Investing 20K in ETF's

spraveenitpro wrote: ↑ If you have $20k to invest at this moment in ETF's how would you do it?
What ETF's Assuming that you are in your mid 30's,Mainly for retirement money in 30 years and I am ready to take maximum risk.

Maximum risk? JETS etf of US airlines, or o&g etf like xeg

spraveenitpro wrote: ↑ If you have $20k to invest at this moment in ETF's how would you do it?
What ETF's Assuming that you are in your mid 30's,Mainly for retirement money in 30 years and I am ready to take maximum risk.

I would put half in the Mawer Balanced Fund (MAW104) and half in ZBAL (BMO Balanced Portfolio ETF) or ZGRO (BMO Balanced Growth Portfolio ETF). Many portfolio managers and analysts have been dissatisfied with Vanguard's VBAL and VGRO single-ticket ETFs as their portfolio construction appears to sub-optimal and woefully underperforms the comparable single-ticket ETFs from BMO and BlackRock's iShares. The latter two are also cheaper.

Cheers,
Doug

dmehus wrote: ↑ Many portfolio managers and analysts have been dissatisfied with Vanguard's VBAL and VGRO single-ticket ETFs as their portfolio construction appears to sub-optimal and woefully underperforms the comparable single-ticket ETFs from BMO and BlackRock's iShares. The latter two are also cheaper.

Cheers,
Doug

First time I'm hearing about this, want to elaborate?

dmehus wrote: ↑ I would put half in the Mawer Balanced Fund (MAW104) and half in ZBAL (BMO Balanced Portfolio ETF) or ZGRO (BMO Balanced Growth Portfolio ETF). Many portfolio managers and analysts have been dissatisfied with Vanguard's VBAL and VGRO single-ticket ETFs as their portfolio construction appears to sub-optimal and woefully underperforms the comparable single-ticket ETFs from BMO and BlackRock's iShares. The latter two are also cheaper.

Cheers,
Doug

I have also never heard of this (VGRO worse than XGRO). Please tell us more.

rubix1225 wrote: ↑ I have also never heard of this (VGRO worse than XGRO). Please tell us more.

I personally chose XGRO because they're near identical, fee was a smidge lower and returns were a bit higher but I understand Vanguard is still the industry leader.

I'm sort of in a similar situation. Looking at mostly XQQ and VFV.

rubix1225 wrote: ↑ I have also never heard of this (VGRO worse than XGRO). Please tell us more.

The idea is they are like the Tangerine or TD e-Series index mutual funds in that are automatically rebalanced portfolio ETFs, with underlying asset allocations that, broadly speaking, mirror, to a degree, the global allocations of the underlying indices. They're designed to be single-ticket solutions that you can just add funds on a regular basis, without needing to buy multiple ETFs and rebalance accordingly. I could go on as there is more to say, but I'm tired. Does that help?

djdestroyer wrote: ↑ I personally chose XGRO because they're near identical, fee was a smidge lower and returns were a bit higher but I understand Vanguard is still the industry leader.

Vanguard Group may lead in AUM globally (they don't), but Canada, BMO's growth rate eclipses Vanguard and BlackRock. As well, Franklin Templeton Investments Canada launched some passive index ETFs that are price competitive and they are taking much of the growth rate away from Vanguard. If you look at the performance of VGRO and ZGRO and XGRO, VGRO trails the other two. There's no benchmark index for these single-ticket portfolio ETFs, but the underlying ETFs track different indices, with Vanguard generally using FTSE and the other two using MSCI and S&P. MSCI & S&Pseem to be the better, stronger, and more reliable indices. As well, Vanguard's individual passive ETFs are great, but they seem to not do very well in terms of these single-ticket ETFs and their active strategies. Thus, I prefer BMO or BlackRock.

Cheers,
Doug

spLook up the Tec ETF by TD great holdings at a great price. Sprinkle in a little Xit and your good.

dmehus wrote: ↑ Vanguard Group may lead in AUM globally (they don't), but Canada, BMO's growth rate eclipses Vanguard and BlackRock. As well, Franklin Templeton Investments Canada launched some passive index ETFs that are price competitive and they are taking much of the growth rate away from Vanguard. If you look at the performance of VGRO and ZGRO and XGRO, VGRO trails the other two. There's no benchmark index for these single-ticket portfolio ETFs, but the underlying ETFs track different indices, with Vanguard generally using FTSE and the other two using MSCI and S&P. MSCI & S&Pseem to be the better, stronger, and more reliable indices. As well, Vanguard's individual passive ETFs are great, but they seem to not do very well in terms of these single-ticket ETFs and their active strategies. Thus, I prefer BMO or BlackRock.

Cheers,
Doug

VGRO: 26.80 (Jan 2) 24.99 (May 8) -6.75% decrease
XGRO: 21.44 (Jan 2) 20.09 (May 8) -6.30% decrease
ZGRO: 33.07 (Jan 2) 30.89 (May 8) -6.59% decrease

I'm not trying to pick a fight but merely trying to see how ZGRO outperforms as I do invest in these type of ETFs. I typically think of only XGRO/VGRO in this space.

TrevorK wrote: ↑ VGRO: 26.80 (Jan 2) 24.99 (May 8) -6.75% decrease
XGRO: 21.44 (Jan 2) 20.09 (May 8) -6.30% decrease
ZGRO: 33.07 (Jan 2) 30.89 (May 8) -6.59% decrease

I'm not trying to pick a fight but merely trying to see how ZGRO outperforms as I do invest in these type of ETFs. I typically think of only XGRO/VGRO in this space.

