All-in-one ETFs is one of the easiest ways to invest in Canada.
They don’t require any rebalancing, usually have very low fees, and provide ample diversification.
Read this Horizons HBAL review to see if this balanced all-in-one ETF portfolio is right for you.
ETF portfolio
The Horizons HBAL Balanced TRI ETF Portfolio is an all-in-one ETF portfolio that provides investors with exposure to a diverse basket of fixed-income and equity securities.
- Very low MER
- Easy to purchase
- One-fund solution with automatic rebalancing
- Hedges currency risk
- It may be too heavily tech-weighted
What is Horizons HBAL ETF Portfolio?
Horizons HBAL is an ETF consisting of several underlying ETFs. HBAL invests primarily in Horizons’ Total Return Index ETFs.
Balanced twice a year to ensure that it represents a consistent level of balanced risk, HBAL uses currency forwards to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.
Compared to most of its closest peers, Horizons HBAL is a lower-cost one-ticket solution for investors seeking long-term capital growth with a “new balanced” 70/30 asset allocation split.
HBAL.TO is currently trading at close to $13.95.
HBAL Key Facts
As of Dec 31, 2021:
- Ticker Symbol: HBAL.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $139.49 Million (As of July 15, 2022)
- MER: 0.16%
- 12-Month Trailing Yield: 0.08%
- Currency Traded: CAD
- Registered Accounts Availability: Yes
How do All-In-One Portfolios Work?
Before all-in-one ETFs came around, making an ETF portfolio was a lot harder. You had to buy several ETFs, and you would have to rebalance them at times to match your fixed income to the equity that is suited to your risk tolerance.
Created as a fund of funds, all-in-one ETFs are built using several ETFs and usually give worldwide diversification.
All-in-one ETFs are much simpler to use, and you won’t need to rebalance your portfolio.
Horizons HBAL MER and Fees
Horizons HBAL has a Management Expense Ratio (MER) that is significantly low at 0.16%. HBAL’s low MER makes it more affordable than most of its closest peers offered by other providers.
Considering the charges for mutual fund products being over 2% on average, it is easy to see why many Canadians are choosing all-in-one ETF portfolios like Horizons HBAL over mutual funds.
Horizons HBAL ETF Dividend Yield
Horizons HBAL’s dividend yield as of December 31, 2021:
- 12-month trailing yield: 0.08%
- Distribution yield: 0.06%
- Dividend schedule: Annual
Horizons HBAL Performance and Returns
Growth of a hypothetical $10,000 since inception of Horizons HBAL:
As of June 30, 2022:
| 1mo | 3mo | 6mo | YTD | 1 yr | 3 yr | 5 yr | 10 yr | SIR** | |
|---|---|---|---|---|---|---|---|---|---|
| Horizons Balanced TRI ETF Portfolio | -5.98 | -12.56 | -17.72 | -17.72 | -13.15 | 4.95 | — | — | 5.04 |
Go to the Horizons website for real-time performance numbers of HBAL.
What does Horizons HBAL Invest in?
Horizons HBAL is considered to be a balanced all-in-one ETF portfolio that invests in ETFs distributed by Horizons. The ETF portfolio targets a new balance between equity and fixed-income securities with a 70% allocation towards stocks and 30% allocation towards bonds.
In terms of geographical diversification, it allocates around 45-55% of its funds to investments centered towards the US, 25-35% towards Canadian securities, and the remainder to various global securities, providing investors with an MER lower than other traditional Canadian balanced ETF portfolios like Vanguard VBAL and iShares XBAL.
Horizons HBAL Asset Allocation
Typically, balanced all-in-one ETF portfolios provide investors with a balanced exposure to fixed-income to equity securities. Horizons HBAL has an asset allocation that targets a 70/30 split between equity and fixed-income securities.
A traditional balanced ETF portfolio might go for an even 50/50 split or a 60/40 split between equity and fixed-income securities to significantly reduce the risk from turbulent markets. However, HBAL focuses 70% of its allocation on equity securities to provide its investors with greater exposure to stocks for more potential substantial growth.
| HBAL | |
| Fixed Income | 30.0% |
| Equities | 70.0% |
| Asset Class | Net | Short | Long | Cat. | Index |
|---|---|---|---|---|---|
| Canadian Equity | 10.78 | 0.00 | 10.78 | 17.72 | 18.74 |
| U.S. Equity | 37.33 | 0.00 | 37.33 | 27.99 | 30.21 |
| International Equity | 0.48 | 0.00 | 0.48 | 18.70 | 24.85 |
| Fixed Income | 30.04 | 0.00 | 30.04 | 21.26 | 21.03 |
| Other | 10.14 | 0.50 | 10.63 | 10.11 | 5.17 |
| Cash | 11.24 | 72.56 | 83.79 | 7.43 | 0.00 |
Horizons HBAL Top Holdings
Horizons HBAL is a collection of various ETFs managed by Horizons.
