Investing

Seeking advice ETF selection

  • Last Updated:
  • Apr 4th, 2019 1:31 pm
[OP]
Newbie
Apr 2, 2019
4 posts

Seeking advice ETF selection

Hi,

I'm new to the forum and noob when it comes to investing but this forum has been a great resource, thanks to all for the contribution. A family member has left me a chunk of money and I would like to invest it in some ETFs. I'm fairly conservative and looking to hold for long term.
I have picked out the following ratio of ETFs with my thinking. Any pros and cons would be appreciated:

30% XBB - Bond Index providing me a small stream of monthly cash, relatively safe
30% XSP - Diversitfy into the US, hoping to make big gains over longer period
20% VDY - Another source of regular yield and low MER
20% XTR - safe diversity

Thanks All.
6 replies
Member
Dec 26, 2013
469 posts
159 upvotes
Ottawa
Keep it simple, stick to one of the new all inclusive ETFs like VGRO, based on your risk profile, no rebalancing and less trading fees.
Deal Expert
Jan 27, 2006
16502 posts
9296 upvotes
Vancouver, BC
wilyam wrote: Keep it simple, stick to one of the new all inclusive ETFs like VGRO, based on your risk profile, no rebalancing and less trading fees.
The OP wants to be conservative and you're recommending the most aggressive ETF in that family?
Sr. Member
Mar 16, 2018
787 posts
870 upvotes
Hamilton
1) XBB is expensive and BMO's ZAG eats it for lunch at almost half the management fees and holds the same bonds. I would definitely use ZAG instead of XBB until Blackrock drops its expenses to compete.
2) Is there a reason you chose a hedged equity fund like XSP? Hedging equities is controversial and many claim it has little value, especially if you're holding for the long-term, so unless you have a strong informed opinion on it I'd stick with XUS or XUU. Hedging ex-Canada bonds, on the other hand, is always a good idea.
3) I'd just hold a total market Canadian ETF like XIC/VCN/ZCN over VDY. The reason being is that you stated you're looking to hold for the long term and a total market index has more capacity for growth by holding smaller companies. With that said, there's huge overlap between VCN and VDY because the Canadian market isn't very diversified so you'll get much of the same dividends, but VCN's MER is almost 1/4 the cost!

I'm going to second what's been said above and strongly recommend you research an all-in-one ETF like VBAL or XBAL. You stated that you're a noob but you've assembled kind of a complicated 4 fund deal. How much cash are you looking to lump into this? How do you know you have the patience to log in and execute trades/rebalance? You can always sell the all-in-one for literally a few dollars and switch over to a more complicated portfolio as your assets grow and the need to minimize expenses increases.
Deal Addict
Dec 1, 2016
1526 posts
1545 upvotes
craftsman wrote: The OP wants to be conservative and you're recommending the most aggressive ETF in that family?
Most aggressive would be VEQT. VGRO would be a good choice for a simple growth portfolio.
[OP]
Newbie
Apr 2, 2019
4 posts
Thanks all for your advice and options. One goal aside is to gain a steady stream of income, so that was one of the reasons for the mix. I'll be investing a chunk in the 100K's. I do like the growth of XSP/XUS but between these two it looks like XUS provides more benefit over the hedged?
Deal Expert
Jan 27, 2006
16502 posts
9296 upvotes
Vancouver, BC
Bubblegum86 wrote: Most aggressive would be VEQT. VGRO would be a good choice for a simple growth portfolio.
But they are asking for a conservative investment, not a growth one.... I wouldn't put VEQT in the same family as the VGRO, VBAL, or VCNS as these three have a certain amount of bond exposure to balance out of the portfolio.

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