Vanguard VUN ETF Review 2022: Buy The Entire U.S Market

Looking to invest in the US market without having to waste a lot of time picking stocks?

Investing in the US is very common for Canadians to avoid a home bias. The US has the most robust stock market in the world.

Let’s go over this Vanguard VUN ETF review to see if it’s the right choice for your portfolio

Our Verdict
Vanguard VUN ETF Review
9.5/10Our Score

Vanguard VUN ETF

Invest In Large-Cap US Stocks

Invest in the Vanguard VUN ETF to gain exposure to the performance of a broad US equity index that focuses on primarily large-cap stocks listed in the US.

Pros
  • A low-cost method to invest in US stocks
  • Diversifies away from the Canadian stock market
  • Uses efficient and cost-effective index sampling techniques
  • Invest across growth and value equities
Cons
  • Tech heavy

What Is Vanguard VUN ETF?

Vanguard US Total Market Index ETF (VUN) focuses primarily on stocks trading in the US stock market.

Vanguard VUN ETF currently tracks the performance of the CRSP US Total Market Index.

VUN ETF started trading on the TSX on August 30, 2013, and uses a cost-effective index management strategy to minimize costs.

VUN.TO is currently trading at close to $70.06.

Vanguard VUN Key Facts

As of July 15, 2022:

  • Ticker Symbol: VUN.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $4.978 Billion
  • MER: 0.16%
  • 12-Month Trailing Yield: 1.20%
  • Currency Traded: CAD
  • Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available

Vanguard VUN ETF MER And Fees

The fund comes with a management fee of 0.15% and a 0.16% Management Expense Ratio (MER), making it a lower-cost alternative to mutual fund products that might track similar indices.

Vanguard VUN ETF Dividend Yield

As of June 30, 2022, Vanguard VUN ETF’s dividend yield is as follows:

  • 12-month trailing yield: 1.20%
  • Distribution yield: 1.17%
  • Dividend schedule: Quarterly

The fund offers you returns through capital gains for the underlying assets in its holdings.

The dividend yield is not significant, but it comprehensively covers the MER you can expect to pay for investing in the fund.

Vanguard VUN ETF Performance And Returns

Growth of a hypothetical $10K since Vanguard VUN inception:

Showing 31 Aug 2013 – 30 Jun 2022:

Fund TypeMonth EndYTD1YR3YR5YRSince Inception
VUN (Market Price)−7.00%−20.32%−11.49%+8.52%+9.86%+ 13.06%
VUN (NAV)−6.67%−20.07%−11.17%+8.60%+9.94%+ 13.10%
Benchmark−6.77%−20.07%−11.11%+8.87%+10.28%+ 13.50%
Source: Vanguard.ca

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

What Does Vanguard VUN ETF Invest In?

Vanguard VUN ETF Portfolio Characteristics

As of 30 Jun 2022:

FundamentalsFundBenchmark
Number of Stocks4,0984,096
Median Market Cap$148.0 B$148.0 B
Price / Earnings Ratio 17.7 x17.7 x
Price / Book Ratio 3.2 x3.2 x
Return on Equity 19.6%19.6%
Earnings Growth Rate 19.6%19.6%
Source: Vanguard.ca

Vanguard VUN ETF Market capitalization

As of 30 Jun 2022:

CapitalizationFundBenchmark
Large64.02%64.33%
Medium/Large4.03%4.04%
Medium14.92%14.98%
Medium/Small6.75%6.79%
Small9.82%9.86%
Total99.54%100.00%
Source: Vanguard.ca

Vanguard VUN ETF Market Allocation

As of 30 Jun 2022:

CountryRegionFundBenchmark
United States of AmericaNorth America99.9%99.9%
OtherOther0.1%0.0%
IsraelMiddle East0.0%
CanadaNorth America0.1%
Total100.0%100.0%
Source: Vanguard.ca

Vanguard VUN ETF Sector Weighting

As of 30 Jun 2022:

