True, during the March 2020 meltdown, both Canadian and U.S. REIT ETFs proved to be no shelter from the storm as tenants had difficulty making rent. The crypto runner-up to bitcoin is Ethereum, which Canadians can hold in registered accounts through, The panel did consider including Purpose Investments (, /B) as a possible All-Star, but it did not attract the minimum five votes out of eight required to qualify. That ship sailed a year ago. That was good for airlines, cruise ship stocks, hotels and travel/leisure stocks, but technology stocks—the haven throughout most of 2020—started to fall from their once-lofty levels. We have 52 picks this year, counting 44 main panel selections plus eight individual Desert-Island Picks. Back for the ninth edition, our star panellists reveal their top 52 picks among Canadian, U.S., international, fixed-income and all-in-one exchange-traded funds. ). The PWL team of Felix and Passmore again voted against including them, citing this article from PWL’s director of research, Raymond Kerzérho, which points out the average MER of low-volatility ETFs is 0.46%, compared to just 0.15% for core ETFs. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. They may be slightly more expensive, but they should do their job over time. That largely means products trading on the TSX, but can include the odd ETF trading on American stock exchanges. Self-directed investors can use a brokerage platform to buy and sell stocks, ETFs, mutual funds, options and other investment products. It currently yields 5.42% and has a MER of 0.22%. We don’t break these out in a separate category; you can find them as part of the mix in our Canadian, U.S. and International equity categories. He can be reached at. How? Kylie Purcell & Stacie Hurst Posted Apr 1, 2021. Investors familiar with the DFA group of mutual funds may know that some ex-DFA executives left to form American Century Investments, and the Avantis ETFs use a similar set of screens to reap the long-term returns of tilting portfolios to small-cap and to value. As a result, they tend to capture less upside than the broader stock market, but also less of the downside. Whatever REIT ETF you consider, pay close attention to the sector holdings. People who view this as a way to preserve wealth could check out the, Rebetez does not however view gold ETFs as electronic or paper, to the extent their holdings usually consist of Gold bullion held in custody. The Best Online Banks in Canada 2021; Best Canadian Chequing Bank Account for 2021; Best High Interest Savings Accounts 2021; Best Bank Account for Seniors in Canada; Fixed Income Faceoff: Bond ETFs vs GICs vs High Interest Savings Accounts; Easy Index Mutual Fund Portfolios with the Big Banks; Canadian Bank Accounts for Kids; Reviews Its average annual return since inceptions is 7.86% (as of October 31, 2020). /NYSE), which owns the major American airlines (Delta, American, etc. 1. Dividend ETFs have been savaged in the past year, with performance far worse than the broad index. padding: 0 !important © 2021 Enoch Media Inc. All Rights Reserved. margin: .5em; (then a magazine journalist and now a portfolio manager at PWL Capital) and I first conceived of the ETF All-Stars back in 2013. /NYSE). Cost: Mutual funds are generally more expensive than ETFs because the fund managers use an active management style with the intent to generate above-market returns. We should note that ETFs are by no means risk-free, and you should do your due diligence before investing. While not traded on a U.S. exchange, you can still buy it … While not designated an All-Star, Purpose’s new bitcoin ETF—the world’s first —was Dale’s Desert-Island Pick this year. justify-content: space-between; Top 7 Best ETFs In Canada . EM is dominated now by tech and consumer, two areas woefully absent from Canada’s profile. .best-etfs-2020-links { The crypto runner-up to bitcoin is Ethereum, which Canadians can hold in registered accounts through The Ether Fund (QETH.U/TSX). Best ETFs in Canada for 2021. The management fee for this platform is 0.40% to 0.50% per year depending on your account balance. We will monitor these funds, but none attracted the five out of eight votes necessary to become an All-Star so soon after their release. The panel is largely the same as last year’s, although we sadly bid adieu to portfolio manager Dave Nugent. Mark Seed is the blogger behind the My Own Advisor website, which caters to do-it-yourself investors and takes a hybrid approach to investing in both ETFs and individual securities. } The underlying ETFs making up VGRO as of October 31, 2020 are: Learn more about VGRO in this VGRO ETF review. “Look at rebalancing into stocks, though consider not doing it all in one go given the context.” That said, Rebetez doesn’t wholeheartedly endorse the idea that your investment strategy/ETF mix shouldn’t change based on market conditions. padding: .5em; While all the major banks in Canada offer online trading accounts, you could save on fees by using an independent broker e.g. Here are five of the top Canadian ETFs to buy now. Get a $75 cash bonus when you invest with Wealthsimple, Get $50 in free trades when you open a new account. As we pointed out last year, the love for low-volatility ETFs was not unanimous. It and several other specialized U.S.