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Vanguard Balanced ETF Portfolio (VBAL $36.82)
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iShares Core Balanced ETF Portfolio (XBAL $33.31)
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BMO Balanced ETF (ZBAL $14.84)
Q: Retried and have a diversified stock and bond portfolio that I live off. Not tending to the portfolio as much as much as I have in the past and wish to simply my life. I am thinking of selling most of my portfolio and buying "all in one ETFs". Would you advise selling all and buying only one of the above ETFs or " diversifying" by splitting into all three above or even more ETFs to avoid risk of illiquidity in the event of a need to a large amount of cash. Please elaborate on any other risks in a strategy, such as company reputational risk, in allocating a very large percentage of the portfolio to only one or three such ETFs.
5i Research Answer:
While we have no concerns on any of these products or fund companies, we would still prefer a split. We could live with 33% exposure but might prefer 25% even. ZBAL is the smallest but still very liquid. There is essentially no risk other than delays or reputation risk. ETF assets are held separately from the fund company. There can be some company problems, and regulators can halt redemptions (as they did with Emerge Funds) but the assets are not at risk. But.........in a halt there is still market risk. Considering the diversification of these ETFs we would not see that as a significant issue at all. They also invest in very liquid assets and bonds, and so there little risk of a 'run' on any particular asset class.