SectorFund
Technology25.8%
Health Care14.3%
Consumer Discretionary13.8%
Industrials12.7%
Financials11.2%
Consumer Staples5.8%
Energy4.5%
Real Estate3.7%
Utilities3.4%
Telecommunications2.6%
Basic Materials2.1%
Total100.0%
Source: Vanguard.ca

Vanguard VUN ETF Top Holdings

As of June 20, 2022:

Holding Name% of Market ValueSector
Apple Inc.5.50%Computer Hardware
Microsoft Corp.5.03%Software
Amazon.com Inc.2.40%Diversified Retailers
Alphabet Inc. Class A1.72%Consumer Digital Services
Tesla Inc.1.55%Automobiles
Alphabet Inc. Class C1.52%Consumer Digital Services
UnitedHealth Group Inc.1.26%Health Care Management Services
Johnson & Johnson1.22%Pharmaceuticals
Berkshire Hathaway Inc. Class B1.19%Reinsurance
Facebook Inc. Class A0.96%Consumer Digital Services
Source: Vanguard.ca

Vanguard VUN ETF Region exposure

As of 30 Jun 2022:

RegionFundBenchmark
North America99.90%100.00%
Other0.10%0.00%
Total100.00%100.00%
Source: Vanguard.ca

Vanguard VUN ETF Risk and Volatility

As of: 30 Jun 2022:

Fund TypeR-SquaredBETAALPHAStandard DeviationSharpe Ratio
Fund1.000.99− 0.0215.42%0.52
Benchmark15.51%0.53
Source: Vanguard.ca

Vanguard VUN ETF Alternatives

This section of my Vanguard VUN ETF review will briefly compare it to a few funds that you could consider as alternatives to investing in VUN ETF.

Vanguard VUN ETF Vs. Vanguard VFV ETF

Vanguard VFV ETF is a fund designed to provide you with investment returns by tracking the performance of the S&P 500 Index – another broad US equity index like the US Total Market Index that VUN ETF tracks.

VFV ETF is a significantly lower-cost fund with an MER of just 0.09% compared to VUN ETF’s 0.16%.

The fund tracks the top 500 US-listed equity securities instead of the entire stock market.

VFV ETF’s top ten holdings are the same as for VUN ETF, but the narrower focus on higher-quality companies gives it an edge in its MER and returns. You could consider VFV ETF a viable alternative to VUN ETF.

Vanguard VUN ETF Vs. Vanguard VSP ETF

Vanguard VSP ETF is a fund that is designed to provide you with investment returns by tracking the performance of the S&P 500 Index, like Vanguard VFV.

However, the fund provides you with investment returns that are hedged to the Canadian dollar to reduce currency risks.

VSP ETF has the same top ten holdings as Vanguard VUN ETF but has a narrower focus on the top 500 US equity securities.

Despite a slightly higher cost than VFV ETF due to its currency hedging strategy, VSP ETF comes at a lower cost than VUN ETF, with MERs of 0.09% and 0.16%, respectively.

You could consider VSP ETF another viable alternative to VUN ETF if you want currency-hedged exposure to the US stock market.

Vanguard VUN ETF Vs. Horizons HXS ETF

Horizons HXS ETF is another fund that tracks the performance of the S&P 500 Index, providing you with investment returns based on the performance of the top 500 equity securities of publicly-traded companies in the US.

Most of the fund’s top ten holdings are similar to Vanguard VUN ETF, but it offers a narrower exposure to the top US stocks than VUN ETF.

Horizons HXS ETF is also a low-cost fund and boasts a lower MER of 0.10% compared to a 0.16% MER for VUN ETF, making it a viable alternative to consider.

How To Buy Vanguard VUN ETF In Canada

The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:

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

Conclusion

Vanguard VUN ETF invests in almost the entire US stock market, all in one neat little package.

Several other ETFs track the performance of a broad US equity market index.

Check out my breakdown of the best S&P 500 ETFs in Canada if you only want to invest in the top 500 companies in the US instead.

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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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