Best Vanguard All-Equity ETF Portfolio Review 2021

VEQT Stock Review: 4.0/5

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With the launch of its all-in-one ETFs, Vanguard joins the league of the best Canadian ETFs providers.

With an all-in-one ETF, you can now benefit from a low-cost, globally diversified portfolio of equities and bonds.

By so doing, you eliminate the stress involved in rebalancing your portfolio when you make contributions or when the performance of the portfolio assets changes.

All you need is to buy shares of individual ETFs or increase your funding as required.

The rest is handled by the professional managers of Vanguard, allowing you to have a hands-off investment experience.

Here I review one of the popular all-in-one ETFs of Vanguard, known as VEQT, using my personal experience.

At the end of this VEQT stock review, you should be able to learn three lessons from my experience in determining whether or not to buy VEQT.

Let’s get started.

Vanguard Canada All-in-One ETFs: VEQT Stock Overview

VEQT Stock Review

Launched on January 29, 2019, VEQT is the product of Vanguard Canada, which is one of the popular all-in-one ETFs’ providers in Canada.

It is also one of the world’s stocks and fixed income managers, managing more than $6 trillion assets.

Vanguard Canada all-in-one ETFs are revolutionary products that simplify the investment process by providing long-term capital growth through bonds and stocks.

However, of all the all-in-one ETFs of Vanguard Canada, only VEQT has 100% equity allocation, making it the most aggressive portfolio.

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

Source: Vanguard.ca

What is VEQT?

Vanguard ETF is one of the all-in-ones ETFs provided and managed by Vanguard Canada, which has a 100% equity allocation, making it more aggressive than other ETFs.

Stocks in aggressive portfolios usually have higher exposure and more fluctuations compared to balanced or growth portfolios.

With its medium risk indicator, investors of VEQT needs to have above-average risk tolerance in addition to long-term investment objective.

As a fund of funds, VEQT stock holds many ETFs in order to provide investors with longer-term capital growth through equity investment.

VEQT Investment Objective

The investment objective of Vanguard All-Equity ETF (VEQT) is to invest mainly in equity securities in order to provide investors with long-term capital growth.

This may be achieved directly or indirectly by investing in single or multiple ETFs or other investment funds managed by either a manager or an affiliate.

What ETFs are in VEQT?

As of April 30, 2021, the following are the four ETFs that makeup VEQT stock and their allocation:

ETF Allocation
Vanguard US Total Market Index ETF41.70%
Vanguard FTSE Canada All Cap Index ETF30.20%

 

Vanguard FTSE Developed All Cap ex North America Index ETF20.30%
Vanguard FTSE Emerging Markets All Cap Index ETF7.8%

Source: Vanguard.ca

Who Can Buy VEQT Stock?

Virtually every investor in Canada can invest in VEQT ETF. However, this all-in-one ETF portfolio is more suitable for:

  • Investors looking for a 100% equity all-in-one portfolio.
  • Those looking for global diversification.
  • People with longer-term investment objectives.
  • Investors with above-average tolerance.

Are you one of these? Continue reading to find out the three practical ways you can determine if you truly qualify to buy VEQT stock or not.

Can Investing in VEQT ETF Make You Rich?

There’s no guarantee investing in VEQT ETF will make you rich. This is despite the fact that its past performance is admirable.

Remember: past performance doesn’t guarantee future performance.

Also, even though VEQT stock is a low-cost ETF diversified portfolio… how much you earn depends on your investment goal and the market volatility.

Is VEQT Stock High Risk?

VEQT stock is not high risk. The ETF is rated “medium” on risk characteristics by iShares.

This implies that the VEQT ETF is not suitable for investors with a below-average risk profile.

If you’re comfortable with significant swings in your portfolio value, then you can find the VEQT stock investable.

Can You Lose All Your Money in VEQT Stock?

It depends. You can gain or lose in VEQT Stock.

When you invest in the VEQT ETF, you share in the gains and losses of the underlying assets.

If those assets overall increase in value, individual shares will typically rise as well, and you will earn a profit.

You will earn profits if the individual shares and the overall value of those assets increases.

However, if the overall value of the VEQT ETF decreases, every unit within the fund will decrease in value. Therefore you will suffer a loss.

VEQT Stock Key Facts

Here are the interesting facts about VEQT ETF as of April 30, 2021:

  • Net assets: $978 million
  • Management expense ratio (MER): 0.25%
  • Management fee: 0.22%
  • Return on Equity: 13.7%
  • Price/book ratio: 2.4x
  • Price/earnings ratio: 20.7x
  • Number of stocks: 13,023
  • Earnings growth rate: 13.0%
  • Exchange: Toronto Stock Exchange
  • Ticker symbol: VEQT

VEQT Review: Pros and Cons

Like other all-in-one ETFs, VEQT ETF also has pros and cons. Here are the major ones.