-based ARK ETFs were up 100% or more in 2020 but started to correct severely in the first few months of 2021, as the Recovery play took hold and investors redeployed profits from 2020 winners rotate from growth to value. That’s one for every week of the year! Pin. A year ago, travel-related stocks like airlines, hotels and cruise lines were the first to crater after the virus hit, as investors flocked to sectors more likely to hold up in a pandemic—especially technology companies that provide work-at-home solutions such as videoconferencing (Zoom), or laptops and peripherals (Apple, HP Inc.). While the panel as a whole passed on making TRVL an All-Star pick this year, Yves Rebetez. You will also receive our FREE eBooks. “However, in the long term, the volatility-dampening effect provided by the low-vol strategy will continue to play into the mathematics of compounded growth.”, Mark Seed of the My Own Advisor blog taps low-volatility ETFs for do-it-yourself investors like himself, who may use a hybrid strategy of ETFs and individual dividend-paying stocks. Open a Wealthsimple Trade Account + $25 Bonus, Invest with Wealthsimple + $75 Cash Bonus, 2. Share on Reddit Like myself, Dale Roberts believes some investors might consider adding specialized gold or REIT ETFs, although other panellists declined to consider these as possible All-Star candidates. We have 52 picks this year, counting 44 main panel selections plus eight individual Desert-Island Picks. (TRVL/TSX), as well as a U.S.-dollar version (TRVL.U), which invests in the recovery theme: airlines, cruise lines, resorts and gaming companies. I see it personally as a 3% to 5% max position in an extremely volatile cash section, which…if you have a sizeable portfolio, you don’t mind losing while otherwise opting to go ‘long’ the optionality of it continuing to defy gravity.” Similarly, the PUR Investing team were thumbs-down on crypto: “I don’t see the fundamental growth potential, either as a currency or an asset,” says Ioulia Tretiakova, “To me, it’s a tulip bulb craze.”. align-items: flex-start Facebook Twitter LinkedIn Print Pinterest Reddit. His writing has been featured or quoted in the Toronto Star, The Globe and Mail, MSN Money, Financial Post, Winnipeg Free Press, CPA Canada, Credit Canada, Wealthsimple, and many other personal finance publications. ARKW tends to own large (often 10%) positions in a concentrated number of high-growth companies like Tesla, Splunk and Roku, which introduces the risk of ARK creating its own bubble, says Rebetez. For those interested, refer to some of the REIT ETFs flagged in last year’s edition. Despite increasingly volatile stock markets, ever-fluctuating economic conditions and never-ceasing blitzes of new ETF products, our seasoned panel of eight ETF experts scarcely budged in their selection of funds that can be bought and held for the proverbial long term. My top picks for U.S. equity ETFs for Canadian investors are VFV and XUU. MoneySense is not responsible for content on external sites that we may link to in articles, . This is not a golden rule by any means, and a 50 year-old individual may tweak their asset allocation up or down depending on several other factors, including their life expectancy and returns expectations. This does not impact the objectivity of our reviews or evaluations, but it may impact which products or services we write about and where and how they appear on the site. Similar to stocks, you can purchase an ETF easily using an online brokerage platform at the price it is selling for (intraday price) when you place your order. VXC held 10,609 equities as of October 31, 2020, including: One international Equity ETF that excludes Canada and the U.S. is VIU (Vanguard FTSE Developed All Cap ex North America Index ETF). Companies in those sectors alone will not likely help investors trounce the index, but that’s not the point. A mix of 60% stocks & 40% bonds using 3 ETFs can perform like the world's best portfolios. Ticker: VCN. That largely means … Best ETFs in Canada for 2021 | MoneySense - Flipboard In January 2021, Harvest ETFs announced the. The team of Rebetez and Seed discussed the value premium some dividend ETFs provide and Dale Roberts has long been a fan of the Dividend Aristocrats ETFs available both in Canada and the United States. Journalists and qualified financial professionals produce the content. Just Released! Two of the best robo-advisors in Canada are: Wealthsimple: This company has more than $5 billion in assets under management and is the most popular robo-advisor in Canada. a.flex-item { Distillate U.S. While there are seven new main picks, plus three new Desert-Island Picks, a handful of ETFs were also cut from the 2020 lineup this time around (read on to discover which!). Maybe best to catch the next wave.