Since their appearance in early 2018, asset allocation ETFs have become the easiest way to build a balanced index portfolio at very low cost. They are “one-fund solutions” that hold several underlying stock and bond ETFs, allowing you to invest in a globally diversified portfolio with a single trade.
These convenient products are less flexible and slightly more expensive than a portfolio built from individual ETFs for each asset class. However, they are much easier to manage, since all the rebalancing is done for you.
Vanguard and iShares offer four balanced ETF portfolios, with options for 20%, 40%, 60% or 80% equities. Most investors will find one of these options suitable for their situation.
For those who want something in between, both firms also offer an all-equity ETF that can be combined with a traditional bond ETF in any proportion you want. The model portfolios include two-fund options for 30%, 50% and 70% equities.
The Vanguard and iShares asset allocation ETFs are both excellent choices, and their differences are relatively minor. You won’t go wrong with either option.