Our investment adviser at a large bank has proposed investing cash from our recent home sale in two different ETFs: The iShares Core Balanced ETF Portfolio (XBAL) and the TD Global Tactical Monthly Income F Series (TDB2605). We’d like to get your view on their suitability.
The suitability of any investment is fiendishly difficult to determine without a clear understanding of your financial situation, goals and risk profile. I can only comment on the products themselves.
First, it’s important to know that these are two different creatures and shouldn’t be lumped together under the term exchange-traded fund (ETF). The iShares product is indeed an ETF that can be bought and sold through any self-directed brokerage account, but the TD one is a Series-F mutual fund.
As I discussed last week, you can only buy Series-F funds if you pay for an advisory account, such as the one you have with your bank. That means published expense information doesn’t capture a fund’s full cost. The combination of fees can add up to a significant drag on returns over time.
Both products give you a mix of around 60 per cent equities and 40 per cent fixed income, but they are not equivalent. The mutual fund concentrates on riskier, lower-quality, high-yield debt. That’s in keeping with its stated aim of generating cash flows from income‑producing securities, but you may find these bonds provide less ballast in times of market stress.
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XBAL gives you more exposure to Canadian assets, currently around 45 per cent of the fund’s market value, while the F-series fund has a bit more than a third in U.S. stocks. XBAL has a management expense ratio (MER) – which includes its management fee, operating expenses and taxes – of 0.19 per cent against the TD fund’s 0.94 per cent (as of December, 2025).
I can understand why your adviser suggested the pairing: XBAL is a solid, inexpensive ETF for longer-term growth with a sizable fixed-income allocation for stability, and the mutual fund provides income. Chris Merrick, principal and fee-only financial planner at Merrick Financial Inc. in Toronto, said that income-generating investments can be useful for retirees who don’t mind sacrificing some returns for the security of monthly income.
But I tend to think that a Series-F fund may be better for your bank and adviser than for you.
If you want interest income from bonds and lower fees, the iShares Core MSCI Global Quality Dividend Index ETF (XDG) tracks one of the TD fund’s benchmarks. You might also consider dividend income through a product like the Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY) or the iShares S&P/TSX Composite High Dividend Index ETF (XEI). All of these funds have a MER of 0.22 per cent.
Awkwardly for your adviser, you can also buy them without paying for an advisory account.
Are the distributions of BMO’s Equal Weight REITs Index ETF (ZRE) eligible for the dividend tax credit?
For the most part, no. As an ETF investing in real estate investment trusts, ZRE’s distributions reflect the distributions of its components as a mix of investment income.
According to BMO, ZRE paid no eligible dividends last year and they made up only about 5 per cent of distributions in 2024, the highest proportion since 2011. I don’t have anything against REITs, but if you’re searching for eligible dividends, one of the ETFs mentioned above will be a better fit.
You might also consider another iShares product, the Core MSCI Canadian Quality Dividend Index ETF (XDIV), which stands out with a MER of just 0.11 per cent. Its assets are more concentrated than XEI, however, which may expose your portfolio more to individual company risks.
I switched brokerages in 2024 and the Canada Revenue Agency (CRA) only allowed me to upload T5008 slips from TurboTax from the new one. Both brokerages insisted they sent the information to the CRA, but the CRA said they didn’t. I had to manually fill out each slip. What happened?
The good news is it probably wasn’t your fault. The bad news (or more good news, if you’re a sociable type): You’re definitely not alone.
Internet forums are rife with complaints every year about missing or incorrect T-slips. The last tax season appears to have been a particularly bad one, with problems linked to a CRA systems update.
The CRA remains clear on its position:
“You must ensure all proper fields on the return are filled in correctly, including information not delivered by Auto-fill My Return, and the information provided is true, accurate and complete. It remains the taxpayer’s responsibility to report accurately their income before a tax return is submitted to the CRA.”
Your brokerage or the CRA may be the reason for your missing T-slip, but it’s your responsibility to fix it. You did the right thing.
E-mail your questions to agalbraith@globeandmail.com. I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.