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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
Use: ETF Portfolio
Wealthawesome Score: 4.5/5
- Low MER
- No need to rebalance
- Simple to use
- Worldwide exposure
- Easy to buy and sell
- Home bias
- Slightly higher fees than competitors
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.
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:
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.
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.
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.
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.
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.
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.