The one ticket ETF portfolios are game changers in Canada. You can get a more comprehensive and ‘complete’ portfolio by way of entering one ticker symbol. The fees are incredibly low, in the area of .20%. Yes, that’s about one-tenth of the cost of a traditional mutual fund in Canada. Of course most Canadians should ditch their mutual funds and head on over to their one ticket ETF of choice. The performance has been very strong. Today we’ll look at the performance of the one ticket ETFs for 2020.
A one ticket ETF portfolio will give you access to Canadian, US and International stocks. The stock market risks and volatility are managed by way of bond ETFs. Those bonds (depending on the ETF provider) can be by way of Canadian, US and International bonds.
Remember, stocks are the unruly and unpredictable toddlers, while the bonds are the adult in the room. We might also manage risks by way of cash, gold stocks and gold ETFs that hold physical gold, plus bitcoin and a basket of commodities and currencies. Personally, I am in the camp of managing the risks beyond the bond ETFs. You may choose to top up your one ticket ETF, that is a personal choice.
One ticket ETFs are managed portfolios.
When you invest in a one ticket ETF you are accessing a managed portfolio. Your job is to add the monies. The ETF provider will buy the stocks and bonds and will rebalance the portfolio on a regular schedule. Easy peasy. That’s why most Canadians will not or do not need an advisor or broker. Especially if you are in the accumulation stage and are simply filling up your RRSP and TFSA accounts.
It’s so simple and effective. When you do need financial planning you can pay as you go by way of a fee for service financial planner. You don’t have to fork over a percentage of your investment wealth every week. In fact, IMHO, most Canadians should not allow perpetual access to their pockets.
The one ticket ETF providers.
The most famous and adopted one ticket portfolios are offered by Vanguard. The following post will also help you learn how to choose the right ETF portfolio at the right level of risk. Here’s which Vanguard One Ticket ETF should you invest in? The following links are my reviews of each offering.
You might also look at the BMO One Ticket ETFs.
And new to the fold is the TD One Click Portfolios offered by TD Bank. The TD portfolios were launched in August so they will not be part of our full year 2020 evaluation.
If you have any questions about which one ticket might be right for you, please use that contact form. I’m happy to help. No charge. 🙂
The one ticket returns for 2020.
Even though we experienced the first modern day pandemic, returns for investment assets in 2020 was very strong. Here’s the 2020 year in review. In that post you can see the breakdown of returns for stocks and bonds in 2020.
The returns for the Vanguard, BMO and iShares offerings were quite similar in 2020. The leader of the pack (not to my surprise) in 2020 was Horizons. The portfolios are listed starting with lowest risk (more bonds) moving to the highest risk (all stocks, or mostly stocks).
The annual total returns for 2020.
- HCON 13.7%
- HBAL 14.7%
- HGRO 17.3%
In second place is iShares.
- XINC 9.4%
- XCNS 10.3%
- XBAL 10.6%
- XGRO 11.4%
- XEQT 11.7%
Next up is BMO.
- ZCON 9.8%
- ZBAL 10.3%
- ZGRO 10.7%
And then Vanguard.
- VCIP 8.4%
- VCNS 9.4%
- VBAL 10.2%
- VGRO 10.9%
- VEQT 11.3%
Returns in 2020 ranged from 8.4% for a very conservative portfolio, up to 17.3% for Horizons one ticket growth ETF.
What has your mutual fund done for you lately?
It’s time to check the performance of your portfolio against these one ticket offerings. If you are invested in a high fee mutual fund, it’s likely that the one ticket portfolios beat your mix. That said, the greater benefit will be shown over time as the effect of high fees compounds over time. It’s negative compounding. You can check out the T-Rex fee calculator on the site of Larry Bates.
Larry is the author of the very popular and must read Beat The Bank. Larry reminds us that fees are a wealth destroyer.
If you like the idea of the low fee ETF portfolios but also want some hand holding and advice, you can check out one of the Canadian Robo Advisors.
The Weekend Reads.
We start with some incredible research from The Sunday Investor. He looked at the performance of Canadian dividend growth stocks. It is shown that for the period tested companies with the best 5-year dividend growth rates outperformed the market by almost 4% annual.
Here’s The Sunday Investor Newsletter.
I believe that research was inspired by this post from Rob Carrick in the Globe and Mail on the Canadian Dividend Doublers. That is, Canadian companies that had doubled their dividend payment over a ten year period.
Here’s that list of companies.
- Canadian Tire Corp. Ltd.
- Canadian National Railway Co.
- Metro Inc.
- Enbridge Inc.
- Atco Ltd.
- Toronto-Dominion Bank
- Intact Financial Corp.
- Telus Corp.
- Canadian Utilities Ltd.
- National Bank of Canada
- Manulife Financial Corp.
- Royal Bank of Canada
- Emera Inc.
- Imperial Oil Ltd.
- TC Energy Corp
Rob Carrick is also the guest on The Maple Money Podcast.
And here’s a very interesting post from John DeGoey on findependence hub. Fear the GIC refugee renaissance.
The only thing that’s worse than buying something that will not, under any circumstances go up is to desperately plow money into something that is riskier – meaning it could very easily go down.– John DeGoey
And this week on My Own Advisor Mark looked at the tax efficient ETF suite at Horizons.
On GenYMoney a guide to tax efficient investing in Canada.
At Retirement Manifesto Fritz bought a second home, even though they are certainly in retirement. Discovery why, and how that did make sense.
On TEBI, The Evidence Based Investor – the problem with stocks like Tesla.
On Million Dollar Journey 8 staple blue chip Canadian dividend stocks.
From Professor Galloway – Stupid.
The CBC offered this very good post. Will we get a version of the roaring 20’s when we make it through the pandemic?
‘Like the roaring ’20s,’ but not for everyone: What history tells us about life after COVID-19.
There is a lot of pent up demand as I stated in my weekly MoneySense post, but not everyone will be well-positioned to join in. In my latest for column I had a look back at 2020 and offered some thoughts on 2021.
Thanks for reading. You can follow this blog by way of that subscribe button. And don’t be shy, we’ll see you in the comment section. Did your 2020 returns stand up to the performance of the one tickets ETFs for 2020?
How to support Cut The Crap Investing.
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Check out EQ Bank for those who want to make their cash work a lot harder. The current high interest savings account rate is 1.5%. EQ Bank recently introduced RRSP and TFSA accounts with a rate of 2.3%. You’ll also find GICs.
In 2021, those Robo Advisors are still the answer for the majority of Canadians stuck in high fee mutual funds.