…”, Or, as Ben Felix sums up: “The investment strategy/ETF mix shouldn’t change based on market conditions.”. Investors familiar with the DFA group of mutual funds may know that some ex-DFA executives left to form American Century Investments, and the Avantis ETFs use a similar set of screens to reap the long-term returns of tilting portfolios to small-cap and to value. As panellist Yves Rebetez explains, both aim for the same objective: to reduce downside risk while participating as much as possible to the upside. In particular, they discussed the ongoing role of low-volatility ETFs and the growing availability of All-in-One asset allocation ETFs that can mitigate risk; we continue to add to the number of suppliers of All-in-One solutions. Wealthsimple Trade or Questrade. The best ETFs in 2021 Invest for the short or long term with a high-performing ETF. } } “I know it’s an exciting time to invest when seemingly everything is going up. Below are some of the advantages and disadvantages of ETF: ETFs and mutual funds provide investors with diversification and index mutual funds try to replicate the performance of an index, just like most ETFs. As Yves Rebetez observes, “Bitcoin to me is not in any way a traditional ‘All-Star’ in that it doesn’t provide a high degree of, or broad, diversification. The PUR Investing team has long made the case for including low-volatility ETFs in our list, and in the 2020 edition convinced enough of the rest of the panel to expand the offerings to include BMO’s suite of low-vol ETFs to our list (in addition to ZLB, the U.S. version is ZLU and international is ZLI.) In the 2020 edition, Roberts chose the Vanguard Dividend Appreciation ETF (. No doubt ETFs have been a huge boon for investors, but with more than 700 ETFs now available, finding the best ETF in Canada can be a challenge. How many of these so-called experts agree with the ancient canard that emerging markets have the same profile as Canada’s distorted market (financials, energy, materials)? VAB invests in government and corporate investment-grade bonds. Some, including Dale and myself, also made the case for some of the new bitcoin and other cryptocurrency ETFs, which we own personally, as noted in this MoneySense article that ran earlier in 2021. By Jonathan Chevreau on April 1, 2021. We are up two from the even 50 in last year’s edition. Those intrigued by value might also check out the PWL team’s two Desert-Island Picks this year: Avantis U.S. Small Cap Value ETF (AVUV/NYSE Arca) and Avantis International Small Cap Value (AVDV). } Dale Roberts is a former investment advisor with Tangerine, founder of the Cut the Crap Investing blog and a regular MoneySense columnist. Wealthsimple offers multiple accounts including TFSA, RRSP, RESP, RRIF, LIRA, non-registered, and corporate investment accounts. My two top picks are the iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Total Stock ETF … /TSX) early in 2021, modelled on its long-established Dynatech fund in the U.S. © 2002-2021 Ratehub Inc. All rights reserved, Call this the pandemic-recovery edition. MoneySense continues to update and make changes to correct any factual errors. ), plus Air Canada and a smattering of international airlines and airports or airport services. The top-10 holdings of this ETF included Government of Canada Bonds, Province of Ontario bonds, and Canada Housing Trust No 1. We will monitor these funds, but none attracted the five out of eight votes necessary to become an All-Star so soon after their release. One strategy is to hold your age in bonds. He’s based in Lethbridge, Alta. display: none There are ETF options tracking the different Canadian indices including the S&P/TSX 60, S&P/TSX Capped Composite Index, and FTSE Canada All Cap Domestic Index. Inflation fears have also strengthened the case for real estate and REIT ETFs. VFV tracks the performance of the S&P Index and provides exposure to the largest-capitalization stocks in the United States. The goal was never to introduce change just for the sake of change, even