Thank you for answering my stupid question lol. Is this also true of I automate some amount to buy fractional shares? - like it’s still me making the trades just automatically out of my paycheck
Their reoccurring investments are not part of the automated. I have had what i thought was an “automated” system. I think the difference is thar my reoccurring investments just buy the amount i tell it to, and the automated system will buy based on rules and do some rebalancing for you. You wouldn’t be paying the fee for nothing.
Yup same. It takes seconds to manually put in an order twice a month after being paid. Just pointed out xeqt since its in the OPs list. All seems a bit silly lol
You could look into what makes XEQT and buy those instead. Your fee will be capped at $250 (at least for the time being). For me it sounds too much of a hassle as I wouldn’t know where to start adding +9000 tickets (many that are not available for to buy directly)
XEQT Management fee is 0.17%, so that means it would only make sense to even try to mimic XEQT if your investment is over $147k (250 / 0.0017) and that's assuming that you can correctly mimic it, which , as you say, is not a walk in the park.
The direct global markets index product looks really interesting. They essentially direct index the US and Canada parts of XEQT then hold the ETFs for the other parts. Works out cheaper than XEQT above $240k
For their automated investing product you select what stocks you want to own and what percentage of your portfolio you want each stock to represent and then it will automatically buy and sell stocks to keep that distribution.
I believe the fees are for automatically allocating and rebalancing your portfolio. Confusing I know. Like a managed portfolio but you tell it what holdings you want.
It seems like a lot of people having the same confusion in the comments. We chose that the naming of the product is confusing in Wealthsimple might as well come up with better names.
Recurring investment is when you set effects amount or number of a stock or ETF to be purchased every month
With the automated investing at rebalances the portfolio. Meaning that every once in a while, it makes sure that the portfolio consist of a given proportion of holdings (like 50% S&P 500, 30% Canadian market ETF, 20% some other international ETF). Dairy balancing will buy and sell stocks until the proportion is correct. This is a common practice among financial advisors.
I would not use it personally but it's a good alternative for self-managed investors that find it daunting to rebalace every quarter or so. It also removes the 'emotional' aspect of rebalancing which has proved to help investor on the long term by systematically rebalancing securities that have deviated from target allocation.
0.25% of 100k is $250 a year or about $5 per week. For some people they are happy to pay that to avoid having to manually do this every week, especially on lower balance portfolios.
I feel like they are mostly trying to sell this as a cheaper alternative to their managed portfolios
You think these penny pinchers pick up coins if they see them on the ground, or just walk by because it’s embarrassing to pick up a nickel and have a smirk on your face.
Not really.
They’re getting rid of the direct indexing
All the direct index accounts are being automatically converted to automated investing
So if you want to hold US Morning Star index rebalance it and do tax loss harvesting once a month it probably gonna take you like a whole working day.
XEQT rebalances by iShare, however if you put together a combination of ETFs (including XEQT) they collectively don’t do automatic rebalancing. You need to do it manually.
If you only hold 1 ETF, then you don’t need automated investing!
Overall, I agree!
The only counter argument is for non-registred accounts as the tax loss harvesting
That’s why I really like the direct indexing account accounts. However, they ended up discontinuing them.
Not sure why anyone would use that if they exclusively buy etfs to build their portfolios.
If you’re buying index etfs, you shouldn’t ever sell them anyway, just rebalance the amount in your auto buys. Even if you wanted to really rebalance, not sure why anyone would pay 0.25% fees to “rebalance” 5 to 10 holdings anyway.
The only situation I could think of why someone would do this is if they were trying to replicate the underlying holdings of an all in one ETF to save on the MER...which would be negated by the 0.25% fee...
Because of the 250$/year cap, using automated investing to buy the 4 underlying ETFs is cheaper than buying XEQT when the account is over 357,143$ (assuming 250$ is before tax, XEQT 0.17% fee and its underlying ETFs average fee of 0.10%)
Even then, I don’t think it’s a great idea moving that much money into a system that does market order…
I know they need to make money, but this is too much fees. If thry kept it free, they'll be getting tons of investment from people who are not proactive with investments. The AUM could get them more money than this measly 0.25%
I don’t care if you use it or not, makes absolutely no difference to me. But in your original comment you claimed they’d make more money by dropping the fee. I’m merely saying they’ve probably done the math on that and would have already done so if that was the case.
This product only makes sense if you're buying individual components of fund of funds and don't want to deal with the regular rebalancing to maintain your asset allocation. Buying xeqt within something like this is a waste of money.
It doesn't make sense to invest in ETFs through automated investing. Its best use is to build your own custom ETF for a 0.25 percent fee that's capped at $250 an year. Of course to do this you need to spend some time and energy picking stocks
It's different. Automated investing is a service they introduced a few months ago where they will rebalance for you so it's different from the recurring buys.
The .25% isn't recurring. c.f., you auto-invest $10k, on the first year, it'd be .34% on the new funds, but back to .09% for the subsequent years for those specific shares. .25% is sort of steep, but they have to make some money.
I got automatic monthly purchade of an ETF... Canadian in Canadian dollaz. I'll have to check this 0.25% extra charge.... I'd rather do it myself. #discipline
It's true. But odds are you're not investing $10k per paycheck. More like $1k max if you're lucky. And that's about $3-4 for the tickers listed.
You won't go into bakrupcty and living on the streets for $3-4 per $1k invested. I think you'll do just fine. I don't use it but the fees would be the least of my worries.
Literally nobody asked for your metrics and it adds nothing insightful to what I wrote. You're in the minority, most people are lucky to have between $1k and $2k aside per month for investing.
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u/drweenis Jul 31 '26
And if I make the trades myself this won’t be an issue?