Did I overcomplicate my TFSA by using 4 ETFs?

I went with VFV 45%, XEF 25%, VCN 20%, VEE 10% instead of just buying XEQT.

My reasoning was fees. The blended MER comes out to roughly 0.13 percent versus about 0.20 percent for XEQT. But at my account size that saves me around 4 dollars a year, so the fee argument is basically nothing right now.

The other reason was that I wanted to actually understand what I own and be able to set the weights myself.

The tradeoff is I have to rebalance manually instead of the fund handling it, and I have four positions to track instead of one.

Was this worth it, or should I have just bought XEQT and left it alone for 40 years? Interested in hearing from people who went either way, especially anyone who started with one and switched to the other.

2,592 views

18 Comments

Kar Yung Tom@karyungtom · 4d

1. Yep 100%. Fees are overrated at that level.

2. If you're starting out, why try to set weights yourself? There's understanding what you own but how are you deciding to deviate from weights that are considered pretty good?

3. I've been in XEQT and now CAGE since 2020. Just letting it ride. There's no precise weight for the allocations but we know reasonable ranges for them.

And ultimately it depends on if you want to be an active or passive investor. I'm a passive investor who knows a lot about what I hold and investing in general.

Mr Financial

@mr.financial · 4dEdited

If you wanted it to be more similar to the all in ones, I would look at a total us market fund like VUN or XTOT or xuu instead of just large caps in vfv.

Xeqt has set rules and weights when rebalancing would kick in. If you are wanting less Cad exposure and more emerging market exposure... Doing it yourself works.

You could also use a US fund like Vt that is mcap weight or in Canada, xaw/vxc for world exposure mius Canada and add vcn/xic for Cad exposure.

I am all for simplicity. I think it's beautiful and intelligent.

And one edited side note.. the difference is more like 3.5-4bps. in the beginning... It makes very little difference until your portfolio is massive

Ade O

@kingadey · 4d

Hello Liam, your strategy works well if you have the time to manage it and don't let emotions dictate your decisions.

Saving 0.07% in MER over the long term makes sense, but only if those fee savings are actually realized. If the parent fund, $XEQT, ends up outperforming, you may have to accept that outcome and consider switching back to $XEQT.

Two approaches that could make this a bit easier:

1. Automate your purchases according to your target allocation. This is especially easy on platforms like Wealthsimple, which offers Recurring Investments.

2. Use dividends to rebalance. Instead of turning on DRIP, you can manually deploy your dividends to help bring your portfolio back to your target allocation.

You are on the right track, Liam. Best of luck, and happy investing!

Kishan Patel@kishangp97 · 4d

IMO everyone is trying to follow the trend to invest in XEQT as fomo, that is make sense though since you diversify globally but In my case I am using same XEQT strategy but bit different internal level as I can decide my exact distribution for each ETFs as I keep 55% in VFV, 15% in NASDAQ, 15% in VDY and 10% in INTERNATIONAL, I am not investing in emerging market as I am not bullish on it but eventually my portfolio is diversified same as XEQT but in my terms

Akshith Reddy@akshithrddy · 4d

I would say XEQT.

You must have an account to viewCreate an account for the full Blossom experience!

Join the conversation with 500,000+ other investors 💸

Create an account to get access to everything Blossom has to offer!

📊 Personalized algorithm based on your investing style, experience level and interests
📈 Powerful portfolio and dividend tracking tools
👀 See what top creators and others in the community are investing in