RBC InvestEase and Wealthsimple are two of the most popular roboadvisors in Canada.
Both Wealthsimple and RBC InvestEase offer simple, automated investing experience at an extremely low cost. Investors pay a management fee of only 0.50% for their portfolio, and their money is completely taken care of.
Both roboadvisors will allocate your cash into a collection of ETFs (exchange-traded funds) representing the stock and bond markets, rebalance your portfolio as needed, reinvest any dividends earned, and take care of tax-loss harvesting. But the ETFs they choose are really different!
RBC InvestEase vs Wealthsimple
Here’s a breakdown of how Wealthsimple vs RBC InvestEase compare:
|Accounts Available||TFSA, RRSP, unregistered||TFSA, RRSP, RESP, LIRA, unregistered|
|Minimum to Open an Account||$0||$0|
|Management Fee accounts <$100,000||0.50%||0.50%|
|Management Fee accounts $100,000+||0.50%||0.40%|
|Average Portfolio MER||0.13%||0.10% to 0.16%|
|SIGN UP||SIGN UP|
The RBC InvestEase Portfolios
RBC InvestEase is a newcomer to the Canadian roboadvisor space, but they entered with a bang. RBC partnered with iShares by Blackrock to build their portfolios, creating the largest and most comprehensive ETF offering in Canada. With over 150 ETFs and $60 billion dollars under management, the RBC iShares partnership is massive and provides everything an investor could ask for.
RBC InvestEase offers 5 different investment portfolios, based on your risk tolerance. The 5 different RBC InvestEase Portfolios are:
- The Very Conservative RBC InvestEase Portfolio
- The Conservative RBC InvestEase Portfolio
- The Balanced RBC InvestEase Portfolio
- The Growth RBC InvestEase Portfolio
- The Aggressive Growth RBC InvestEase Portfolio
The Wealthsimple Portfolios
Wealthsimple has a slightly better offering for those with large portfolios. If you’re investing more than $100,000, they drop your portfolio management fee from 0.50% to 0.40%. They also provide additional services and perks as part of this “Wealthsimple Black” status, including financial coaching.
Wealthsimple also stands out above RBC InvestEase for a more comprehensive account offering. You can open a TFSA, RRSP, RESP, LIRA, or unregistered account with Wealthsimple. RBC InvestEase only offers TFSA, RRSP, and unregistered accounts.
You can read more in our full Wealthsimple Review here.
Wealthsimple offers 3 primary portfolios with slightly different risk levels within them. They are:
- Wealthsimple Conservative Portfolio
- Wealthsimple Balanced Portfolio
- Wealthsimple Growth Portfolio
Within each portfolio you can choose a more specific risk level, too. Wealthsimple ranks your risk level on a 1 to 10 scale, with risk levels 7+ only available in the growth portfolio.
Wealthsimple vs RBC InvestEase Portfolio Comparison
Here is exactly how the ETF holdings and allocations between RBC InvestEase and Wealthsimple compare:
Wealthsimple vs RBC InvestEase Conservative Portfolio
Wealthsimple vs RBC InvestEase Balanced Portfolio
Wealthsimple vs RBC InvestEase Growth Portfolio
Similarities between RBC InvestEase and Wealthsimple
Aside from both being roboadvisors that offer investors a completely automated investing experience, Wealthsimple and RBC InvestEase are very different.
Both RBC InvestEase and Wealthsimple allocate their portfolios by risk the same way
There are slight difference, but whether you’re choosing Wealthsimple or RBC InvestEase, your portfolio breakdown by risk is approximately the same for both and looks like this:
- Conservative: 35% equities, 65% fixed income
- Balanced: 50% equities, 50% fixed income
- Growth: 70% to 80% equities, 30% to 20% fixed income
Both roboadvisors use approximately the same number of ETFs
RBC InvestEase uses 7 different ETFs to build their portfolios, where as Wealthsimple uses 9. They use approximately the same for Fixed Income and Equity allocations as well. They even use the exact same ETF for one allocation!
