The new asset allocation ETFs launched by Vanguard and iShares in 2018 have made it easier than ever for investors to build a low-cost balanced portfolio. If you want a globally diversified mix of 80% stocks and 20% bonds, for example, the Vanguard Growth ETF Portfolio (VGRO) will deliver that with a single trade. Want a more traditional balance of 60% stocks and 40% bonds? The iShares Core Balanced ETF Portfolio (XBAL) will do all the heavy lifting.

Of course, one-fund portfolios won’t fit the needs of all investors. Say, for example, your financial plan calls for an asset allocation of 50% stocks and 50% fixed income. None of the Vanguard or iShares asset allocation ETFs has this mix, so you’ll need to look for a different solution.

Let’s consider some ways you can combine asset allocation ETFs and other products without completely sacrificing simplicity.

Customize your asset mix with a bond ETF

The first wave of asset allocation ETFs was made up of all-in-one portfolios of stocks and bonds. But these were followed by the Vanguard All-Equity ETF Portfolio (VEQT), which uses the same mix of Canadian, US, international and emerging markets stocks as in the all-in-one ETFs. It just strips out the bond component.

While this fund is ideal for a very aggressive investor who wants a 100% stock portfolio, VEQT can also be combined with a bond ETF to achieve any asset mix that isn’t available in a single-ETF solution. For example, if your target asset mix is 50/50, you can simply hold equal amounts of VEQT and any broad-market bond ETF. You can also combine 70% in VEQT and 30% in bond ETF if your target asset mix is half way between the balanced and growth versions of the asset allocation ETFs (which hold 60% and 80% stocks, respectively).

If you’re investing in a non-registered account, you can also use VEQT in conjunction with the BMO Discount Bond ETF (ZDB), which is likely to be more tax-efficient than the traditional bond funds held in the all-one-ETFs.

Of course, the trade-off here is that you will still need to rebalance your portfolio from time to time. One important feature of the single-ETF option is that they rebalance the stock and bond components automatically, and you’re giving that up. But I think we can all agree that rebalancing a two-fund portfolio isn’t going to kill too many brain cells.

Add a GIC ladder

For conservative investors in particular, another option is to combine the Vanguard All-Equity ETF Portfolio (VEQT) and a bond ETF with a ladder of GICs. For example, if your target asset allocation is 60% fixed income, you could hold 45% in GICs with the other 15% in a bond ETF. Then VEQT can make up the entire equity portion.

This has a few advantages. First, because GICs do not have management fees, they can further reduce the cost of the portfolio, especially when compared with an option such as VCNS, which is 60% bonds. Second, GICs have higher yields than government bonds of the same maturity. And finally, they are likely to be more tax-efficient than bond funds in a non-registered account.

Just be aware of the key drawbacks with GICs. They are not liquid, which means you cannot sell them before their maturity date, so you need to be comfortable locking up your money for one to five years. GICs are also less than ideal for investors who are regularly adding new money, since you can’t buy them in small amounts without creating an unwieldy portfolio.

Moreover, if there is a sharp downturn in equities and your only holdings are a single equity ETF and a GIC ladder, there is no opportunity to rebalance until the next GIC matures. That’s why you need to include a bond ETF (or high-interest savings account) as part of your fixed income allocation to add flexibility.

Don’t take it too far

One word of caution here: while the new Vanguard and iShares asset allocation ETFs can be combined with other products, there is a danger of going overboard. Remember, the goal of these ETFs is to make portfolios simpler, not more complicated. If these ETFs are just going to be a small part of a portfolio with a dozen or more moving parts, don’t bother with them at all.

If you want the easiest solution, then just choose one of the asset allocation ETFs and hold it in all of your accounts. And if you want a little bit of customization, you can use one of the strategies I’ve outlined above. But if you’re one to obsess over your precise allocation to emerging market equities, or if your goal is to save every basis point in taxes, then a customized portfolio of individual ETFs is more appropriate, though it always comes at the cost of more complexity.