ETF comparisons

Less than most comparison articles imply, and less than it did before Vanguard's 2025 fee cut narrowed the gap. A few basis points on a $100,000 portfolio is a few tens of dollars a year, which is real but small next to the difference account placement or a currency conversion can make. Fee differences deserve attention when they are large or when the portfolio is large; between two nearly identical all-equity funds they are usually the least interesting variable.

Home bias is holding more of your own country than its share of global markets, which is roughly 3% for Canada. The popular all-in-one funds deliberately overweight it, generally to 25% or 30%, on the reasoning that Canadians spend in Canadian dollars, receive a favourable dividend tax credit on Canadian equity, and behave better in a downturn holding something familiar. The counterargument is concentration: the Canadian market is heavily weighted to financials and energy. There is no settled right answer, which is exactly why these funds differ.

For tax, only in a non-registered account. A fund distributing once a year rather than quarterly gives you fewer reinvestment events to track for adjusted cost base purposes, which is a genuine convenience if you track ACB by hand, and inside a TFSA or RRSP there is nothing to report so that difference disappears. Timing still decides when cash actually lands in the account and how often it needs putting back to work, which matters if you are not on a DRIP or you are drawing the distributions as income.

A broad-market fund of the usual kind weights companies by size, so it owns the market roughly as the market prices it. A factor-tilted fund deliberately overweights characteristics that academic research has associated with higher long-run returns, typically smaller companies and cheaper valuations. Both are normally index funds: a factor ETF usually tracks an index too, just one built on those characteristics rather than size alone, so the real contrast is cap-weighted against tilted rather than indexed against not. The tilt is an active bet that those premia persist and that you will hold through the stretches when they do not, which have historically lasted a decade or more. It costs more than a plain cap-weighted fund, and the higher expected return is a hypothesis rather than a guarantee.

You can, but it usually defeats the purpose. All-in-one funds are complete portfolios, so holding two means the combined asset mix is whatever the blend happens to produce rather than something you chose, and you rebalance neither. If you want a different allocation than any single fund offers, holding one all-in-one plus a deliberate satellite position is easier to reason about than splitting between two overlapping funds.

Inside a TFSA or RRSP the switch triggers no tax, which is what usually makes it low-stakes. It is not automatically free: you pay the bid-ask spread either way, and a commission on top if your broker charges one, which several Canadian brokerages still do. In a non-registered account it depends on what the position is worth against what you paid. If it is sitting on an accrued gain, selling to switch realizes that gain and brings a tax bill forward for a difference of a few basis points a year, which rarely pays. If it is at or below your adjusted cost base there is no gain to trigger, and the switch is close to free, though a loss may be denied under the superficial loss rule if you buy something identical back within 30 days. Estimate the tax with our capital gains calculator before switching, and consider simply directing new contributions to the fund you now prefer.