Investments
For a first time investor, there are plenty of options to choose from and the choices can get overwhelming quickly. However have no fret, I am here to help you narrow down your choices using the most cost effective solutions the industry has to offer.
Whenever I speak to a new investor I always point them in the direction of Exchange Traded Funds (ETFs). An ETF is as its name suggests, a fund that trades on an exchange (like the Toronto Stock Exchange for example). The number of ETFs has grown rapidly over the years but most people can get by with just a few. The benefit of certain ETFs is that they allow you to access many different holdings at once, therefore helping you to cost effectively diversify your investments. With an ETF you pay a provider a small fee every year to manage a portfolio on your behalf, which is often much cheaper than trying to do it yourself.
The four ETFs below are offered by some of the top providers in the country, and cover the biggest asset classes that a basic investor should have in their portfolio. You should be aware that equities are generally riskier than bonds and you should allocate your money based on the Framework.
The benefit of certain ETFs is that they allow you to access many different holdings at once, therefore helping you to cost effectively diversify your investments.
| Asset Type | Ticker | Name | Market Focus |
|---|---|---|---|
| Equities | XIU | iShares S&P/TSX 60 Index ETF | Canadian large-cap equities (top 60 firms) |
| ZSP | BMO S&P 500 Index ETF | U.S. large-cap equities via Canadian listing | |
| XAW | iShares Core MSCI All Country World ex Canada Index ETF | Global equities excluding Canada (U.S., developed, and emerging markets) | |
| Bonds | ZAG | BMO Aggregate Bond Index ETF | Broad Canadian investment-grade bonds (government and corporate) |
Asset Allocation ETFs have also grown in popularity in recent years. These are designed to package the underlying ETFs in weights that align with risk and return objectives. Instead of having to pick from the above ETFs yourself, the below products package them into one single product. They are sort of like a set it and forget it product. BMO, Vanguard, and Blackrock all offer similar iterations of the below products.
| Asset Type | Ticker | Name | Market Focus / Allocation |
|---|---|---|---|
| Equity‑heavy | ZEQT | BMO All‑Equity ETF | ≈100% equity, 0% bonds — diversified globally |
| Growth | VGRO | Vanguard Growth ETF Portfolio | ≈80% equity / 20% fixed income — diversified globally |
| Conservative | VCNS | Vanguard Conservative ETF Portfolio | ≈40% equity / 60% fixed income — diversified globally |
Platforms
For first-time investors, I would recommend two main platforms: Wealthsimple or Questrade. Both are low-cost, online-only brokerages that can help you get started on your investment journey. One advantage of Wealthsimple is that it currently offers some traditional banking products, making it more of a one-stop shop than Questrade (though this looks like it might change soon). That said, for a pure investment platform, you really can’t go wrong with either.