Pros

  • Instant international diversification.
  • Low management fees (compared to mutual funds).
  • Easy to use and purchase.
  • Rebalance-free.
  • Hands-free portfolio management.

Cons

  • More volatility (with 100% in equities).
  • Limited asset allocation.
  • Slightly higher fees compared to another all-in-one ETFs.

TSE: VEQT Stock Asset Allocation

As of the time of writing this review, VEQT has the following asset allocation:

  • Stock: 99.96%
  • Short-term reserves: 0.04%

As you can see, VEQT is not completely made up of 100% equities. Instead, it’s rollover to 100% with the minor (0.04%) allocation to short-term reserves.

VEQT Stock Holdings

As of April 30, 2021, VEQT holds a total of 13,023 stocks. To manage these stocks entirely, VEQT allocates them to four underlying Vanguard funds as follows:

ETF  Weight (%)
Vanguard US Total Market Index ETF41.70%
Vanguard FTSE Canada All Cap Index ETF30.20%
Vanguard FTSE Developed All Cap ex North America Index ETF20.30%
Vanguard FTSE Emerging Markets All Cap Index ETF7.80%

Source: Vanguard.ca

TSE: VEQT Geographic Allocation

Among the 50 different markets VEQT operates, here are the 10 countries with the major allocation as of April 30, 2021:

CountryAllocation (%)
United States41.6%
Canada29.9%
Japan4.7%
China3.1%
United Kingdom2.9%
France1.9%
Germany1.7%
Switzerland1.6%
Australia1.5%
Taiwan1.4%

Source: Vanguard.ca

VEQT Sector Allocation

Here is the sector allocation of VEQT as of April 30, 2021:

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%
Other0.0%

Source: Vanguard.ca

VEQT Stock 10 Top Holdings

As of April 30, 2021, VEQT has a total of 12844. Here are the top 10:

Royal Bank of Canada (RY)1.91152%
Apple Inc. (AAPL)1.90241%
Shopify Inc. Class A(SHOP)1.84052%
Microsoft Corp.(MSFT)1.82169%
Toronto-Dominion Bank(TD)1.74769%
Amazon.com Inc.(AMZN)1.42150%
Enbridge Inc.(ENB)1.09775%
Bank of Nova Scotia(BNS)1.08271%
Canadian National Railway Co.(CNR)1.07685%
Brookfield Asset Management Inc. Class A(BAM.A)0.85459%

Source: Vanguard.ca

VEQT Returns/Performance

Founded in 2019, VEQT is a relatively new ETF in comparison to some other common index ETFs.

As a result, VEQT has limited historical information for in-depth performance analysis.

VEQT year-end NAV calendar returns as of December 31, 2020, is 11.29$ since inception – according to its market price.

VEQT Returns

Source: Vanguard.ca

Note: Past ETFs performance does not guarantee future success.

TSE: VEQT Stock Distributions

VEQT Distribution History

Source: Vanguard.ca

Unlike other stocks and several index ETFs, VEQT pays annual dividends.

Each January, Vanguard Canada reports about the ETFs’ capital return.

VEQT Stock Fees

The following constitutes the fees of Vanguard All-Equity ETF Portfolio (VEQT), which is low compared to the fees of mutual funds in Canada:

  • Management fee:22%
  • MER: 0.25%

ETFs such as VEQT save you money by managing your portfolio through a discount broker with zero commission.

You will learn about how to buy VEQT stock through a zero-commission broker in the course of this review.

My VEQT Stock 5-Star Rating

Here are the factors that I use to determine the 4.0/5-star rating of this VEQT stock review:

FeatureRating
Management Fee:**** (4.5)
Management Expense Ratio (MER):*****
Asset Allocation****
Equity Yield:****
Ease of Use**** *

Is VEQT ETF Right for You?: 3 Lessons from My Personal Experience

By now, you should be wondering whether or not VEQT ETF is a good fit for you. But you don’t have to worry; you can determine that from my experience.

Here I summarize the three major steps I follow when deciding whether or not to buy my first VEQT stock:

  • Investment Objective

Before buying my VEQT, I asked myself: “why am I investing in the first place?” This led me to list my investment needs on paper based on my income.

After listing all my needs, I decided to look for an investment vehicle that suits them, which landed me in VEQT stock.

The truth is that without identifying an investment vehicle that suits your investment objective, you may be sacrificing your time and money for vanity.

  • Risk Tolerance

The idea of buying VEQT didn’t come as a surprise or accidentally to me. It was conscious and calculated based on my investment objective and situation.

