Tangerine Bank recently introduced a new way to invest: the Tangerine Global ETF Portfolios.
These are three different investment funds that invest in ETFs (Exchange Traded Funds), allowing you to easily diversify your investments across a number of different stocks and bonds. ETFs are a popular investment vehicle for new and seasoned investors alike, and for good reason! ETFs reduce investment risk while will still allowing you to maximize returns.
What are the Tangerine Global ETF Portfolios?
The Tangerine Global ETFs portfolios are a new investment product recently launched by Tangerine Bank. They provide a low-cost way for investors to access the stock market.
Tangerine offers three ETF portfolios with different stock and bond allocations to match your risk tolerance:
|Balanced ETF Portfolio||60%||40%|
|Balanced Growth ETF Portfolio||75%||25%|
|Equity Growth ETF Portfolio||100%||0%|
What might surprise you is these ETF Portfolios are actually mutual funds. If you dig into the prospectus on the Tangerine website, you’ll see the Tangerine Global ETF Portfolios are simply a mutual fund that invests in ETFs:
Tangerine has been offering mutual funds since they established themselves as a bank in Canada, so this is really no surprise. However, it is unusual that they’re branding a mutual fund as an “ETF portfolio”. While not technically incorrect (it is a mutual fund investing in ETFs, after all) it might be confusing to investors who won’t go digging through the fine print of the prospectus.
Tangerine Global ETF Portfolio holdings
I spent quit a bit of time looking for information on the holdings within the Tangerine Global ETF portfolios and came up empty-handed. I’m curious what ETFs they are investing in, and how the selection differs from competitors. Unfortunately, this information was not easy to locate on the Tangerine website when they first launched.
When we asked Tangerine where to find them, they told us they weren’t available yet.
This is significantly less transparent than competitors like Wealthsimple, who clearly list the holdings over every fund directly on their website.
Thankfully, a few weeks later the portfolio breakdowns were made available here.
|Tangerine Global ETF Portfolio Holding||Management Fee||MER|
|Scotia Canadian Bond Index Tracker ETF||0.05%||Not Available|
|Scotia U.S. Equity Index Tracker ETF||0.05%||Not Available|
|Scotia International Equity Index Tracker ETF||0.15%||Not Available|
|iShares Core MSCI Emerging Markets IMI Index ETF||0.25%||0.27%|
|Scotia Canadian Large Cap Equity Index Tracker ETF||0.03%||Not Available|
It’s no surprise the new Tangerine funds contain mostly Scotiabank ETFs, as Scotiabank is the parent company that owns Tangerine. At this time, these Scotia ETFs do not have listed MER fees because they are new and costs are still being determined.
Tangerine Global ETF portfolio Fees
All three of the Tangerine Global ETF portfolios charge management and admin fees of 0.65% of the portfolio’s value. This is made up of the annual management fee of 0.50% and a fixed administration fee of 0.15%.
This 0.65% fee is higher than competitors like Wealthsimple and RBC Investease, but still competitive to alternative mutual funds, and even the previous Tangerine funds that charged just over 1%. You can see how the Tangerine Global ETF portfolios stack up against competitors below, and check out our post The Best Robo-Advisors in Canada.
|Minimum to open an account||$0||$0||$0|
|SIGN UP||SIGN UP||SIGN UP|
There are no other fees for the Tangerine Global ETF portfolios, unless you’re moving money elsewhere. The transfer fee for the Tangerine Global ETF portfolios is $125.
Who is Tangerine Bank?
Tangerine Bank is one of the best no-fee, online banking options for Canadians. They’ve been offering excellent low cost financial products and high savings interest rates for more than a decade.
Tangerine Bank was originally operating as ING Direct Canada, but was acquired by Scotiabank in 2012. The name was changed to Tangerine in 2014. While the institution still remains competitive in Canadian banking, clients have seen fees increase and saving interest rates drop since the Scotiabank acquisition.
While Tangerine is still a great choice for no-fee chequing or a cash-back credit card, if you’re looking for a high-interest savings account, Tangerine is no longer a strong contender. Check out the Best High-Interest Savings Accounts in Canada for our list.
What’s an ETF (Exchange Traded Fund)?
The easiest way to understand an ETF is to picture it as a basket containing a bunch of different stocks. When you buy shares of an ETF, what you’re really buying is a little piece of every single company within the fund. This makes ETFs an easy and low-cost way to diversify your investment portfolio.
For more information, check out How to Invest with ETFs.
The Tangerine Global ETF portfolios are a solid investment product, and a step up from the Tangerine Funds. However, they are still not as good as investing with a robo-advisor like Wealthsimple, or managing your own ETF portfolio with a brokerage like Questrade.
Tangerine still offers the best no-fee, cash-back credit card and a great no-fee chequing account. However, for investing options you might want to look elsewhere!
Thanks for the article! Tangerine’s ETF portfolio holdings are clearly explained on their site since the inception and mostly contain new Scotiabank ETFs:
Because the ETF themselve have MER, that should be added on the top of the portfolios’ 0.65%. And Scotiabank ETF are not the cheapest. Besides, they have no performance history, so it’s hard to compare them to Vanguard, BMO or iRock.
Thanks for this!! This breakdown was definitely not there when I wrote the article (I looked high and low for it, and even tweeted at Tangerine to direct me to it), but I’m glad to see it’s there. I will update the post accordingly!
I’m also not a big fan of Scotia ETFs. I find BMO and Vanguard, plus a few iShares offerings, really have the best to offer Canadians.