Vanguard Investments Canada has listed a new all-in-one and low-cost retirement income ETF, adding to its line-up of asset allocation ETFs.

The new Vanguard Retirement Income ETF Portfolio, which began trading on the TSX on Sept. 16, is made up of eight existing low-cost underlying Vanguard index ETFs, four Vanguard equity ETFs and four Vanguard fixed income ETFs.

ETF can help retired Canadians meet bills

“As they retire, Canadians face a new set of financial challenges, including keeping up with inflation, meeting their monthly spending needs and the risk of potentially outliving their assets," said Kathy Bock, managing director and head, Vanguard Investments Canada Inc. "This ETF can help manage some of those risks by providing a predictable stream of income within a simple yet sophisticated "all-in-one" retirement solution that provides broad diversification and regular rebalancing, at a low cost."

A recent investor poll by Vanguard found that retirement is the No. 1 investing objective for Canadians. Last year, a report by the World Economic Forum estimated that Canadians are expected to outlive their savings by an average of 10 years, reflecting similar findings in other developed nations and requiring the need for prudent, low-cost and well-diversified portfolios that can provide dependable income.

Product will appeal to investors and advisors alike

"Following one of the sharpest market declines in recent memory earlier this year, Canadian investors and advisors are looking to effectively safeguard and manage their hard-earned assets to meet their retirement needs," said Scott Johnston, head of product, Vanguard Canada. "For financial advisors, this provides a scalable and transparent solution for clients as a complement to their retirement strategy. For investors, this is a one-stop globally diversified and turnkey option that provides capital appreciation and monthly tax-efficient income."

The management fee for the new ETF is 0.29 per cent with a targeted annual payout of four per cent. It offers broad diversification, transparent portfolio construction and regular rebalancing and monitoring.