If you’re looking for a passive all-equity portfolio ETF, Vanguard VEQT could be a good option for you.
VEQT is part of Vanguard Canada’s popular all-in-one portfolio series, which provides a simple “set-it-and-forget-it” strategy for ETF investors.
Let’s take a look at what’s under the hood with this Vanguard VEQT ETF review.
All-Equity ETF Portfolio
A 100% equity ETF portfolio for Canadians that invests in worldwide assets.
- Simple and effective
- Low MER
- Easily accessible
- Worldwide exposure
- Home bias
- Slightly higher fees than competitors
What is Vanguard VEQT ETF?
VEQT is a low-cost exchange-traded fund (ETF) that is offered by Vanguard Canada since January 29, 2019.
The fund is part of the Vanguard portfolio series, an “all-in-one” solution for investors looking for low-cost passive investing without having to worry about rebalancing.
VEQT is currently trading close to a price of $37.59.
VEQT Key Facts
As of October 11, 2023:
- Ticker Symbol: VEQT.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $2.87 Billion
- MER: 0.24%
- 12-Month Trailing Yield: 1.95%
- Currency Traded: CAD
- Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available
Vanguard VEQT MER
The VEQT Management Expense Ratio (MER) is a reasonable 0.24%.
Considering that mutual funds fees, on average, are about 2% per year, it’s easy to see why many Canadians are choosing ETFs over mutual funds.
Vanguard VEQT Dividend
As of September 20, 2023:
- 12-month trailing yield: 1.95%
- Distribution yield: 1.95%
- Dividend schedule: Annually
VEQT Performance
VEQT does not have much performance history since it started in 2019, but there shouldn’t be many surprises here. The fund should perform accordingly to the combination of its underlying ETFs:
Showing 31 Jan 2019 – 30 Sep 2023
| Fund Type | Month End | YTD | 1YR | 3YR | Since Inception |
|---|---|---|---|---|---|
| VEQT (Market Price) | −3.76% | +7.69% | +15.58% | +8.09% | +8.65% |
| VEQT (NAV) | −3.71% | +7.87% | +15.57% | +8.13% | +8.65% |
Go to the Vanguard website for real-time performance numbers of VEQT.
What does Vanguard VEQT Invest in?
VEQT comprises of several different Vanguard ETFs and is designed to give worldwide exposure.
VEQT aims to invest 100% in equity. The fund includes worldwide, all-cap indexes, and even emerging markets.
From the breakdown below, VEQT has about 73.95% invested in Canada and the U.S., 18.57% outside of North America, and the remaining 7.48% in emerging markets.
As of Aug 31, 2023:
| Fund | |
|---|---|
| U.S. Total Market Index ETF | 44.33% |
| FTSE Canada All Cap Index ETF | 29.63% |
| FTSE Developed All Cap ex North America Index ETF | 18.95% |
| FTSE Emerging Markets All Cap Index ETF | 7.09% |
VEQT Market allocation
Here is the country and region that VEQT invests in; it is quite comprehensive:
As of Aug 31, 2023:
| Country | Region | Fund |
|---|---|---|
| United States of America | North America | 44.4% |
| Canada | North America | 29.7% |
| Japan | Pacific | 4.5% |
| United Kingdom | Europe | 2.8% |
| China | Emerging Markets | 2.2% |
| France | Europe | 1.9% |
| Switzerland | Europe | 1.6% |
| Germany | Europe | 1.4% |
| Australia | Pacific | 1.4% |
| India | Emerging Markets | 1.3% |
| Total | 91.2% |
VEQT Portfolio Characteristics
Here are some key ratios and statistics for VEQT’s stocks and bonds.
As of Aug 31, 2023:
Stocks
| Fundamentals | Fund |
|---|---|
| Number of Stocks | 13,626 |
| Median Market Cap | $74.9 B |
| Price / Earnings Ratio | 16.5 x |
| Price / Book Ratio | 2.2 x |
| Return on Equity | 14.3% |
| Earnings Growth Rate | 13.9% |
VEQT Market Capitalization
VEQT invests mostly in large-cap companies, but it is diverse in its holdings.
As of Aug 31, 2023:
| Capitalization | Fund |
|---|---|
| Large | 79.95% |
| Medium/Large | 3.37% |
| Medium | 8.04% |
| Medium/Small | 4.09% |
| Small | 4.52% |
| Total | 99.97% |
VEQT Vanguard Sector Weighting
The worldwide exposure gives VEQT a heavier weighting towards financials, technology, and industrials.
As of Aug 31, 2023:
| Sector | Fund |
|---|---|
| Technology | 18.99% |
| Financials | 18.69% |
| Industrials | 13.0% |
| Consumer Discretionary | 12.05% |
| Energy | 8.54% |
| Health Care | 8.25% |
| Basic Materials | 6.19% |
| Consumer Staples | 4.92% |
| Utilities | 3.58% |
| Telecommunications | 3.03% |
| Real Estate | 2.78% |
| Other | 0.00% |
| Total | 100.00% |
VEQT Asset Allocation
VEQT targets a 100% equity and 0% fixed-income asset allocation. Because of this, unless you have a very high-risk tolerance, it is suggested to combine this with something like a bond ETF in order to satisfy your risk requirements.
As of Aug 31, 2023:
| Stocks | Bonds | Short-term Reserves |
| 99.96% | 0.00% | 0.04% |
Vanguard VEQT Holdings
VEQT top holdings are some of the biggest stock names in Canada and America. VEQT holds banking, tech, oil and gas, and energy stocks, plus many others.
