TD ETFs vs IShares ETFs or Vanguard ETFs (Which One Is Best?)

I recently had a reader ask if I could analyze which one was better, the TD ETFs, iShares ETFs or Vanguard ETFs. For the purposes of this post, I will look at the all-in-one ETF solutions amongst the ETF providers.

ETFs are called exchange traded funds. They are like mutual funds except they are bought and sold on the stock exchange. They are a basket (sometimes thousands) of companies in one fund.

What are all-in-one ETF solutions? All-in-one ETFs make investing very easy because they automatically rebalance for you. They have a management fee and higher MER (management expense ratio) compared to something like $VTI (Vanguard Total Stock Market ETF) because rebalancing is not embedded in $VTI.

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Pretty much all you need to do with all-in-one ETFs is to save your money, contribute to your portfolio, and watch your money compound over time. Beautiful!

Anyway this post will look at the TD ETFs, the iShare ETFs, and the Vanguard ETFs and which one might would give your portfolio the largest growth and be the lowest cost over time. People tend to underestimate how much the investment management fees can add up- but when your portfolio is $1,000,000+ and it is ‘only’ a 1% management expense fee, that’s $10,000 to your financial advisor PER YEAR. I say this all the time, I’d rather spend $10,000 on a trip to the Maldives than on an annual ‘free’ luncheon hosted by a financial advisor.

TD ETFs

TD Exchange Traded Funds have around 48 ETFs, and there are three all-in-one TD ETFs.

Here are the three all-in-one ETFs and the year of inception was 2021 for them. Their management fee is 0.15% and the MER is 0.17%.

So basically it costs 0.17% to invest with TD ETFs.

• TBAL-TD Balanced ETF Portfolio
• TCON (weird name if you ask me, sounds like teleconference)- TD Conservative ETF Portfolio
• TGRO- TD Growth ETF Portfolio (focus on 10% fixed income and 90% equities)

Here is TGRO’s annual performance since inception (YTD as of November 2024). In comparison, $VTI (S&P500) return November 2024 YTD is 25%.

Unfortunately when I try to click on TGRO’s information, I get a 400 Bad Request page, so I am unable to see the composition of TGRO or get much more information about the TD ETF in general.

Now, let’s look at the cost of investing with TD ETFs.

In terms of buying and selling TD ETFs, it is FREE if you use the TD Easy Trade app. TD Easy Trade was launched in recent years seemingly as competition for Wealthsimple or other really easy to use digital brokerages.

For example, TD Easy Trade offers:

• Partial shares
• Free TD ETF trading (buying and selling is free, otherwise if you would pay commission even if you used TD Direct Investing)
• 50 Free Commission Free trades for US and Canadian stocks per year

This makes the cost to invest very cheap as you won’t be paying any commissions for trading the TD ETFs, and just have to pay for the MER and management fees, which are 0.15% and 0.17%.

iSHares ETFS

Now let’s look at the iShares One Ticket ETFs.

The management fee is 0.18% and the management expense ratio is 0.20%.

So basically the fees are 0.20% for iShares One Ticket ETFs.

• XCNS- iShares Core Conservative Balanced ETF Portfolio- YTD as of Nov 2024 returns are 11.34%
• XBAL- iShares Balanced ETF Portfolio- YTD returns are 15.43%
• XGRO- iShares Growth ETF Portfolio- YTD returns are 19.74%
• XEQT- iShares Core Equity ETF Portfolio- YTD returns are 20.13%

To buy and sell the iShare ETFs, normally it would cost whatever commission you would pay with for your brokerage.

Questrade allows you to BUY ETFs commission free (though there are some ECN fees which are around pennies) but charges the usually $4.95 or so commission when you sell.

Scotia iTrade has XCNS, XBAL, XEQT, and XGRO on their Commission Free ETFs list which would essentially make it free to buy and sell the iShare ETFs. They added these to the list in recent years. This makes the cost to invest much lower, and you would be able to do more frequent dollar cost average or purchases if you wanted to.

BMO Investorline includes XBAL, XCNS, XGRO, XEQT as part of their commission free ETF offering.

Wealthsimple Trade also does not charge fees for ETFs or even individual equities, so using this brokerage would be useful when you are dollar cost averaging and buying regularly whether the market is high or low or flat. Right now, they are even offering a free iPhone or a Macbook if you make the switch from another brokerage and transfer enough money over. Very tempting!

Vanguard ETFs

Finally, there are the Vanguard all in one ETFs. These are the granddaddy of the all in one ETFs. They are called Vanguard Asset Allocation ETFs.

They were made available around about 2019.

For all of these, the management fee is 0.22% and the MER is 0.24%. Essentially it costs 0.24% to invest using Vanguard ETFs provided there are no costs associated with buying and selling the ETFs.

• VCIP Vanguard Conservative Income Portfolio (20% equities, 80% fixed income) YTD return for November 2024 is 6.53%
• VCNS Vanguard Conservative ETF Portfolio (40% equities, 60% fixed income) YTD return for November 2024 is 10.84%
• VBAL Vanguard Balanced ETF Portfolio(60% equities, 40% fixed income) YTD return as of November 2024 is 15.21%
• VGRO Vanguard Growth ETF Portfolio (80% equities, 20% fixed income) YTD return as of November 2024 is 19.56%
• VEQT Vanguard All-Equity ETF Portfolio (100% equities) YTD return as of November 2024 is 24.20%

Questrade allows you to BUY ETFs commission free (though there are some ECN fees which are around pennies) but charges the usually $4.95 or so commission when you sell.

Wealthsimple Trade also does not charge fees for ETFs or even individual equities, so using this brokerage would be useful when you are dollar cost averaging and buying regularly for buying and selling, whether the market is high or low or flat.

BMO Investorline includes both the iShares One Ticket ETFs and the Vanguard Asset Allocation ETFs as part of the 95 ETFs that are commission free. For example, XEQT and VEQT are both included.

National Bank Direct Brokerage is similar to Wealthsimple Trade in that they don’t charge commissions for buying and selling stocks and ETFs.

Genymoney.ca’s Verdict

All of these are traded in CAD currency (Canadian currency) which is great since you don’t have to deal with currency conversion to invest in US investments.

As you can see the returns are pretty comparable between the three, give or take one percentage or so when you compare VGRO and XGRO and TGRO.

To decide between all equities, balanced, or growth you have to figure out your risk tolerance and your investment horizon. Generally, the younger you are the more equities you can take in your portfolio.

So which one is ‘the best’ all in one ETF for you? It depends on which brokerage you use and how much it costs for you to buy and sell your ETFs. You’ll be able to contribute more regularly and dollar cost average more frequently if your costs are lower.

In addition, as you can see the MER for the Vanguard Asset Allocation ETFs are a little higher compared to TD and iShares (higher by 0.04%), but Vanguard ETFs have the most assets under management ($6 billion for VGRO vs $2.7 billion for XGRO) and personally I would think it is safer because there’s less chance for the fund changing or closing down.

On a $100,000 portfolio the difference in MER of 0.04% is equivalent to about $40. This is still a stark contrast between a financial advisor fully managed account with an MER of 1%, which would be $1000 on the $100K. I don’t even want to think about that compounded over time!

So in summary, my preference would be Vanguard Asset Allocation ETFs or iShares All In One ETFs and then the TD ETFs would be the last of the three options.

Which one do you use and what is your preference?