Recommended Funds

When choosing the building blocks for your Couch Potato portfolio, try to focus on the big picture. Your fund choices are important, but it is more important to focus your energy on getting your asset mix right, being broadly diversified, having a commitment to regular saving and disciplined rebalancing.

If you feel overwhelmed by the choices available, consider starting with one of my model portfolios. If you would like to customize your portfolio, consider the funds below. The list is not comprehensive: experienced investors may make different choices, especially if they want to follow non-traditional strategies or have specific tax considerations.

Exchange-Traded Funds (ETFs)

ETFs are the most popular investment vehicles for index investors, thanks to their low cost, transparency and variety. The following lists include good choices for broadly diversified, plain-vanilla funds in each asset class.

In most cases you should stick to using Canadian ETFs listed on the TSX. However, using ETFs that trade on US exchanges may be appropriate in RRSPs. Funds marked with a dagger (†) are the US-listed equivalent of the recommend Canadian ETF.

Once you have determined your target asset allocation, start by choosing a single Canadian bond ETF. Broad-market bond funds offer higher expected returns but more volatility. Short-term bonds have lower yields but their price movements tend to be less dramatic.  For more, see How Changing Interest Rates Affect Fixed Income.

Canadian bond ETF
Ticker MER
BMO Aggregate Bond ZAG 0.10
Vanguard Canadian Aggregate Bond VAB 0.13
iShares High Quality Canadian Bond XQB 0.13
Vanguard Canadian Short-Term Bond VSB 0.11

ETFs covering the broad Canadian equity market hold about 240 large, mid-size and small company stocks. The major ETF providers have similar offerings, all with very low fees:

Canadian equity ETF Ticker MER
Vanguard FTSE Canada All Cap VCN 0.06
iShares Core S&P/TSX Capped Composite XIC 0.06
BMO S&P/TSX Capped Composite ZCN 0.06

A total-market US equity fund includes well over 3,500 stocks in the largest and most diversified economy in the world:

US equity ETF Ticker MER 
Vanguard U.S. Total Market VUN 0.15
iShares Core S&P U.S. Total Market XUU 0.10
Vanguard Total Stock Market VTI 0.05

An ETF of international equities includes stocks from developed countries in Europe (including the UK, France, Germany, Switzerland) as well as Japan and Australia:

International equity Ticker MER
iShares Core MSCI EAFE IMI XEF 0.22
iShares Core MSCI EAFE IEFA 0.08

Round out your portfolio with an emerging markets ETF, which includes countries such as China, South Korea and Taiwan:

Emerging markets equity Ticker MER
iShares Core MSCI Emerging Markets IMI XEC 0.28
iShares Core MSCI Emerging Markets IEMG 0.14

To keep your portfolio simple without sacrificing diversification, consider using a global equity ETF that includes the United States, international equity and emerging markets in a single fund:

Global equity Ticker MER
iShares Core MSCI All Country World ex Canada XAW 0.22
Vanguard FTSE Global All-Cap ex Canada VXC 0.27


Index Funds

While ETFs get far more attention, index mutual funds are still an excellent choice for Couch Potato investors, especially those who want to keep things simple, those who contribute small amounts every month, and those with smaller accounts.

TD e-Series Funds

TD’s e-Series index funds are the best choice for most Couch Potato investors who choose not to use ETFs. However, they are only available to investors who open an online account with TD Canada Trust, or (preferably) through a TD Direct Investing discount brokerage account.

Fund name Fund ID MER
TD Canadian Bond Index – e TDB909 0.50
TD Canadian Index – e TDB900 0.33
TD US Index – e TDB902 0.35
TD International Index – e TDB911 0.50

Tangerine Investment Funds

The Tangerine Investment Funds are only available directly from Tangerine. Although the fees are relatively high for index funds, there are no account minimums, and investors do not need to work with a discount brokerage, pay annual account fees, or rebalance their portfolios. That makes these funds an excellent choice for novice investors with small portfolios.

The funds are listed below in order from most conservative to most aggressive. For more, see our white paper, The One Fund Solution.

Fund name Fund ID MER
Tangerine Balanced Income Portfolio INI210 1.07
Tangerine Balanced Portfolio INI220 1.07
Tangerine Balanced Growth Portfolio INI230 1.07
Tangerine Equity Growth Portfolio INI240 1.07