VBAL Review: Vanguard Balanced ETF Portfolio Explained

VBAL Review: 4.8/5

Are you looking for an investment vehicle that is less risky and has a balanced allocation to bonds and stocks? Then you want to check out VBLA ETF!

No doubt! That is not an easy task considering the growing number of investment vehicles that are dominantly investing in either stocks or bonds, exposing you to higher risk.

But I have good news for you. There are now balanced ETF portfolios that limit your investment risk by investing heavily in stocks and bonds.

One of the leading balanced ETF portfolios in the industry is Vanguard Balanced ETF Portfolio (VBAL).

Whether you’re looking for a passive balanced portfolio or a less risky and aggressive portfolio to make the most of your money, VBAL got you covered.

Based on my personal experience, I present my unbiased VBAL review covering everything you need to know about it and the key things you can learn from my experience.

Are you ready to join me on this journey? Great!

1.2.3. Go!

Vanguard Balanced ETF Portfolio (VBAL) Overview

Vanguard Balanced ETF Portfolio (VBAL) is one of the all-in-one ETFs of Vanguard Canada that has become popular in Canada and beyond because of its performance since its inception.

As one of the world’s leading stocks and bonds managers, there’s not a complete mention of the best ETFs in Canada without mentioning Vanguard Canada ETFs.

Launched on January 25, 2018, VBAL is a growing wave of Vanguard’s all-in-one ETFs that help investors in Canada and other parts of the world make the most of their money.

As one of the all-in-one ETFs of Vanguard Canada, only VBAL and VCNS have an equal allocation on stocks and bonds.

Vanguard  ETF PortfolioAsset Allocation (%)
Vanguard Growth ETF Portfolio (VGRO) 80% equity and 20% fixed income

 

Vanguard Conservative Income ETF Portfolio (VCIP)80% fixed income and 20% equity

 

Vanguard Conservative ETF Portfolio (VCNS)

 

60% fixed income and 40% equity
Vanguard Balanced ETF Portfolio (VBAL)60% equity and 40% fixed income
Vanguard All-Equity ETF Portfolio (VEQT)100% equity

What is VBAL ETF?

Vanguard Balanced ETF Portfolio (VBAL) refers to an all-in-one ETF portfolio managed by Vanguard Canada with 60% equity and 40$ fixed income global allocation.

This ETF is one of the all-in-one ETFs of Vanguard Canada that seeks to provide long-term capital growth and income to investors through stock and bond investment.

VBAL stock allows investors to diversify their portfolios across different securities, different countries and different sectors toward avoiding heavy volatility.

As you continue reading, you will learn more about what VBAL stock entails and how it compares, helping you make an informed decision.

VBAL ETF Objective and Strategy

This ETF portfolio aims to use stocks and bonds to give investors moderate income plus long-term capital growth.

In order to achieve its investment objective, VBAL strives to invest 60% in stocks and 40% in bonds.

However, from time to time, the portfolio allocation may be reconstituted and rebalanced according to the discretion of Vanguard Canada’s sub-advisor.

VBAL Stock Key Features

As of May 25, 2021, Vanguard Balanced ETF Portfolio (VBAL) has the following key features:

  • Total Net Assets: $1,711 million
  • Management Fee:22%
  • MER:25%
  • Number of Stocks: 13,023
  • Number of Bonds: 17,543
  • Price/earnings Ratio:7x
  • Price/Book Ratio: 4x
  • Return on Equity:7%
  • Earnings Growth Rate:0%
  • Equity Yield (Dividend): 9%
  • Exchange: Toronto Stock Exchange

Keep reading to have a better understanding of the above VBAL stock features.

Is VBAL ETF Safe?

Based on my personal experience, VBAL is one of the safest stocks in the industry because it is less risky and less aggressive.

Note: This information is based on my personal experience and the findings of this review. I can’t guarantee the future safety of VBAL.

VBAL Stock Pros and Cons

Like other all-in-one ETFs, VBAL is characterized by a number of pros and cons. Here’s my unbiased evaluation:

Pros

  • Stress-free portfolio management.
  • Global diversification.
  • Easy to buy and sell.
  • Low fees compared to high mutual funds and Robo-advisors fees.
  • Not too risky or aggressive.

Cons

  • Trading fees can increase in the long run.
  • Tax charges may apply when updating your risk characteristics.
  • Slightly higher fees compared to competitors.

Who Can Buy VBAL Stock?

VBAL is for every investor. However, not every investor is for VBAL.

Having used VBAL for over a year now, I can confirm that VBAL is more suitable for the following investors:

  • Those looking for an all-in-one ETF portfolio with a balanced exposure to stocks and bonds.
  • Investors that are looking for long-term capital growth and income.
  • Those who want a less risky and less aggressive portfolio.
  • Investors looking for automatic portfolio rebalancing.