in an industry famous for introducing marketing-oriented “flavour of the month” thematic funds. He also has an MSc. While the panel is enthusiastic about our All-in-One ETF picks, keep in mind asset-allocation funds largely consist of different combinations of stocks and bonds, and tend to have only market weights in precious metals stocks or publicly traded real estate companies. ... Canada and small cap stocks. Bonds (fixed-income assets) help to moderate the volatility (risk) of your portfolio. Failing businesses no longer need office space, which can impact industrial REITs; but other REITs focus on residential apartments, retirement living and specialized exposure like wireless tower REITs, data storage REITs and others, not all of which may be available in Canada. “Unless the COVID-19 crash brought to light a mismatch as far as allocation versus risk tolerance/capacity, stay the asset allocation course,” he says. In essence, it’s a Nasdaq tech fund and has done well over the years. As a result, they tend to capture less upside than the broader stock market, but also less of the downside. This ETF pays a monthly dividend income and aims to replicate the returns of the S&P/TSX Composite High Dividend Index. ETFs are a popular investment vehicle offering investors numerous benefits. * Terms & Conditions Apply. Vanguard S&P 500 ETF (VOO) Vanguard S&P 500 ETF seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks. For example, if you are not dependent on the income generated from your portfolio to pay for day-to-day expenses and are looking at a 15-30 year investment time frame, a growth portfolio with a higher than average risk profile may work for you. He uses gold as a currency: “Gold and the U.S. dollar have behaved way better than other ‘currencies’.” Given the devaluation of many currencies, he likes the. While there are an abundance of great ETFs available that fit the bill, here are my top 5 picks for 2020: Vanguard FTSE Canada All Cap Index ETF. For more information, please read, Calculating how much money you’ll need at retirement. Your email address will not be published. Learn how your comment data is processed. Star fund managers fade when their assets become too large to maintain their advantage. Nor did the Vanguard US Dividend Appreciation Index ETF (C$ hedged): VGH/TSX. As we pointed out last year, the love for low-volatility ETFs was not unanimous. is vice-president and director of quantitative strategies at PUR Investing Inc. She specializes in risk management and quantitative portfolio construction, and is lead author of several peer-reviewed papers in the Rotman International Journal of Pension Management and the Journal of Retirement. sees “merit in the theme and the diversification to it provided by Harvest.” Rebetez says he personally was long some airlines and cruise stocks for most of 2020, and many of the ETF’s holdings have already rallied significantly off earlier bottoms, a trend reinforced by the arrival of vaccines. Depending on the investments held by an ETF, its focus on specific industries or sectors, its investment management style, and its use of derivatives, an ETF may be classified as: There are 37 ETF providers in Canada, including Vanguard Investments Canada Inc., BMO Asset Management, BlackRock Canada, and Horizons ETFs Management (Canada) Inc. The very first ETF was launched in Canada in 1990 and the industry has come a long way since then. Yves Rebetez made the case for adding an international dividend ETF, as they often provide “superior yields to those available in the U.S., while also supplying a bit of a buffer against market volatility/downside risk.” Emerging market high yield/European or international dividend growers might also be considered, he added. The same would go for a Vanguard S&P 500 index fund, and VEQT or VBAL, and so on down the line. We don’t break these out in a separate category; you can find them as part of the mix in our, Readers should be aware of a distinction experts make between low volatility and minimum volatility. VCN provides exposure to large, mid, and small cap companies in Canada. March 15, 2021 December 1, 2020. The panel is largely the same as last year’s, although we sadly bid adieu to portfolio manager Dave Nugent. Taxes: ETFs are generally more tax-efficient than mutual funds. /NYSE Arca) pullback was a repricing of growth stories in the context of rising yields and inflation fears, plus the market shifting toward reopening stories and away from richly-priced stocks. ZDV’s top-5 equity holding (52 in total) as of November 13, 2020, are: Two other popular Canadian dividend ETFs are: You can read this review of HAL on Cut The Crap Investing. Furthermore, our editorial team