VBAL Review 2021: Vanguard Balanced ETF Portfolio

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 asset allocation portfolio series.

Let’s take a closer look at it in this Vanguard VBAL ETF review.

VBAL holds $1.566 billion in Assets Under Management (AUM) as of February 28, 2021.

Our Verdict
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Vanguard VBAL ETF

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.

Pros

  • Has a low MER
  • No need to rebalance it
  • Is simple to use
  • Offers a worldwide exposure
  • Is easy to buy and sell

Cons

  • 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 $1.566 billion in Assets Under Management (AUM) as of February 28, 2021.

What Does Vanguard VBAL Invest In?

VBAL Asset Allocation

VBAL aims to invest 60.19% in equity and 39.76% in fixed income.

VBAL Vanguard ETF Allocation

It is made up of several different Vanguard ETFs and is designed to give a 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 charge on average over 2% per year, so VBAL is a much cheaper solution than mutual funds.

Vanguard VBAL Dividend

As of February 28, 2021:

  • VBAL Dividend schedule: Quarterly
  • Equity Yield (Dividend): 2.1%

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 February 28, 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. 

ETF investing VBAL

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.

Robo-Advisor

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.

ETF investing

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 

There are many ways to buy VBAL, but the cheapest way is generally by using a discount broker.

I have been using Questrade as my discount broker for all my stock and ETF trading for the past eight years.

 You can buy all Canadian ETFs like VBAL for free on the platform. You can also get $50 in free stock trades with this offer when you open an account at Questrade using the link in the description below.

Conclusion

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.

Vanguard VBAL ETF Review


VBAL Review 2021: Vanguard Balanced ETF Portfolio

Vanguard VBAL is a fantastic ETF portfolio for Canadian investors. 60% equity and 40% Fixed income and worldwide exposure to different asset classes makes VBAL a top choice for passive investors in Canada

Product In-Stock: InStock

Editor's Rating:
4.5
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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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10 thoughts on “VBAL Review 2021: Vanguard Balanced ETF Portfolio”

  1. Hi Chris! I have a question about fees for asset allocation funds that have underlying ETFs. Say for VBAL the MER is 0.25%. It’s made up of a bunch of ETFs which all have their own MERs. Are there any invisible fees that get included from the underlying funds in addition to the overall VBAL fee? or is 0.25% what you pay.

    Thanks!

    Reply
  2. If I am heavily invested in VBAL and then later decide I want to be more aggressive with my investments. Should I sell my VBAL and buy VGRO ?
    OR
    Should I buy a Vanguard Total Index ?
    OR
    is it better to start a new portfolio where I manually adjust stocks to bond ratio ?

    Reply
    • Hey Dan, yes that would be a good strategy, to switch to VGRO if you want to be more aggressive. That would be the easiest transition. If you buy just vanguard total index, you would be 100% equities which I don’t recommend for most people. The third option is the cheapest, but also will take you the most time because you will have to rebalance it from time to time.

      Reply
      • Hi Chris, Thanks for the quick reply.
        I am leaning more towards VGRO since like you said its the easiest.

        I was also thinking what if I mix 100% equities like Vanguard total index to my VBAL ?
        Is mixing equities with a already all in one solution like VBAL ( VBAL + 100% equities ) a good idea ?
        Do you still recommend I go with VGRO instead of mixing ?

        Reply
        • Ah I understand your question now. I would recommend going all VGRO instead of mixing. If you mix, it kind of defeats the purpose of the portfolio. You’ll be getting a lot of overlapping and duplicate purchases of stocks. Either go full portfolio, or full mixing (example is an equity ETF combined with a fixed income ETF)

          Reply
  3. Hi Chris,as a senior aged investor I am going to switch from mutual s to etf,s.In your opinion is this a good idea and is veal a good choice
    Thanks Tom

    Reply
    • Hey Tom, many investors are switching from mutual funds to ETFs due to the lower fees. It depends on your unique circumstances though and it’s hard to say without knowing more information. I will be making a course about how to invest in ETFs soon, maybe you will be interested in that? I can add you to the list if you are interested.

      Reply

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