Whether you’re one of the above or not, I have something to tell you in the course of this VBAL review.

Let’s move on!

VBAL ETF Asset Allocation

As a balanced ETF portfolio, VBAL has the following asset allocation as of April 30, 2021:

  • Stocks: 60.23 %
  • Bonds: 39.72 %
  • Short-term reserves: 0.05 %

To manage its 13,023 stocks effectively, VBAL allocates them to seven underlying ETF funds as follows:

ETFAllocation (%)
Vanguard US Total Market Index ETF25.0%
Vanguard Canadian Aggregate Bond Index ETF23.4%
Vanguard FTSE Canada All Cap Index ETF18.2%
Vanguard FTSE Developed All Cap ex North America Index ETF12.2%
Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged9.2%
Vanguard US Aggregate Bond Index ETF CAD-hedged7.2%
Vanguard FTSE Emerging Markets All Cap Index ETF4.8%

Source: www.vanguard.ca

VBAL ETF Geographic Allocation

Among the 50 countries VBAL has exposure to, here are the top 10:

CountryAllocation (%)
United States41.5%
Canada29.9%
Japan4.7%
China3.2%
United Kingdom2.9%
France1.9%
Germany1.7%
Switzerland1.6%
Australia1.5%
Taiwan1.4%

Source: www.vanguard.ca

VBAL ETF Sector Allocation

Here is the sector allocation of VBAL, with the major being financial and the least being real estate:

SectorWeighting (%)
Financials19.7%
Technology17.9%
Consumer Discretionary13.1%
Industrials12.9%
Health Care8.4%
Basic Materials6.4%
Energy6.2%
Consumer Staples4.8%
Utilities3.8%
Telecommunications3.6%
Real Estate3.2%

Source: www.vanguard.ca

VBAL ETF Chart on Return/Performance

As a 3-year old ETF, VBAL has had 17.44% returns in 1 year,  27.01% returns in three years and cumulative returns of 25.02% since inception (January 25, 2018).

That’s to say, VBAL is growing speedily compared to its competitors.

VBAL Stock Returns

Source: www.vanguard.ca

VBAL Stock Dividends

As of April 30, 2021, VBAL has the following dividend profile:

  • 12-month trailing yield:84%
  • Distribution yield: 1.68%
  • Dividend frequency: Quarterly

Here is the top dividend distribution history of VBAL:

VBAL Stock Distribution History

Source: www.vanguard.ca

VGRO ETF Fees

VGRO has two fees: management fee and management expense ratio (MER). These are charged as follows:

  • Management Fee: 0.22%
  • MER: 0.25%.

From the above, you know that VBAL has low fees compared to mutual funds and Robo-advisors, who charge up to 2% on fees.

VBAL Stock Eligibility

Here are the seven eligible investment vehicles VBAL can be invested in:

  • RRSP
  • RRIF
  • RESP
  • TFSA
  • DPSP
  • RDSP
  • Non-reg

With these multiple options, VBAL got you covered in all your investment needs.

VBAL ETF Price

As of May 25, 2021, VBAL’s minimum price is $29.3. However, this is subject to change due to constant fluctuations in the stock market.

Here are VBAL historical prices showing the fluctuation of prices in the month of May alone:

VBAL Stock Historical Prices

Source: www.vanguard.ca

How to Buy VBAL ETF?

There’s not a single way of buying VBAL stock. There are many ways to do that.

However, my favourite means of buying all-in-one ETFs such as VBAL is through zero-commission online brokers.

In Canada, Wealthsimple Trade and Questrade have become household names as the best zero-commission online brokers.

This is because, as in the case of Wealthsimple Trade, you are not charged any fee on any trade – be it on stocks or bonds.

Wealthsimple Trade is the first and the only brokerage to boast on that offer in Canada.

In the case of Questrade, there are no charges on buying stocks, but $4.95 to $9.95 charges apply upon selling stocks.

Wealthsimple Trade vs Questrade: which should you choose? The choice is yours. You can’t make a wrong choice with any of them.

I enjoy Wealthsimple Trade because of zero commission on all trades.

If you want to use Wealthsimple Trade, click here to open your Wealthsimple Trade account.

But if you decide to go with Questrade, that’s not bad. Click here to open your Questrade account.

VBAL Review: My 5-Star Rating

My 4.8 out of a 5-star rating of VBAL was determined by my personal experience and evaluation of the following features.

FeatureRating
VBAL Price*****
Management Fee**** (4.9)
Management Expense Ratio (MER)**** (4.8)
Asset Allocation*****
Dividend Yield*****

 

As you can see, there’s no reason for me to rate this VBAL review negatively. Nevertheless, VBAL has few areas of improvement, particularly on fees, to be equal or grow beyond its competitors.

VBAL ETF vs XBAL Stock

It’s not enough to draw a conclusion about VBAL by just reading the above reviews.