does its best to ensure the information published on MoneySense.ca and other MoneySense properties is accurate. You can also learn more about what they offer in the CI Direct Investing review. PWL is a Canadian wealth management firm managing $3 billion in client assets using low-cost ETFs and index funds. div.widgets_on_page ul { Just in 2021, Bitcoin has already gained 90% and then subsequently lost a third of that gain for a year-to-date increase of 60%. } But careful – the best ETFs aren't only strictly the best performing ones. Top S&P 500 ETF – Vanguard S&P 500 ETF (VOO) 2020 performance: +18.3 percent. That was good for airlines, cruise ship stocks, hotels and travel/leisure stocks, but technology stocks—the haven throughout most of 2020—started to fall from their once-lofty levels. @media (max-width:991px) { With almost zero diversification, even in an ETF form, gold is a highly volatile investment. Similar to U.S. Equity ETFs, international equities add diversification to your portfolio and reduce home–country bias. If you’d rather not take on this responsibility, consider using the services of a robo-advisor. It has a 4:1 equity-to-fixed income asset allocation ratio and exposes you to 12,521 stocks and 17,336 bonds as of September 30, 2020. It is the largest and most liquid ETF in Canada and the first ETF (to begin trading) in the world. Disney is part of the recovery theme, but pure work-from-homes, like Zoom, Slack and telemedicine firm Teladoc, seemed to fall out of favor. Increased buy-and-sell transactions by mutual funds may result in capital gains distributions outside of your control. ETFs can hold stocks, bonds, commodities, precious metals, currencies, and other assets. Rebetez ran ETFinsight between 2011 and 2018: an independent website dedicated to the ETF space. As for bitcoin, that story is still being written, but the current price is more than three times higher than its last peak in 2017. Its top 5 holdings (76 in total) as of November 13, 2020 are: ZDV is designed for investors who are looking for regular income and long-term growth. appeared first on The Motley Fool Canada. If you are not using an all-in-one ETF solution, you could combine 2 or more of the ETFs listed to make up a portfolio that meets your needs. The top-5 stock holdings for VFV as of October 31, 2020, are: XUU gives investors exposure to the entire US stocks market, and it is designed to provide long-term capital growth. As Yves Rebetez observes, “, Bitcoin to me is not in any way a traditional ‘All-Star’ in that it doesn’t provide a high degree of, or broad, diversification. Find the best Canadian Dividend ETF for your portfolio. The top-5 stock holdings for VCN as of October 31, 2020, are: This equity ETF includes 224 stocks that constitute 95% of the Canadian equity market. Furthermore, our editorial team does its best to ensure the information published on MoneySense.ca and other MoneySense properties is accurate. Millions of Canadians visit annually to read our latest personal finance tips. The best example is the Bitcoin ETF (BTCC), which is based out of Canada. Best Canadian ETFs 2021 Start Investing. That’s one for every week of the year! Our core principles remain low cost, broad diversification and tax efficiency, whether in a roaring bull market, a bear market or something in between. He can be reached at [email protected], Share this article Another we mentioned in passing a year ago had a banner year: the Next Generation Internet ETF from Ark Funds (ARKW/NYSE). font-weight: 700; is CEO of Toronto’s PUR Investing Inc., which provides the ETF screener for the TMX Money website. By tracking this index, XDIV focuses on well-established companies with above average dividend yields and great track records of increasing their dividends over the long term. Roberts is willing to go for twice as much, as long as you take profits and rebalance on the way. However, sometimes prices and terms of the products are changed by the provider without notice. This account can be opened at any large bank in Canada. XUU is made up of the following underlying ETFs (comprising of 3572 stocks). Self-directed means that you control your investments. He joined the firm in 2013. Always consult with a licensed financial or tax advisor before making any decisions based on the information you read on this blog.Articles on SavvyNewCanadians.com may contain affiliate links. As your risk tolerance decreases, the portion of your portfolio held in fixed income securities and cash should increase. . seeking to provide broader diversification.” Since markets are not all equal, one or another of these strategies may be better suited to particular investors, depending on their temperament