HBAL invests primarily in Horizons’ Total Return Index ETFs, focusing on a wide variety of ETFs offered and managed by Horizons itself.
As of July 15, 2022, HBAL’s top holding is the Horizons US Large Cap Index ETF comprising 22.86% of the entire portfolio. The Horizons Canadian Select Universe Bond ETF comes in second with a 20.80% asset allocation, and the Horizons NASDAQ-100 Index ETF is the portfolio’s third most significant ETF at 15.87%.
| Security Name | Weight |
|---|---|
| Horizons US Large Cap Index ETF (HULC) | 22.86% |
| Horizons Cdn Select Universe Bond ETF (HBB) | 20.80% |
| Horizons NASDAQ-100 Index ETF (HXQ) | 15.87% |
| Horizons US 7-10 Year Treasury Bond ETF (HTB) | 11.12% |
| Horizons S&P/TSX 60 Index ETF (HXT) | 10.29% |
| Horizons Intl Developed Mkts Eq Ix ETF (HXDM) | 9.63% |
| Horizons Emerging Markets Equity IdxETF C$ (HXEM) | 4.71% |
| Horizons Europe 50 Index ETF (HXX) | 4.43% |
| CASH | 0.29% |
Horizons HBAL Sector Weighting
As of May 31, 2022, Horizons HBAL’s sector weighting veers heavily towards the Technology sector, accounting for 28.66% of all its holdings. Its allocation toward the Financial Services sector comes in second at 14.25%. It has allocated 10.92% of its funds to the Consumer Cyclical sector. Horizons HBAL’s least significant investment is in the real estate sector at 1.53%.
| Sectors | Investment % |
|---|---|
| Basic Materials | 3.22 |
| Consumer Cyclical | 10.92 |
| Financial Services | 14.25 |
| Real Estate | 1.53 |
| Communication Services | 10.74 |
| Energy | 6.11 |
| Industrials | 7.35 |
| Technology | 28.66 |
| Consumer Defensive | 5.92 |
| Healthcare | 8.73 |
| Utilities | 2.57 |
Horizons HBAL Risk Indicator
HBAL is a low-to-medium risk ETF:
Source: HorizonsETFs.com
Horizons HBAL vs. Other ETFs
Horizons HBAL vs. Vanguard VBAL
Vanguard VBAL is Vanguard’s Balanced All-In-One ETF portfolio that is comparable to Horizons HBAL in terms of what it invests in and its investment goals.
VBAL provides investors with lower exposure to US stocks than Horizons HBAL. VBAL has a higher MER of 0.25%.
Read my full Vanguard VBAL Review here to find out more.
iShares XAW is an ETF portfolio offered by BlackRock. Unlike Horizons HBAL, XAW is an ETF that invests primarily in equity securities. Considering its exposure to an all-equity portfolio, iShares XAW is more prone to volatility in turbulent market conditions.
If you are alright with the significant risks that come with investing in an all-equity portfolio, you can consider iShares XAW for the potential rewards in a booming market.
Read my full iShares XAW review here.
Is Horizons HBAL a Good Investment For You?
Horizons HBAL is still a relatively new ETF portfolio because it was launched on August 1, 2018. However, it has shown promise in the time it has been around when it comes to providing its investors with capital growth.
Balanced portfolios like Horizons HBAL are suitable for investors with a low to moderate risk tolerance. It can provide you with long-term capital growth through its 70/30 equity to fixed-income split that can reduce risk to your capital.
The ETF portfolio can be an excellent pick for your portfolio if you seek gradual capital growth, or you are new to investing, and you want an ideal way to grow your wealth without understanding the complexities of stock market investing.
You will not need to rebalance your portfolio manually because this one-ticket solution by Horizons will rebalance it automatically to stay aligned with its investment goals.
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Conclusion
All-in-one ETF portfolios provide investors with a one-stop solution that reduces your effort when it comes to investing. Instead of choosing individual stocks or ETFs to align with your investment goals, you can allow the all-in-one ETF portfolio to handle it all for you.
The Horizons HBAL Balanced TRI ETF portfolio is an excellent pick, as it has low MERs but still provides diversification equal to that of it’s competitors.
Read more about the other Horizons All-In-One ETFs.
