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Investing in stocks involves a certain degree of risk, whether you are short-term or long-term. People buy individual stocks to make money from price appreciation. The general rule is to buy low and sell high.
However, selecting stocks to build a portfolio is tedious, if not time-consuming. More importantly, it requires monitoring and self-management. Fortunately, the introduction of exchange-traded funds (ETFs) has made life easier for investors who want to simplify the investment process.
A single ETF can provide broad diversification and simplify the selection process. Today, major ETF issuers and professional fund managers like black rock, Bank of Montrealand Avant-garde offer all-in-one ETFs. Along with their growth solutions, investors can get steady streams of income through dividend payouts.
The ideal choice for risk averse investors and beginners is iShares Core Conservative Balanced ETF Portfolio (TSX:XCNS) because the risk rating is low. Your exposure is to a portfolio of ETFs broadly diversified by asset class. The multi-asset package is made up of equities (41.44%) and fixed income securities (58.44%).
XCNS seeks to provide long-term capital growth and income. BlackRock primarily invests in one or more ETFs which it also manages. Monitoring is continuous while rebalancing is automatic, if necessary, to maintain target asset class weightings. If you invest today, the cost per share is $21.36. This all-in-one ETF pays dividends quarterly. Currently, the yield is 1.88%.
Low to medium risk
The portfolio strategy of BMO Growth ETFs (TSX:ZGRO) is the same as BlackRock’s XCNS, although the risk indicator is low to medium. BMO Global Asset Management invests in BMO global equity and fixed income ETFs. This growth ETF with indexed asset allocation is designed to provide long-term capital appreciation.
The difference between ZGRO and XCNS is that it favors equities (80.82%) more than fixed income securities (19.18%). As for weight percentages, BMO S&P 500 ETF (34.03%) and BMO S&P/TSX Capped Compound Index ETF (22.28%) are the top two holdings.
In terms of performance, ZGRO’s total return in 3.16 years is a decent 32.67% (9.37% CAGR). At $37.10 per share, the dividend yield is a modest 2.34%.
60/40 Asset Allocation
Under normal market conditions, Vanguard Balanced ETF Portfolio (TSX:VBAL) strives to maintain a strategic long-term allocation of equities (60%) and fixed income (40%) at all times. This asset mix should help the fund achieve its investment objective of providing long-term capital growth with a moderate level of income.
Vanguard has the discretion to replenish or rebalance the portfolio from time to time. VBAL, through its fund manager, invests in underlying Vanguard funds. Additionally, large-cap companies (83.41%) represent the largest market capitalization. For weighted exposure, the financial (20.3%) and technology (17.6%) sectors have the highest percentages.
As of this writing, VBAL is trading at $28.84 per share and paying a dividend of 2.04. The distribution frequency is also quarterly.
BlackRock’s XCNS, BMO’s ZGRO and Vanguard’s VBAL are down at least 6% year-to-date. Still, if you want less hassle, broad exposure, and a moderate income stream, you can choose one of these three all-in-one ETFs.