Build a simple ETF portfolio

If you’re just getting started, your portfolio doesn’t need to be complicated. 

You can choose:

• One ETF that includes a mix of stocks and bonds, or 
• A small group of ETFs (for example, a few for stocks and one for bonds)

That’s enough to get started.

One of the first decisions in building a portfolio is how much to invest in stocks versus bonds. 

• Stocks are typically used for long-term growth, but their prices can fluctuate.
• Bonds are often used to reduce risk and provide more stability.

How you divide your portfolio depends on your goals, your timeline, and how comfortable you are with market ups and downs.

A common starting point is a mix of 60% stocks and 40% bonds. From there, you can adjust: 

• More stocks → higher growth potential, more volatility
• More bonds → more stability, lower volatility

There’s no perfect mix — the goal is to find one that fits your situation.

Once you’ve decided on your mix, there are two main ways to put it together using ETFs.

Option 1: One ETF (simplest)

Choose a single ETF that includes a mix of stocks and bonds (often called an asset allocation ETF).

• Automatically diversified
• Automatically rebalanced
• Minimal effort

This can be a good fit if you prefer a hands-off approach.

Option 2: A small group of ETFs (more control)

Choose individual ETFs — for example, a few for stocks and one for bonds — and divide your money based on your target mix. 

• More flexibility
• More control
• Requires occasional rebalancing

This approach can work well if you want to be a bit more involved.

You don’t need to compare hundreds of ETFs to get started.

A simple approach is to focus on broad, low-cost ETFs that track large parts of the market.

For example, you might use ETFs that cover:

• Canadian stocks
• U.S. stocks
• International stocks
• Canadian bonds

These provide diversification without needing to pick individual stocks or bonds.

Over time, your portfolio mix will shift as some investments perform better than others.

For example, a 60/40 portfolio can become 70/30 if stocks rise faster than bonds.

Rebalancing simply means bringing your portfolio back to your target mix. In other words, selling some assets that have grown and buying others to restore your original mix.

• With an all-in-one ETF, this happens automatically.
• With a mix of ETFs, you may need to rebalance yourself from time to time, such as once a year.

Index ETFs are generally low cost, and those costs are reflected in the fund’s returns, rather than charged separately. 

Keeping costs low can help your long-term returns.

You don’t need to build a perfect portfolio right away.

A simple mix of ETFs can give you broad exposure to the market and a solid starting point.

From there, you can adjust over time as your goals and experience evolve.

Ready to take the next step?

Once you’ve chosen your ETFs and decided how to build your portfolio, you might be wondering how to actually buy and sell them.

Learn more in our next article: How to trade ETFs, where we walk through the trading process, order types, and what to watch for.

Want a closer look at how ETFs are built? Read Diversified investing with low-cost ETFs.