“Is it smart to hold a single exchange-traded fund in our RRSPs?”

Feb 11 22:02 2020 Print This Article

Q. My husband and I have been reading about the all-in-one exchange-traded funds (ETFs), specifically those from Vanguard. The Vanguard Growth ETF Portfolio (VGRO) looks appealing given the asset allocation and rebalancing this type of ETF provides. Our question is, would it be a poor decision to sell all our ETFs (Canadian, U.S., foreign, bonds) and transfer everything to VGRO? It would make life a little easier, but my concern is that as we draw down our RRSP we would lose the ability to look at several ETFs and determine which is best to sell at the time we withdraw money from our RRSPs.

–Cathy and Brian

A. All-in-one ETF portfolios have so many positive attributes, especially for do-it-yourself investors: they are extremely well-diversified, super-cheap and easier to manage than a portfolio of multiple holdings. Ironically, one of their biggest downsides is that they appear too simple to many investors. It’s almost like they’re too good to be true. But, Cathy and Brian, I can assure you it’s a perfectly good strategy to use an all-in-one ETF in your RRSP*, even if you are drawing down the account to generate income.

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Money Sense

MoneySense is a Canadian personal finance and lifestyle magazine published by Rogers Publishing Limited, a division of Rogers Communications.Written for Canadians who want to take financial control of their lives, MoneySense is Canada's best-selling investment and lifestyle magazine, helping readers make smart, informed decisions about how to get the most from their money. The magazine has received many awards, including multiple National Magazine Awards and CFA Society Toronto Awards.

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