Wealthsimple's managed accounts are designed to help you achieve financial freedom by giving you easy, low-cost and transparent financial tools.
Every time you open a managed account, we’ll help you choose the right portfolio for your investment goals. In the background, we take care of the hard stuff like asset allocation, automatic rebalancing and tax management.
Our managed accounts work based on the following principles -
1. Diversify your assets
History shows that when you try to predict the future – by picking stocks, for example – rather than investing in a highly diversified way, you are more likely to underperform the market.
With our managed accounts, we don’t try to time or predict the market, but instead hold assets that will perform well at different times. This style of investing results in smoother, more attractive returns over time.
Wealthsimple’s portfolios are designed by an expert team of investors who make sure your portfolio will be resilient across market environments and cycles. We diversify our portfolios across asset classes and geography and have a bias towards higher quality, more resilient assets.
2. Tune out the noise
When you open a managed account, we’ll ask you about your investment experience, financial circumstances, what you're saving for, and when you need to access your funds.
This helps us customize your portfolio to your specific timeline and risk profile.
Our goal is to help you invest your funds in a way that maximizes your chances of making a positive return, while minimizing the chances that you’ll lose money by the time you need to access your funds.
This way, you can tune out the news headlines and weather any bad times knowing that you’ve taken on the right level of risk for your situation and have given yourself the right amount of time to bounce back from any losses.
3. Keep costs low
While most mutual funds in Canada charge more than 2% a year, our managed accounts charge between 0.4% - 0.5%. Over the course of many years, these fees can make a huge difference to your returns.
Wealthsimple's managed accounts are cheaper than mutual funds because we frequently use ETFs to track entire genres of investments. Unlike mutual funds, we aren’t trying to guess individual winners in the stock or bond markets and so our portfolio managers don’t need to make large numbers of trades – and trading is what costs money.
We’ll always choose the right ETF for you given your tax situation, any embedded capital gains you may have, and your account type.
We aim to optimize for withholding taxes within a fund and provide you with the lowest total cost of ownership. For example, we use certain ETFs traded on US exchanges for RRSPs, but use Canadian-listed ETFs for TFSAs.
We also negotiate on your behalf with ETF providers to reduce your management expense ratio fees (MER).