Model ETF Portfolios

Canadian investors may find it difficult to find an advisor who advocates index investing. The good news is there are many low-cost, broadly diversified and tax-efficient ETFs available to DIY investors. The bad news is there are now too many choices

To make this decision easier for newbie investors, I’ve included a step-by-step process below, along with sample portfolios with various asset mixes. Since a number of these ETFs have limited performance data, I’ve calculated their hypothetical past performance using index returns minus the current fees.

Step 1: Choose your portfolio’s asset allocation.

Vanguard Canada has provided this online questionnaire to help you determine the right asset mix for your different investing goals.

Vanguard investor questionnaire

Step 2: Choose your portfolio’s complexity.

I’ve included the Vanguard and iShares Asset Allocation ETFs under the “light” portfolio option. These simple one-fund solutions are ideal for the majority of DIY investors.

However, if you’re a more experienced investor with a larger portfolio, you may be able to save on product fees and foreign withholding taxes by turning up your portfolio’s complexity to “ridiculous”

VANGUARD ASSET ALLOCATION ETF
ISHARES ASSET ALLOCATION ETF
Vanguard ETF
ISHARES ETF
Vanguard ETF Portfolios
ISHARES ETF PORTFOLIOS
VANGUARD ETF PORTFOLIOS
ISHARES ETF PORTFOLIOS

Step 3: Purchase your ETFs.

If you’re still not confident enough to place your first ETF trades, watching these tutorials may help to reduce some of the anxiety.

How to buy ETF

Step 4: Rebalance your ETF portfolio.

Set-it and forget it is a myth (unless you’re investing in a single asset allocation ETF). When you do need to rebalance your portfolio, let these downloadable calculators do the heavy lifting for you.

Rebalancing calculator