VBAL Review 2022: Vanguard Balanced ETF Portfolio

If you’re looking for one of the easiest ways to invest in ETFs, you must consider an all-in-one ETF.

Vanguard Balanced ETF Portfolio (VBAL) is one of those ETFs that you can set and forget and not have to worry about rebalancing.

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.

Our Verdict
Vanguard VBAL Review 2021
9/10Our Score

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 is currently trading close to a price of $26.5.

VBAL Key Facts

As of June 30, 2022:

  • Ticker Symbol: VBAL.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $2.052 Billion
  • MER: 0.24%
  • 12-Month Trailing Yield: 2.11%
  • Currency Traded: CAD
  • Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available

Vanguard VBAL MER

The VBAL Management Expense Ratio (MER) is a reasonable 0.24%

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 May 31, 2022:

  • VBAL Dividend schedule: Quarterly
  • Equity Yield (Dividend): 2.11%

VBAL Performance History

VBAL does not have much performance history since it was only introduced in 2018.

However, its performance has since improved.

VBAL Performance History

Showing 31 Jan 2018 – 30 Jun 2022:

Fund TypeMonth EndYTD1YR3YR5YR10YRSince Inception
VBAL (Market Price)−5.17%−14.41%−10.85%+2.84%+ 3.20%
VBAL (NAV)− 5.13%−14.37%−10.81%+2.86%+ 3.20%
Source: Vanguard.ca

Go to the Vanguard website for real-time performance numbers of VBAL.

What Does Vanguard VBAL Invest In?

VBAL Asset Allocation

VBAL aims to invest about 60% in equity and 40% in fixed income.

As of May 31, 2022:

StocksBondsShort-term Reserves
60.35%39.59%0.06%
Source: Vanguard.ca

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.

As of May 31, 2022:

Fund
U.S. Total Market Index ETF25.83%
Canadian Aggregate Bond Index ETF23.35%
FTSE Canada All Cap Index ETF18.27%
FTSE Developed All Cap ex North America Index ETF11.84%
Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged)8.57%
U.S. Aggregate Bond Index ETF (CAD-hedged)7.68%
FTSE Emerging Markets All Cap Index ETF4.44%
Source: Vanguard.ca

Vanguard VBAL Holdings – Top Stocks

VBAL top holdings are some of the biggest stock names in Canada and the U.S.

As of May 31, 2022:

Holding Name% of Market ValueSector
Apple Inc.1.30552%Computer Hardware
Microsoft Corp.1.15313%Software
Royal Bank of Canada1.08226%Banks
Toronto-Dominion Bank1.00992%Banks
Enbridge Inc.0.67935%Pipelines
Bank of Nova Scotia0.59776%Banks
Amazon.com Inc.0.58831%Diversified Retailers
Canadian Natural Resources Ltd.0.55842%Oil: Crude Producers
Bank of Montreal0.52594%Banks
Brookfield Asset Management Inc. Class A0.48930%Asset Managers and Custodians
Source: Vanguard.ca

VBAL Market Allocation

Here is the country and region that VBAL invests in, it is quite comprehensive:

As of May 31, 2022:

CountryRegionFund
United States of AmericaNorth America42.8%
CanadaNorth America30.5%
JapanPacific4.4%
United KingdomEurope3.0%
ChinaEmerging Markets2.4%
FranceEurope1.8%
SwitzerlandEurope1.7%
AustraliaPacific1.6%
TaiwanEmerging Markets1.4%
GermanyEurope1.4%
Total91.0%
Source: Vanguard.ca

VBAL Portfolio Characteristics

Here are some key ratios and statistics for VBAL’s stocks and bonds. With over 13,000 stocks, you are extremely well-diversified

As of May 31, 2022:

Stocks

FundamentalsFund
Number of Stocks13,644
Median Market Cap$69.5 B
Price / Earnings Ratio 14.8 x
Price / Book Ratio 2.3 x
Return on Equity 13.7%
Earnings Growth Rate 14.6%
Source: Vanguard.ca

Bonds

FundamentalsFund
Number of Bonds17,941
Yield to Maturity
Average Duration7.4 years
Average Maturity10.3 years
Average Coupon2.4%
Short-term Reserves0.1%
Source: Vanguard.ca

VBAL Market Capitalization

VBAL invests main in large-cap companies but has exposure to several other asset size categories as well.

As of May 31, 2022:

CapitalizationFund
Large83.01%
Medium/Large2.18%
Medium7.30%
Medium/Small3.30%
Small4.17%
Total99.96%
Source: Vanguard.ca

VBAL Vanguard Sector Weighting

The top four sectors of VBAL ETF stocks are financials, technology, industrials, and consumer discretionary.

As of May 31, 2022:

SectorFund
Financials19.7%
Technology16.1%
Industrials12.1%
Consumer Discretionary11.3%
Energy9.2%
Health Care8.5%
Basic Materials6.7%
Consumer Staples5.2%
Utilities4.1%
Telecommunications3.7%
Real Estate3.3%
Total100.0%
Source: Vanguard.ca

VBAL Distribution by credit quality

As of May 31, 2022:

Credit RatingFund
AAA37.7%
AA28.6%
A18.5%
BBB13.0%
Less than BBB0.0%
NR2.2%
Total100.0%
Source: Vanguard.ca

VBAL Distribution by credit issuer

As of May 31, 2022:

IssuerFund
Treasury36.2%
Local Authority25.3%
Industrial10.4%
Financial Institutions10.2%
Agency8.2%
Utility2.2%
Other2.0%
Mortgage-Backed Security Pass-through2.0%
Supranational1.8%
Covered1.1%
Sovereign0.4%
Commercial Mortgage-Backed Security0.3%
Asset-Backed Security0.1%
Total100.0%
Source: Vanguard.ca

VBAL Distribution by credit maturity

As of May 31, 2022:

MaturityFund
Other2.0%
Over 25 Years11.2%
20 – 25 Years5.9%
15 – 20 Years6.2%
10 – 15 Years5.0%
5 – 10 Years29.1%
1 – 5 Years40.3%
Under 1 Year0.3%
Total100.0%
Source: Vanguard.ca

VBAL Risk And Volatility

As of June 30, 2022:

Fund TypeR-SquaredBETAALPHAStandard DeviationSharpe Ratio
Fund9.58%0.50
Benchmark
Source: Vanguard.ca

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

VBAL Infographic

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

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 them.

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 

You can purchase ETFs in Canada through most Canadian brokerage platforms that offer stock and ETF trading. My top choices are Wealthsimple Trade and Questrade.

ImageProduct TitleFeaturesPrice
Editor's Choice
Wealthsimple Trade
Wealthsimple Trade
  • ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable Brand
  • Beautiful Design
Get $25 Signup Bonus
Reliable Pick
Questrade
Questrade
  • ETF buys have $0 trading fees
  • Desktop and mobile trading
  • Most types of accounts available
Get $50 Free Stock Trades

To learn more, check out my full breakdown of the best trading platforms in Canada here.

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.

Here’s a full overview of Vanguard’s funds for you to learn more.

Photo of author
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 2022: Vanguard Balanced ETF Portfolio”

  1. 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
  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! 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

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