and the market. Those intrigued by value might also check out the PWL team’s two Desert-Island Picks this year: Avantis U.S. Small Cap Value ETF (, /NYSE Arca) and Avantis International Small Cap Value (. While Vanguard rates the volatility of this ETF as “low to medium” you should expect to see a lot more volatility compared to an ETF with a higher bond weighting. You can use it to trade thousands of stocks and ETFs listed on Canadian and U.S. stock exchanges for free. Questrade: This is Canada’s largest independent brokerage platform. As former panellist Dave Nugent observed in last year’s edition, investors should try to remove emotion and not get caught up in all the noise. The PUR Investing team has long made the case for including low-volatility ETFs in our list, and in the 2020 edition convinced enough of the rest of the panel to expand the offerings to include BMO’s suite of low-vol ETFs to our list (in addition to ZLB, the U.S. version is, .) Exchange-traded funds (ETFs) have made it possible for Canadians to invest at a fraction of the cost of a traditional mutual fund portfolio that you’d find at a big bank or investment firm. Rebetez says one reason for ARK’s equivalent U.S. flagship (ARKK/NYSE Arca) pullback was a repricing of growth stories in the context of rising yields and inflation fears, plus the market shifting toward reopening stories and away from richly-priced stocks. Up until now, the All-Stars have not drilled down on dividend ETFs, but this year they were under strong consideration. The team of Rebetez and Seed discussed the value premium some dividend ETFs provide and Dale Roberts has long been a fan of the, ETFs available both in Canada and the United States. Generally, however, our panellists are in favour of staying the course and sticking with the core approach this package has taken in previous years and not going overboard on specialized theme funds. “It’s an asset class with very unique qualities and it’s a very good portfolio diversifier,” Roberts concludes. from PWL’s director of research, Raymond Kerzérho, which points out the average MER of low-volatility ETFs is 0.46%, compared to just 0.15% for core ETFs. Despite its small stature, it has been one of the best performing ETFs in the country. Rebetez ran ETFinsight between 2011 and 2018: an independent website dedicated to the ETF space. As far as actual picks, keep in mind there may be some overlap in certain categories. Personally, I’ve always believed in a 10% strategic allocation to the precious metals asset class, but—taking a cue from recent crypto converts like Stan Druckenmiller or Paul Tudor Jones—believe a 1% to 3% position in crypto is plenty. Top ETFs For 2021. MoneySense continues to update and make changes to correct any factual errors. Share on Twitter Please, MoneySense is fully owned by Ratehub Inc. but remains editorially independent. Benzinga takes a look at the best Canadian ETFs to add to your portfolio. Too many faults here to cover them all. I am not a financial advisor. In addition to these five top Canadian ETFs, check out five super-cheap stocks as well! The winners for 2021 are: Top US Stock ETFs . VGRO ETF: The Best ETF in Canada (2021)? While the bear market of early 2020 was mercifully brief, it clearly put a scare into older investors hoping to retire in an era of minuscule interest rates, as well as emboldening a new generation of Robinhood investors who grabbed stock bargains and then enjoyed seemingly ever-upwards surges in stock prices. Jonathan Chevreau  on April 1, 2021, By  Comparable all-in-one growth ETFs are the iShares Core Growth ETF portfolio (XGRO) and BMO Growth ETF (ZGRO). Since inception (2010), it has returned 8.3% annually. Robo-advisors are online wealth management firms that utilize low-cost ETFs in creating your investment portfolio. Making sense of the markets this week: April 12, 2021, How to cultivate the right mindset for investing success, Making sense of the markets this week: April 5, 2021, Making sense of the markets this week: March 29, 2021. The top-5 stock holdings for ZCN as of November 13, 2020, are: If you are building your ETF portfolio, it is likely that you would want some U.S. equity exposure to benefit from growth in the world’s largest economy. Since there is no “one size fits all” approach to investing, you should do your own research or work with an investment advisor to determine what best suits your needs. ... and reviewing the ETFs that offer the best chance of building long-term wealth. To start investing in ETFs, you can open a brokerage account or invest using a robo-advisor. 1. In the 2020 edition, Roberts chose the Vanguard Dividend Appreciation ETF (VIG/NYSE Arca) as his Desert Island pick.