VGRO had the highest target asset allocation to Canadian equities from the get go, so would be my least favourite even before TSX recovered slower than US indexes after the March drop. The latest data from their respective websites with regards to TSX Composite Index ETF components:

VGRO 23.8%, XGRO 19.24%, ZGRO 18.68%.

Also, ZGRO seems to have the highest dividend yield of the three, so its total return performance might be better than XGRO. Don’t (plan to) own any, so just an impartial observation

TrevorK wrote: ↑ VGRO: 26.80 (Jan 2) 24.99 (May 8) -6.75% decrease
XGRO: 21.44 (Jan 2) 20.09 (May 8) -6.30% decrease
ZGRO: 33.07 (Jan 2) 30.89 (May 8) -6.59% decrease

I'm not trying to pick a fight but merely trying to see how ZGRO outperforms as I do invest in these type of ETFs. I typically think of only XGRO/VGRO in this space.

@TrevorK I looked at the "since inception" and 1, 3, and 5 year return figures, not since January 2nd. Nevertheless, your numbers show the outperformance as well in the smaller decreases of ZGRO and XGRO relative to VGRO.

One of the portfolio managers I trust completely, John Hood, who previously used VGRO and VBAL in smaller client investment accounts, said he has been wholly dissatisfied with their performance and no longer recommends them. I like them in the sense that no rebalancing is notionally required, but I can't help but think one would be better off, using Vanguard at least, going with the underlying Vanguard ETFs and manually rebalancing.

Cheers,
Doug

freilona wrote: ↑ VGRO had the highest target asset allocation to Canadian equities from the get go, so would be my least favourite even before TSX recovered slower than US indexes after the March drop. The latest data from their respective websites with regards to TSX Composite Index ETF components:

VGRO 23.8%, XGRO 19.24%, ZGRO 18.68%.

Also, ZGRO seems to have the highest dividend yield of the three, so its total return performance might be better than XGRO. Don’t (plan to) own any, so just an impartial observation

VGRO: That's what I have seen as one of the big drawbacks as well is that they allocate more towards Canada, which I assume in the recent market run-up has hampered it's performance since the US has performed better. And, when you think about the scope of the Canadian economy on world markets it makes sense that we should not weight as heavy in the TSX.

Thanks for your feedback - I like the single fund approach but am always curious to hear more about them as I would not object to simply holding the underlying funds as well.

dmehus wrote: ↑ @TrevorK I looked at the "since inception" and 1, 3, and 5 year return figures, not since January 2nd. Nevertheless, your numbers show the outperformance as well in the smaller decreases of ZGRO and XGRO relative to VGRO.

One of the portfolio managers I trust completely, John Hood, who previously used VGRO and VBAL in smaller client investment accounts, said he has been wholly dissatisfied with their performance and no longer recommends them. I like them in the sense that no rebalancing is notionally required, but I can't help but think one would be better off, using Vanguard at least, going with the underlying Vanguard ETFs and manually rebalancing.

Cheers,
Doug

I too like that there is no rebalancing required and the simplicity is a big selling feature. But I haven't been too keen on VGRO myself after doing more research, and I'm always interested to hear more about them. On the surface they seem great but I am always hesitant about "on the surface" and have not been able to commit large amounts of my portfolio to these ETFs because of that.

If you're looking for Maximum risk - then go all equity and don't go with VGRO or XGRO as they both hold 20% Bonds to dampen the volatility. With the current super-low interest rates the Bond portion of the fund will lower your returns.

Buy some S&P500 (VFV) or Nasdaq (XQQ) and less weight on TSX (XIU) as a large portion of the index is in the Oil sector which has underperformed. If you preferred to be more Internationally diversified then add some VIU which excludes North American Index.

Rebalance your holdings manually on some regular basis if you've allocated across several funds for diversification.

Be careful with some of the Foreign funds if you're holding them in a RRSP or TFSA as funds that hold other funds have a Foreign Withholding Tax on Dividends drag on a fund's return as they are not able to recover taxes withheld on dividends received, whereas funds that invest in the actual stocks do not.

How does taxes work on a ETF like VFV, for both divideds and capital gains? I'm also curious how the taxes differ in RRSP vs. TFSA vs. RESP vs. non-registered accounts.

Thanks

reversi wrote: ↑ How does taxes work on a ETF like VFV, for both divideds and capital gains? I'm also curious how the taxes differ in RRSP vs. TFSA vs. RESP vs. non-registered accounts.

Thanks

It'll be allocated (cap gains, dividends, return of capital etc.) during tax time on your T3. If it's in a registered account then none of that matters.

WetCoastGuy wrote: ↑ If you're looking for Maximum risk - then go all equity and don't go with VGRO or XGRO as they both hold 20% Bonds to dampen the volatility. With the current super-low interest rates the Bond portion of the fund will lower your returns.

Buy some S&P500 (VFV) or Nasdaq (XQQ) and less weight on TSX (XIU) as a large portion of the index is in the Oil sector which has underperformed. If you preferred to be more Internationally diversified then add some VIU which excludes North American Index.

Rebalance your holdings manually on some regular basis if you've allocated across several funds for diversification.

Be careful with some of the Foreign funds if you're holding them in a RRSP or TFSA as funds that hold other funds have a Foreign Withholding Tax on Dividends drag on a fund's return as they are not able to recover taxes withheld on dividends received, whereas funds that invest in the actual stocks do not.

@WetCoastGuy The Vanguard Group, Inc., has serious corporate governance failings, particularly in their unwillingness to be financially transparent with respect to their annual revenues, expenditures, executive compensation, and the like, despite them effectively being a mutually owned cooperative, in a practical sense, without actually being a mutually owned cooperative, in a legalistic sense.

Investors would be better off with comparable BlackRock or BMO passive index ETFs.

Cheers,
Doug

Anyone have comments on the Mawer funds?