Having a competitive view of any ETF is key to making the best and cost-effective investment decision.

Here I present to you one of VBAL top competitors, known as iShares Core Balanced ETF Portfolio (XBAL).

iShare XBAL has some similarities with Vanguard Canada’s VBAL in many ways.

For example, both ETFs share a similar investment objective of providing long-term capital growth and income to investors by investing heavily in stocks and bonds.

To this end, both ETFs have equal investment allocation of 60% to stock and 40% to bonds.

However, the two ETFs have some pathing grounds.

XBAL has relatively low management fee (0.18%) and MER (0.20%) compared to VBAL relatively higher management fee (0.22%) and MER (0.25%).

Also, as of the time of writing this review, VBAL has a relatively lower distribution yield (1.68%) compared to XBAL’s relatively higher distribution yield (1.78%).

Additionally, the cumulative returns of VBAL as of the time of writing this review is 25.02% since inception. On the other hand, XBAL has a cumulative return of 107.70% since inception.

However, since XBAL was established in 2007, it’s not fair to compare its cumulative return on the same scale with VBAL that was launched in 2018.

Interestingly, VBAL had 27.01% returns in the last three years, whereas XBAL had 30.22% returns in the previous three years. The difference is just 3.21%.

You can see that VBAL stock is growing at its own pace, and over time, it will get there or exceed the current level of comparison.

Overall, both ETFs are great by what they offer, and you can’t make the wrong choice investing with any of them due to their low-medium risk indicator.

How to Choose Between VBAL vs XBAL?: 2 Practical Takeaways from My Experience

The truth is, you have the final say when it comes to choosing between VBAL vs XBAL.

But as someone that has used VBAL for more than a year now, there are two things I think you can learn from my experience. These are:

1. Current Performance vs Future Performance

The first thing I learned in investing in VBAL is that some things that glitter are gold.

That’s to say; current ETF performance may indicate future performance.

Although to be on the safer side, investors are often advised not to judge future ETF performance with current performance.

But I took the risk. Guess what? The result was positive.

Knowing fully that this is a new ETF in the market with a cumulative return of 5.76% in January 2020, I invested in VBAL in January 2020, confident that it will yield higher returns in the long run.

I’m not a prophet, but today, VBAL is now yielding 27.01% cumulative returns. You can see how my money is growing like grass!

The truth is, many investors are taking a big gamble by assuming the current performance of ETFs represents their future.

But that should not always be the case. Investors can predict the performance of an ETF once they read through its portfolio characteristics and distribution history.

2. Current Fees vs Future Fees

Another thing I learned when using VBAL is that it’s not enough for one to settle for an all-in-one ETF by considering its current low fees.

Without using a zero-commission online brokerage, your fees can be more than the fees of mutual funds and Robo-advisors in the long run.

I was not fortunate to know about zero-commission brokers (such as Wealthsimple Trade) early.

But now, I can tell the difference between when I was using a zero-commission online broker and when I was not.

Moral of My VBAL Stock Story

  • Don’t be discouraged by the current return of an ETF in making an investment decision. As with any investment, you have to take the risk of anticipating a higher return.
  • All the current fees of all-in-one ETFs (whether VBAL or XBAL) may add up in the long run once you’re not trading through a zero-commission online broker such as Wealthsimple Trade.

Final Verdict on VBAL ETF

From the above VBAL review, you can see why it’s a favourite investment vehicle not only for Canadian investors but for many investors around the world.

Within just three years of existence, VBAL has performed admirably compared to its competitors.

In my attempt to make this review unbiased, I highlighted the major characteristics of both VBAL and XBAL to help you make an informed decision.

Even though XBAL tends to have the top characteristics at the moment, but from my story, you have learned not to give up on any ETF because of its current performance.

Instead, you should focus on the portfolio characteristics and invest through a zero-commission online broker.

By doing so, you will be able to make a cost-effective decision in the long run.

Common VBAL ETF FAQ’s

Is VBAL ETF a Good Investment?

Based on my personal experience, VBAL is a good investment for those looking for long-term capital growth and income with minimum risk.

Is VBAL ETF Risky

Like any other investment vehicle, VBAL stock is not immune to risk.

However, VBAL is less risky and less aggressive because of its balanced allocation of stocks and bonds. This makes it suitable for both novice and experienced investors.

However, to trade VBAL safely, you need to be comfortable with market fluctuations due to its heavy stock allocation.

What is the Vanguard Balanced ETF Portfolio stock symbol?

The symbol of the Vanguard Balanced ETF Portfolio used to trade on Toronto Stock Exchange is VBAL.

What is Vanguard Balanced ETF Portfolio stock price?

As of May 25, 2021, Vanguard Balanced ETF Portfolio (VBAL) stock price is $29.3. However, this is subject to change from time to time.

Have more questions on VBAL stock? Kindly drop them in the comment section.

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