Differences between RBC InvestEase and Wealthsimple
Despite their similarities, there are lots of differences in how the Wealthsimple and RBC InvestEase portfolios are constructed. In fact, when you look closely, they’re taking completely different approaches to investing!
Wealthsimple invests in both US and Canadian ETFs from different providers
One of the first things you’ll notice when reviewing the RBC InvestEase and Wealthsimple portfolios is Wealthsimple invests in ETFs listed on both the Toronto Stock Exchange and US stock exchanges. This means some of Wealthsimple’s ETFs are actually in USD. RBC InvestEase only invests in Canadian ETFs.
Furthermore, Wealthsimple invests in ETFs from multiple providers including iShares, Vanguard, BMO, and SPDR. RBC InvestEase has a direct partnership with iShares by Blackrock, so only uses iShares ETFs in their portfolios.
RBC InvestEase invests more in the Canadian stock market
Both Wealthsimple and RBC InvestEase actually choose the same ETF for their Canadian stock market allocation: XIC.TO, the iShares Core S&P/TSX Capped Composite Index ETF. However, RBC InvestEase maintains about 15% to 25% invested in the Canadian stock market whereas Wealthsimple allocates a shockingly low 2.5% to 10%.
RBC InvestEase invests more directly in the US stock market
RBC InvestEase allocates 10% to 24% of your portfolio directly into a US stock market ETF. Wealthsimple only invests 5% in a US stock market ETF in their most aggressive portfolio. However, the US stock market is the largest in the world and therefore included in total stock market funds that Wealthsimple favors. You are still getting good exposure to the US stock market with Wealthsimple, but RBC is definitely making more of an effort.
Wealthsimple invests more in emerging markets
Wealthsimple takes an incredible aggressive position in emerging markets in all of their portfolios compared to RBC InvestEase. Wealthsimple puts 10% to 15% of your money in emerging markets ETFs, compared to RBC InvestEase 0% to 7.5%. From a risk profile, emerging markets is considered a higher risk investment, which is why RBC leaves it out of their conservative portfolio.
Wealthsimple invests in gold, RBC InvestEase does not
Wealthsimple maintains a small position of 2.5% to 3.8% of your portfolio in a gold ETF, GLDM. RBC InvestEase does not invest in any dedicated precious metal ETFs.
Should I Invest RBC or Wealthsimple?
I wish I had an easy answer for this, but it’s up to you whether you should invest with RBC or Wealthsimple. Both roboadvisors have pros and cons, and because their portfolios are so different, will perform better at different times.
Historically Wealthsimple has been a stellar performer as a roboadvisor because of their broad exposure to the US stock market. This year, the US stock market is flat and the Canadian stock market is doing great. As a result, RBC InvestEase will likely outperform Wealthsimple in 2021. But in future years, the reverse will likely be true!
The best thing you can do for your money is pick a roboadvisor, invest it, and leave it alone. Don’t go switching platforms trying to chase changing returns. You’ll end up losing money by always selling securities and transferring funds. Besides, the whole point of using an automated service like a roboadvisor is not to do any active investing!
Want more control over your portfolio? Build your own.
If you’re looking at both Wealthsimple and RBC InvestEase and findings flaws with both, you may be ready to take matters into your own hands. The only way to invest in the allocation and ETFs you want is by buying them yourself.
In order to build your own portfolio, you need to sign up for a discount brokerage like Questrade. It’s free to buy ETFs on Questrade, which means you can start building the portfolio of your dreams with no commissions! Check out our Questrade Review to learn more.
Not sure how to choose ETFs and create the perfect asset allocation for your risk tolerance and financial goals? The Six-Figure Stock Portfolio is an investing eCourse that will teach you everything you need to know. Even if you’re starting from the very beginning of “what is a stock?” to “how do I make a trade”, this eCourse covers absolutely everything you need to know.
The best investing portfolio for you is the one that meets your financial goals.