VBAL Review 2020: Vanguard Balanced ETF Portfolio

Vanguard VBAL Review
Advertiser Disclosure This post may contain an affiliate relationship with companies that Wealth Awesome believes in personally. We may receive a fee when you click on a link, at no additional cost to you.
Last updated Jul 22, 2020

If you’re looking for a passive balanced portfolio ETF, Vanguard 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 the most popular of the series in this Vanguard VBAL ETF review.

VBAL has $1 billion in assets under management as of Feb 29, 2020

Review of: Vanguard VBAL

Use: ETF Portfolio






Wealthawesome Score: 4.5/5

Summary: Vanguard VBAL is a all-in-one ETF portfolio with a 60% Equity and 40% Fixed Income split.

Low fee ETF

What is Vanguard VBAL ETF?

VBAL is a balanced exchange-traded fund (ETF) portfolio that is offered by Vanguard Canada since January 25, 2018.

The fund is part of the Vanguard portfolio series. The portfolios have exploded in popularity because investors are hungry for simple and affordable access to passive investing.

VBAL provides an “all-in-one” solution for investors looking for low-cost passive investing. Investors do not have to worry about rebalancing VBAL, as the portfolios self-allocate.

VBAL holds $1.0 billion in Assets Under Management (AUM) as of Feb 29, 2020.

What does Vanguard VBAL Invest in?

VBAL Asset Allocation

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

VBAL Vanguard ETF Allocation

VBAL is made up of several different Vanguard ETFs and is designed to give a worldwide market exposure to its investors.

The fund includes Canada, U.S, and global all-cap indexes equities. It even includes a small portion of emerging markets.

VBAL 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 financials, industrials, technology, and consumer goods and services.

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.

 

Buy VBAL for free with Questrade

Vanguard VBAL Dividend

As of Feb 29, 2019:

  • VBAL Dividend schedule: Quarterly
  • Equity Yield (Dividend): 2.77%

VBAL Performance History

VBAL does not have much performance history since it was only introduced in 2018. In March 2020 the market crashed, which contributes to its negative performance below.

The fund will perform accordingly to the combination of its underlying ETFs.

As of March 31, 2020:

Buy VBAL for free with Questrade

Vanguard VBAL Holdings – Top Stocks

VBAL top holdings are some of the biggest stock names in Canada and the US. Banking, Tech, and Pipelines 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.

The main difference with VBAL is VGRO is less conservative. It aims for an 80% equity and 20% fixed income whereas VBAL is 60% equity and 40% fixed income.

Read a full VGRO review here.

VBAL vs XBAL

XBAL is iShares Core Balanced ETF Portfolio. With XBAL, you’ll get a slightly lower MER at 0.2%. You’ll also get more exposure to the U.S market and less exposure to the Canadian equity market. XBAL is a good alternative to VBAL.

ETF investing VBAL

VBAL Investing Alternatives

All-in-one portfolios might not be for everyone. Here are a couple of good alternatives, and how they compare to portfolio solutions

Do-it-yourself (DIY) Investing

You can build your own portfolio with a discount brokerage. You’ll be spending more time rebalancing your investments and researching what to purchase, but the fees will be lower.

Check out an online brokerage like Questrade or Wealthsimple Trade, where you can make commission-free trades.

Read a full review of Wealthsimple Trade here.

Robo-Advisor

A robo-advisor has a similar investment philosophy as the VBAL portfolio would. They also invest in several ETFs to match your risk tolerance and investment goals. Robo advisor fees will be higher than the VBAL M.E.R, but you also get access to human advisors whenever 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?

  • You want an all-in-one balanced investment portfolio that gives you exposure to the entire world of stocks and bonds.
  • If the asset allocation of 60% Equity and 40% fixed income is suitable for your risk tolerance and investment goals. Take this Vanguard investor questionnaire if you’re uncertain.
  • You don’t want to spend time rebalancing your investments.

Buy VBAL for free with Questrade

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 the discount broker Questrade 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.

Get $50 in free stock trades with this offer when you open an account at Questrade.

Conclusion

VBAL is an excellent choice for Canadian investors. VBAL provides a simple solution for those 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

If you liked this article…

<a href="https://wealthawesome.com/author/christopher-liew/" target="_self">Christopher Liew, CFA</a>

Christopher Liew, CFA

Creator of Wealth Awesome

A Canadian 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.

Special Offers

Wealthsimple: Get $50 Cash Bonus: Claim Offer

Borrowell: Get a FREE credit score report: Claim Offer

6 Comments

  1. Catherine

    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
    • Christopher Liew, CFA

      Hi Catherine, no there are no additional MER fees. The 0.25% is the total MER for VBAl, even though it consists of other ETFs.

      Reply
  2. Dan

    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
    • Christopher Liew, CFA

      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
      • Dan

        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
        • Christopher Liew, CFA

          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

Submit a Comment

Your email address will not be published. Required fields are marked *

Join Thousands of Canadians

Join Thousands of Canadians

Join the Wealth Awesome mailing list to receive the latest news and updates, plus a free Canadian Personal Finance Resource Guide.

You have Successfully Subscribed!