As of Aug 31, 2022:
| Holding Name | % of Market Value | Sector |
|---|---|---|
| Apple Inc. | 2.82% | Computer Hardware |
| Microsoft Corp. | 2.45% | Software |
| Royal Bank of Canada | 1.8% | Banks |
| Toronto-Dominion Bank | 1.6% | Banks |
| Amazon.com Inc. | 1.21% | Diversified Retailers |
| NVIDIA Corp. | 1.16% | Semiconductors |
| Shopify Inc. | 1.09% | Consumer Digital Services |
| Canadian Pacific Kansas City Ltd. | 1.06% | Railroads |
| Enbridge Inc. | 1.02% | Pipelines |
| Canadian Natural Resources Ltd. | 1.01% | Oil: Crude Producers |
Risk Mitigation:
For investors concerned about the inherent risks associated with an all-equity fund, it’s advisable to pair VEQT with fixed-income assets. By incorporating bonds or bond ETFs, investors can create a buffer against potential downturns in the stock market, offering a more balanced overall portfolio.
Vanguard VEQT vs Other Funds
VEQT vs VGRO
VGRO is Vanguard’s Growth Portfolio ETF and also consists of many other Vanguard ETFs. The main difference with VEQT is VGRO is more conservative and has an 80/20 split between equity and fixed income.
Read my full VGRO review here.
VEQT vs XAW
iShares XAW is Blackrock’s all-equity portfolio, excluding Canadian investments. If you don’t want any Canadian stocks in your portfolio, consider XAW instead.
VEQT vs VFV
Vanguard VFV is the S&P 500 ETF fund offered with a low 0.08% MER. The fund only invests in American stocks, so it is less diversified than VEQT.
It depends on what you want exposure to and how you are using the ETFs in combination with your other investments. VEQT is self-allocating, so there is no need to rebalance, which is why the MER is higher.
Read my full VFV review here.
Who Should Buy Vanguard VEQT?
- You want an all-in-one passive investment portfolio that gives you exposure to the entire world.
- You don’t want to spend any time rebalancing your investments
- You understand the risks involved with purchasing a 100% equity fund and are using it in combination with your overall investment strategy.
- It’s a versatile fund. If you want 100% exposure to equities and have a very high-risk tolerance, you can consider purchasing VEQT for your entire portfolio. Or, you can combine it with another fixed-income ETF to balance out your risk.
How to buy vanguard vEQT eTF in Canada
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.
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To learn more, check out my full breakdown of the best trading platforms in Canada here.
Conclusion
VEQT is part of Vanguard’s fantastic portfolio series, and I’m excited to see more options like this enter the marketplace for Canadians.
Vanguard is one of many ETF providers that are giving Canadians more low-cost passive investing options, and there will be many more to come in the future.
Learn about all the best all-in-one ETF portfolios in Canada here.
Hello,
Why would one prefer VEQT over VFV other than just diversification. VFV seems to be outperforming VEQT so I am trying to figure out if just holding VFV for a long-term investment would be good. I am a 25 year old new investor that wants long-term passive investment.
VEQT has over 13,000 stocks, VFV has 500 companies, and all American. Some people like the diversification of VEQT over VFV, but I’m not sure if it justifies the higher price tag. I personally like VFV over VEQT for a long-term hold, as I believe in the American stock market strongly still. But you have to make sure it suits your risk preference, try doing a free investor questionnaire at Vanguard to check.
Per my previous comment, please replace error of 3021 date to 2021. Sorry.????
Considering we are in early October 3021, would you add more International or US Etfs to Veqt to tone down the Canadian %, or just add specific sector etfs like energy, or another idea? I’m new to investing, got rid of mutual funds and want to go with ETFs. I am attracted to all-in-one’s as a base. Just looking for some add-on ideas. What about combo of VEQT, XEQT, HGRO as another option, or Veqt with more US or International. Thank you.
Hey Ruth I’m actually in the middle of making an ETF investing course that will address this problem! You can sign up for my newsletter for future updates. I like investing both in the U.S and internationally, and a bit in Canada as a base. Sector ETFs aren’t that necessary if you’re just starting out and could complicate things.
Hi! I am new to investing and wondering if you hold an etf like VEQT is it useful to also add in a high dividend etf like VDY or even CDZ.
I don’t think it’s that useful, and it kind of defeats the purpose of VEQT. VEQT is meant to be a portfolio ETF and shouldn’t be combined with other equity ETFs. It does make sense though since it’s all equity, if you want to get some fixed income exposure, to combine it with a Bond ETF.
What about VEQT/VFV combination?
It’s not the worst thing you can do, but I wouldn’t combine VEQT with another Equity ETF, just because there will be a lot of overlap, and it kind of defeats the purpose of VEQT as being this all-in-one portfolio that will auto rebalance. But that being said combining VEQT and VFV isn’t too bad.
I was just thinking about US market exposure. VEQT has Canadian home bias. Right now I’m doing VEQT/VFV/NASDAQ 100 (60/20/20).
Looking at VFV mer and returns, it’s very impressive so I was attracted towards it. Since VEQT has no data to back up performance I was doing this split. What do you think?
That’s fine, but you are getting some major overlap in your etfs. VEQT has a lot of VFV in it, and VFV has lots of NASDAQ also. Nothing too bad with that though. But I would get rid of VEQT in this case and add other ETFs specific to Canada or Worldwide.