The best ETF choice for the investing masses
The 2026 ETF One-pager series concludes with asset allocation funds
I have seen hundreds of new investing products introduced in my 30 years of covering personal finance, but few made an impression like asset allocation ETFs.
Full credit to the iShares family of exchange-traded funds for introducing the idea of a fully diversified portfolio of ETFs bundled into a single fund of funds back in 2007. But these products were overly complex when first issued and didn’t gain much of a following. It wasn’t until Vanguard launched a series of asset allocation funds in 2018 that the category took off.
I needed about five minutes to decide the Vanguard AA funds were a revolution in investing. You can literally use one of these funds on its own for decades and have a great outcome. Just keep adding money, and let the fund managers handle the diversification for you.
The typical AA fund has exposure to Canadian bonds and, sometimes, a bit in U.S. and international bonds. Also in the mix are Canadian and U.S. stocks, plus international stocks from developed markets and, often, emerging markets as well. AA funds come in conservative, balanced, growth and all-equity versions. Pick one and go with it.
The final instalment in the 2026 ETF One-pager series looks at balanced AA funds, with a 60-40 mix of stocks and bonds. All-equity funds are extremely popular today, but that’s about the long bull market as opposed to sensibly diversified investing.
Growth funds, with an 80-20 mix of stocks and bonds, are popular as well. But while they’re great for younger investors, those approaching retirement or already retired should look hard at the more stable balanced AA fund. This is particularly true now, with stock markets at sky-high levels after a long rally.
The link to the one-pager on AA funds is just below. You’ll also find links to the previous segments, which covered Canadian bond and equity funds, and U.S. and international equity funds.
