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 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.
Canadian ETF assets were over $200 billion at the start of 2020.
All-Equity ETF Portfolio
- Simple and effective
- Self allocates – no need to rebalance
- 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 holds $233 million in Assets Under Management (AUM) as of Feb 29, 2020
What does Vanguard VEQT Invest in?
VEQT is made up of several different Vanguard ETFs and 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 over 70% invested in Canada and the U.S, 22% outside of North America, and the remaining 7.7% in emerging markets.
VEQT Vanguard Sector Weighting
The worldwide exposure gives VEQT a heavier weighting towards financials, industrials, technology, and consumer goods and services. (Feb 29, 2020)
Vanguard VEQT MER
The VEQT Management Expense Ratio (MER) is a reasonable 0.25%.
Considering that mutual funds charge on average over 2%, and it’s easy to see why many Canadians are choosing ETFs over mutual funds.
Vanguard VEQT Dividend
As of Feb 29, 2019:
- VEQT Dividend schedule: Annually
- Equity Yield (Dividend): 3.3%
VEQT Asset Allocation
VEQT targets a 100% equity and 0% fixed income asset allocation
VEQT does not have much performance history, but there shouldn’t be many surprises here. The fund should perform accordingly to the combination of its underlying ETFs.
Vanguard VEQT Holdings
VEQT top holdings are some of the biggest stock names in Canada and U.S. VEQT holds banking, tech, oil and gas, and energy stocks in the top 10.
Vanguard VEQT vs Other Funds
VEQT vs VGRO
VGRO is Vanguard’s Growth Portfolio ETF, and is 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&P500 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.
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.