continue that story in:
- Less Is More: Why Simplicity Works in Investing
- The Search for the Perfect Portfolio: Why Good Enough Can Be Better
- When Investing Becomes Too Much: Why I Stopped Tinkering
Frequently asked questions
What is the best all-in-one ETF in Canada?
There is no single best fund for everyone. The decision begins with your stock-and-bond allocation, followed by secondary considerations such as fees, fund construction and geographic weights.
Is an all-in-one ETF suitable for a beginner?
It can suit a beginner who understands the risks, has an appropriate time horizon and wants to manage a simple portfolio independently. Selecting the appropriate risk level remains an important decision.
Can you hold VEQT in a TFSA?
Yes. VEQT and other Canadian all-in-one ETFs are generally eligible for registered accounts. That does not automatically mean an all-equity portfolio is appropriate for your goal or time horizon.
Should you choose VEQT or VGRO?
VEQT is essentially an all-equity portfolio, while VGRO targets approximately 80% stocks and 20% bonds. The appropriate choice depends on your financial and emotional ability to tolerate losses and when you expect to need the money.
Should you buy more than one all-in-one ETF?
Usually, one fund matching your target asset allocation is sufficient. Combining several all-in-one ETFs can make your actual risk level less obvious without meaningfully improving diversification.
Do you need to rebalance an all-in-one ETF?
The fund manager rebalances the investments within the ETF, so you do not need to rebalance its components yourself. You should still reconsider your overall risk profile if your goal, time horizon or financial circumstances change.
Conclusion
An all-in-one ETF can combine global diversification, automatic rebalancing and a consistent asset allocation in one investment.
Its main advantage is not producing the best return every year. It is making a reasonable investment plan easier to follow for many years.
Start by determining the level of risk that genuinely suits your circumstances. Then compare the funds within that category. Once you have chosen, invest consistently and avoid turning small differences between providers into an endless search for the perfect portfolio.