One-stop shopping is attractive in many areas of life, and investing is no exception. As investors look for faster, simpler and more affordable ways to build portfolios, asset managers have introduced bundled products that handle selection, diversification and ongoing maintenance. All-in-one exchange-traded funds (ETFs) are a clear example: single funds that provide a diversified, ready-to-use asset allocation in one trade.
ETFs are already popular for their tax efficiency, tradability and typically lower costs compared with many mutual funds. All-in-one ETFs take that convenience a step further by packaging a mix of underlying funds—often a blend of equity and fixed-income ETFs—into a single fund with a stated risk profile. Depending on the product, managers may use passive index ETFs, active ETFs, or a combination, and they will generally oversee rebalancing to keep the portfolio aligned with its target allocation.
These funds appeal to DIY investors as well as those who prefer a hands-off approach. Because all-in-one ETFs combine diversification, professional management and automatic rebalancing, they remove the need for investors to pick individual funds, manually rebalance or monitor many holdings. They can suit a range of goals: conservative capital preservation, balanced growth or a higher-equity, growth-oriented approach.
How all-in-one ETFs work
All-in-one ETFs are typically built from a set of globally diversified underlying ETFs and structured to achieve a target allocation that matches the fund’s risk profile. That allocation defines the fund’s exposure to equities, bonds and, in some cases, alternative assets such as cryptocurrencies.
Fidelity’s All-in-One ETF lineup illustrates how providers position these products by risk and allocation. As of Oct. 31, 2023, Fidelity’s All-in-One Balanced ETF (FBAL) held approximately 59% global equity, 39% global fixed income and 2% exposure to cryptocurrencies, reflecting a low-to-medium risk profile. Its effective indirect management fee was approximately 0.36%.
The All-in-One Growth ETF (FGRO) aims for a higher equity weight—roughly 82% global equity, 15% global fixed income and 3% cryptocurrencies (as at Oct. 31, 2023)—making it more suitable for investors with higher risk tolerance and a longer time horizon. Its approximate indirect management fee was about 0.38%.
Two additional funds broaden the choice: the All-in-One Conservative ETF (FCNS), with about 40% global equity, 59% global fixed income and 1% cryptocurrencies, targets lower volatility and a low-to-medium risk profile; and the All-in-One Equity ETF (FEQT), with a roughly 97% global equity weighting and 3% cryptocurrencies, is designed for investors seeking primarily equity exposure. Both funds were added to Fidelity’s lineup in 2022, and reported allocations are based on the stated neutral mixes as of Oct. 31, 2023.
| Fidelity All-in-One ETFs | Conservative | Balanced | Growth | Equity |
|---|---|---|---|---|
| Risk classification | Low to medium | Low to medium | Medium | Medium |
| Ticker | FCNS | FBAL | FGRO | FEQT |
| Global equity | 40% | 59% | 82% | 97% |
| Global fixed income | 59% | 39% | 15% | 0% |
| Cryptocurrencies | 1% | 2% | 3% | 3% |
Practical considerations when choosing an all-in-one ETF
All-in-one ETFs are convenient, but they are not identical. When evaluating options, consider these points:
- Allocation and risk: Match the fund’s target allocation and risk level to your investment horizon and tolerance for volatility.
- Fees: All-in-one ETFs may not charge a direct management fee, but they typically hold underlying funds that do. Review effective indirect fees and the management expense ratio (MER).
- Rebalancing: Understand how and when the fund rebalances. Some managers rebalance on a calendar schedule; others rebalance when allocations deviate beyond a threshold.
- Underlying exposure: Check what underlying ETFs or assets the fund uses—equity regions, bond types and any alternative assets such as cryptocurrency exposure.
- Tax and account suitability: Consider which account type (registered or non-registered) is best for the fund based on your tax situation.
Read more on investing:
- Building a “core and explore” portfolio with an all-in-one ETF
- Five ways to worry less about your investments with an all-in-one ETF
- Using ETFs to get the most out of your TFSA contribution room
- Taking an active approach to ETF investing in Canada
This article is sponsored.
This is a paid post that is informative and highlights a client’s product or service. These sponsored articles are written and edited by MoneySense with contributions from assigned freelancers and are approved by the client.
Commissions, trailing commissions, management fees, brokerage fees and expenses may apply to investments in ETFs. Please read the ETF prospectus for detailed information before investing. Historical rates of return are presented as compound annual returns for the indicated periods and include changes in unit value and reinvested distributions; they do not account for sales, redemption, distribution or option charges, or personal income taxes, which would reduce returns. ETFs are not guaranteed and their values fluctuate. Past performance is not indicative of future results.
Fidelity All-in-One ETFs do not charge a direct management fee; however, they invest in underlying Fidelity ETFs that do charge management and/or administration fees. Based on current weightings, the expected effective indirect management and/or administration fees are approximately: Conservative (FCNS) 0.35%, Balanced (FBAL) 0.36%, Growth (FGRO) 0.38%, and Equity (FEQT) 0.39%. Actual indirect fees may differ due to rebalancing, changes in underlying fund performance or strategic allocation adjustments; these are reflected in the management expense ratio, which is published periodically.
Each Fidelity All-in-One ETF has a neutral allocation that includes a small position in the Fidelity Advantage Bitcoin ETF™, generally between 1% and 3%. Portfolios are rebalanced if allocations deviate materially from their targets. Information is provided for informational purposes only, is believed to be reliable but is not guaranteed, and does not constitute investment, tax or legal advice. Investors should evaluate any investment according to their own objectives and risk tolerance.
Portions © 2024 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC.