This is not financial advice. It is what I have learned after holding ETFs in my own Wealthsimple TFSA since 2018 and what I'd tell a friend who asked me where to start.
The best thing about buying ETFs on Wealthsimple is that every trade is commission-free. At a bank brokerage you pay $9.99 each time you add to your position. On Wealthsimple you can invest $50 a week with no fees eating into small contributions. That changes what is worth doing.
All-in-one ETFs hold a diversified mix of global stocks and bonds in a single fund. You buy one thing and it rebalances itself automatically. I think these are the right choice for the majority of Canadian investors.
| ETF | Stocks / Bonds | MER | Best For |
|---|---|---|---|
| XEQT | 100% stocks | 0.20% | Long horizon, growth focused |
| XGRO | 80% / 20% | 0.20% | Growth with slight stability |
| XBAL | 60% / 40% | 0.20% | Balanced, moderate risk |
| VEQT | 100% stocks | 0.24% | Long horizon, Vanguard preference |
| VGRO | 80% / 20% | 0.24% | Growth with slight stability |
I hold XEQT in my own TFSA. Long time horizon, don't need the money anytime soon, 100% global equities gives the best expected return over 20+ years. The 0.20% MER means I pay $20 a year per $10,000 invested. Essentially nothing.
Some investors prefer to control their own allocation. A simple three-fund Canadian portfolio:
The downside is manual rebalancing. When markets move your allocation drifts and you have to buy and sell to get back to target. The all-in-one approach handles this automatically for a negligible cost difference.
XEQT is the most popular choice for growth investors with a long time horizon. Diversified across thousands of global companies, 0.20% MER, commission-free on Wealthsimple. If you want bonds mixed in, XGRO or XBAL are solid alternatives from the same iShares family.
If you are comfortable with a 10-minute decision like choosing between XEQT and XBAL, self-directed saves you 0.5% per year in Wealthsimple's management fee. If the whole thing feels overwhelming, managed portfolios are a legitimate and much cheaper alternative to bank mutual funds while you get comfortable.
Yes, but Canadian-listed ETFs like XEQT are generally better for a TFSA. US-listed ETFs are subject to a 15% withholding tax on dividends inside a TFSA. Canadian-listed ETFs that hold US stocks avoid this issue.
No. All growth inside a TFSA is completely tax-free — dividends, capital gains, interest. Withdrawals are also tax-free.
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