VBAL Review: 4.8/5
Are you looking for a less risky investment vehicle with a balanced allocation to bonds and stocks? Then you want to check out VBAL ETF!
No doubt! That is not an easy task considering the growing number of investment vehicles that are dominantly investing in 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. Vanguard Canada is one of the world’s leading stocks and bonds managers. There’s not a complete mention of the best ETFs in Canada without mentioning them.
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 Portfolio | Asset 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) is an all-in-one ETF portfolio managed by Vanguard Canada with 60% equity and 40% fixed-income global allocation. It 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, countries, and sectors to avoid heavy volatility. It aims to use stocks and bonds to give investors moderate income plus long-term capital growth.
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.
Key Facts About VBAL ETF
- Inception Date: January 25, 2018
- Management Fee: 0.22%
- MER: 0.24%
- Price/Earnings Ratio: 16.7x
- Price/Book Ratio: 1.9x
- Return on Equity: 11.2%
- Earnings Growth Rate: 7.6%
- 12-month Trailing Yield: 2.44%
- Listing Currency: CAD
- Distribution Yield: 1.94%
- Exchange: Toronto Stock Exchange
- Account Eligibility: RRSP, TFSA, RRIF, RESP, Non-Registered
Benefits and Drawbacks of VBAL ETF
Like other All-in-One ETFs, VBAL is characterized by several pros and cons. Here’s my unbiased evaluation:
Pros
- Stress-free portfolio management eliminates the need for frequent rebalancing.
- 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.
VBAL ETF Asset Allocation
- Stocks: 59.14%
- Bonds: 40.77%
- Short-term reserves: 0.09%
Source: www.vanguard.ca
To manage its 13,023 stocks effectively, VBAL allocates them to seven underlying ETF funds with a conservative 60/40 stock-to-bond split. The funds consist of assets from several markets worldwide across various sectors. This gives you an excellent range of market exposure.
ETF | Allocation (%) |
Vanguard US Total Market Index ETF | 26.08% |
Vanguard Canadian Aggregate Bond Index ETF | 24.38% |
Vanguard FTSE Canada All Cap Index ETF | 17.75% |
Vanguard FTSE Developed All Cap ex North America Index ETF | 10.99% |
Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged | 8.45% |
Vanguard US Aggregate Bond Index ETF CAD-hedged | 7.98% |
Vanguard FTSE Emerging Markets All Cap Index ETF | 4.37% |
Source: www.vanguard.ca
VBAL ETF Geographic Allocation
VBAL ETF offers risk management through global diversification to 50 countries. While VBAL primarily consists of North American stocks and bonds, it still has some geographical diversification. Here are the top 10:
Source: www.vanguard.ca
VBAL ETF Sector Allocation
Savvy investors look for not only geographical diversification but also diversification across sectors. VBAL ETF has a portfolio that is well-diversified across several industries. Here is the sector allocation of VBAL, with the major being Financials and the least being Telecommunication:
Source: www.vanguard.ca
VBAL ETF Return/Performance
Gauging the performance of new portfolio ETFs is tricky because they’ve been around for only a few years and launched shortly before the induced tailspin from the pandemic.
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 13.89% since inception (January 25, 2018).
That’s to say, VBAL is growing speedily compared to its competitors.
Source: www.vanguard.ca
VGRO ETF Fees
ETFs offer a good way to cut down on your fees, and All-in-One ETFs are even better. VBAL has two fees: Management fee and Management Expense Ratio (MER). These are charged as follows:
- Management Fee: 0.22%
- MER: 0.24%.
From the above, you know that VBAL has low fees compared to mutual funds and Robo-advisors, who charge up to 2% on fees. You could save much money in management fees by choosing VBAL ETF.
VBAL Stock Eligibility
Here are the seven eligible investment vehicles VBAL can be invested in:
- RRSP
- RRIF
- RESP
- TFSA
- DPSP
- RDSP
- Non-registered accounts
With these multiple options, VBAL got you covered in all your investment needs.
How to 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 investors looking for an All-in-One ETF portfolio with a balanced exposure to stocks and bonds. Investors looking for long-term capital growth and income who want a less risky, less aggressive portfolio and automatic portfolio rebalancing will also find it suitable.
There’s not a single way of buying VBAL stock. There are many ways to do that. However, my favorite means of buying All-in-One ETFs such as VBAL is through zero-commission online brokers.
Wealthsimple Trade and Questrade have become household names as the best zero-commission online brokers in Canada. 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 Canada’s first and only brokerage to boast of that offer. 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. In the case of Questrade, there are no charges on buying stocks, but $4.95 to $9.95 charges apply upon selling stocks.
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.
Feature | Rating |
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 a few areas of improvement, particularly on fees, to be equal or grow beyond its competitors.
Is VBAL ETF Safe?
VBAL ETF is not as aggressive as VGRO or VEQT; it suffers less volatility during market downturns. With a long-term mindset, you should invest in VBAL and be ready to see your portfolio move up and down the charts.
Volatility is expected from any portfolio with heavy weightings in stocks, and VBAL is no exception. VBAL is a good investment if it matches your risk tolerance and returns expectations.
Based on my 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 VBAL review. I can’t guarantee the future safety of VBAL.
VBAL ETF vs XBAL Stock
iShares Core Balanced ETF Portfolio (XBAL) is one of VBAL’s top competitors. iShare’s 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. They also have equal investment allocation of 60% to stock and 40% to bonds.
However, the two ETFs have some differences. XBAL has relatively low management fee (0.18%) and MER (0.20%) compared to VBAL relatively higher management fee (0.22%) and MER (0.24%).
Also, VBAL has a relatively lower distribution yield (1.73%) than XBAL’s somewhat higher distribution yield (1.78%).
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.
Final Thoughts on VBAL Review
From the above VBAL review, you can see why it’s a favorite investment vehicle for Canadian investors and many worldwide investors. Within just three years of existence, VBAL has performed admirably compared to its competitors.
To make this VBAL ETF 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, 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.
FAQs on VBAL Review
Is VBAL ETF a Good Investment?
Based on my 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 the Vanguard Balanced ETF Portfolio stock price?
As of October 21, 2022, Vanguard Balanced ETF Portfolio (VBAL) stock price is $25.89. However, this is subject to change from time to time.
Have more questions on VBAL stock? Kindly drop them in the comment section.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.
