If you’re looking for a passive balanced portfolio ETF, Vanguard Balanced ETF Portfolio (VBAL) might be what you’re looking for.
VBAL is part of Vanguard Canada’s very popular all-in-one asset allocation portfolio series.
Let’s take a closer look at it in this Vanguard VBAL ETF review.
Balanced ETF All-In-One Portfolio
Vanguard VBAL is an all-in-one ETF portfolio with a 60% Equity and 40% Fixed Income split that invests globally.
- Has a low MER
- No need to rebalance it
- Is simple to use
- Offers a worldwide exposure
- Is easy to buy and sell
- Home bias
- Has slightly higher fees than competitors
What Is Vanguard VBAL ETF?
VBAL is a balanced exchange-traded fund (ETF) portfolio that has been offered by Vanguard Canada since January 25, 2018.
The fund is part of the Vanguard portfolio series that has become popular because of investors who want simple and affordable access to passive investing.
Investors do not have to worry about rebalancing VBAL since the portfolios self-allocate.
VBAL holds $2.201 billion in Assets Under Management (AUM) as of Dec 10, 2021.
What Does Vanguard VBAL Invest In?
VBAL Asset Allocation
VBAL aims to invest about 60% in equity and 40% in fixed income.
VBAL Vanguard ETF Allocation
It is made up of several different Vanguard ETFs and is designed to give worldwide market exposure to its investors.
The fund includes Canada, the U.S, global, all-cap indexes equities, and even a small portion of emerging markets.
It also includes fixed-income from Canada, the U.S, and global countries.
VBAL Vanguard Sector Weighting
The top four sectors of VBAL ETF stocks are the financials, technology, consumer discretionary, and industrials.
Vanguard VBAL MER
The VBAL Management Expense Ratio (MER) is a reasonable 0.25%.
Canadian mutual funds fees charge on average over 2% per year, so VBAL is a much cheaper solution than mutual funds.
Vanguard VBAL Dividend
As of Nov 30, 2021:
- VBAL Dividend schedule: Quarterly
- Equity Yield (Dividend): 2.5%
VBAL Performance History
VBAL does not have much performance history since it was only introduced in 2018.
The market crash in March 2020 also contributed to its negative performance.
However, its performance has since improved.
As of November 30, 2021, you can see that:
Vanguard VBAL Holdings – Top Stocks
VBAL top holdings are some of the biggest stock names in Canada and the U.S. The banking, technology, and pipeline sectors are well represented in VBAL’s top holdings
Vanguard VBAL ETF vs Other ETFs
VBAL vs VGRO
VGRO is Vanguard’s Growth Portfolio ETF. Similar to VBAL, VGRO also consists of many other Vanguard ETFs and is self-allocating.
However, their main difference is that VGRO is less conservative. It aims for around 80% equity and 20% fixed income, whereas VBAL aims for around 60% equity and 40% fixed income.
Read a full VGRO review here.
VBAL vs XBAL
XBAL stands for iShares Core Balanced ETF Portfolio. With XBAL, you’ll get a slightly lower MER of 0.2%. You’ll also get more exposure to the U.S market and less exposure to the Canadian equity market. So, XBAL is a good alternative to VBAL.
Read a full XBAL review here.
VBAL Investing Alternatives
Despite the advantages of all-in-one portfolios, they might not be for everyone. However, there are a couple of good alternatives, like DIY investing and robo-advisors.
Do-It-Yourself (DIY) Investing
With DIY investing, you can build your own portfolio with a discount brokerage. Although you’ll be spending more time rebalancing your investments and researching what to purchase, the fees will be lower.
An online brokerage like Questrade or Wealthsimple Trade can help you make commission-free trades.
Read a full review of Wealthsimple Trade here.
A robo-advisor, on the other hand, has a similar investment philosophy as the VBAL portfolio. It also invests in several ETFs that match your risk tolerance and investment goals.
Robo advisor fees will be higher than the VBAL MER, but you can also get access to human advisors when you need it.
Read a full review on Wealthsimple, the leading robo-advisor in Canada here.
You can also read a list of what I think are the top investment options in Canada here.
Who Should Buy Vanguard VBAL?
VBAL is highly recommended for you if:
- You want an all-in-one balanced investment portfolio that gives you exposure to stocks and bonds.
- The asset allocation of about 60% equity and 40% fixed income suits your risk tolerance level and investment goals. There’s this Vanguard investor questionnaire that you can take if you’re uncertain.
- You don’t want to spend time rebalancing your investments.
How to Buy Vanguard VBAL ETF
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To learn more, check out my full breakdown of the best trading platforms in Canada here.
VBAL is an excellent choice for Canadian investors who don’t want to construct their own balanced portfolios.
Vanguard is one of the top ETF providers that is changing the way that many Canadians are investing.
Here’s a full overview of Vanguard’s funds for you to learn more.