So there’s was no surprise when I discovered that VEQT has a medium risk indicator. Besides, it’s a 100% equity portfolio. To be honest, I was even expecting more than that risk rating.

But the story could’ve been different if my risk tolerance was below average to hold a risky portfolio such as VEQT.

  • Time Horizon

One thing I was curious about when evaluating VEQT ETF is the duration of my investment.

How long is it going to take to significant yield? 1 year? 5 years? Or 10 years?

I was curious to know precisely how long will take my VEQT portfolio to yield result.

But the answer was already an open secret. Most all-in-one ETFs have a long-term horizon (like 10 years). VEQT is not an exception.

Again, I was equal to that. So What next? Buying my first VEQT stock. And that’s how I become a living witness of the enduring blessings of VEQT to investors like me.

Moral of My VEQT Story

  • Determine your investment objective and ensure that it aligns with investment vehicle
  • Consider your risk tolerance and ensure it’s not below-average or below the portfolio risk indicator.
  • Know how long you want to invest your money without sacrificing your current lifestyle.

How Do I Get a VEQT?

There are many ways you can get VEQT stock in Canada.

However, the popular means Canadians use to get VEQT ETF is through Wealthsimple Trade and Questrade.

In the following section of this VEQT stock review, you will learn in detail how to get a VEQT ETF through Wealthsimple Trade or Questrade.

How to Buy VEQT Stock

If you’re convinced that VEQT is also perfect for you after reading my story, you can take the next step and buy your VEQT stock.

But how do you go about it? It’s not as difficult as it may seem.

There are two major ways of buying VEQT in Canada: DIY and Robo-advisor.

To Do-it-Yourself, open an account with any no-commission online brokerages in Canada, such as Wealthsimple Trade or Questrade.

  • Wealthsimple Trade

You are entitled to trade thousands of stocks and bonds with no commissions through Wealthsimple Trade.

$25 welcome bonus awaits you when you make a $100 initial deposit in equity.

To get started, open a Wealthsimple Trade account.

  • Questrade

Questrade also gives you the opportunity to purchase ZGRO ETF for free (but  when sell ETF,  $4.95 – $9.95 charges apply.)

To get started, select and open a Questrade account that suits your need.

  • Robo-Advisor

A Robo-advisor is your go-to for hands-on and low-cost methods of managing your ETF portfolio.

A Robo-advisor can help you make your portfolio rebalance automatically when you make a deposit or when your portfolio veers off course from its target allocation.

The fact is that while Robo-advisor’s fees may be higher than those of zero-commission online brokerages, you can’t compare the service.

How Do I Reinvest Dividends in Vanguard ETF?

Reinvesting dividends is another way to make investing automatic and add to your investment’s growth.

The Vanguard’s dividend reinvestment program allows you to reinvest your dividends without fees or commissions.

By reinvesting your dividends, you’re automating your investment and boosting the growth of your portfolio.

Thankfully, reinvesting your dividends in Vanguard ETF is so simple. All you need is to choose the “reinvest” option when you buy ETF shares.

VEQT vs XEQT: Which is Better VEQT or XEQT?

iShares All-Equity ETF Portfolio (XEQT) is of the all-in-one ETFs managed by Black Rock. It was launched on August 7, 2019.

Just like VEQT ETF, XEQT also has a 100% asset allocation on stocks with the aim of providing investors with longer-term capital growth.

On the other hand, VEQT has a relatively higher management fee (0.22%) and MER (0.25%) compared to XEQT’s relatively low management fee (0.18%) and  MER (0.20%).

Unlike VEQT, which has a medium risk indicator, XEQT has a low-to-medium risk indicator.

As you can see, both VEQT vs XEQT are great ETFs that appeal to different investors.

So the answer to the question: “which is better VEQT or XEQT” depends on your needs.

If you’re looking for an ETF portfolio with a low-medium risk indicator and low fees and MER, XEQT is better.

But if you’re looking for a medium-risk ETF portfolio without regard to high fees and MER, then VEQT could better for you.

However, before making a final decision on VEQT vs XEQT, I recommend you read this XEQT Review as well.

VEQT vs VGRO: Should I Buy VGRO or VEQT Stock?

Vanguard’s Growth Portfolio (VGRO) is a consecutive portfolio that consists of 80% equity and 20% fixed income.

As you can see, VGRO is not 100% made up of equities. In contrast, VEQT is made up of 100%.

So you should buy VGRO if you’re looking for a portfolio with an 80/20 slit across equities and fixed income.

On the other hand, you should buy VEQT stock if you’re looking for a portfolio with 100% equities.

Verdict on VEQT Stock Review

While VEQT is a new exchange-traded fund in the market, it has performed admirably since its launch.

By investing in a single VEQT ETF, you gain immediate diversification across different markets and different sectors.

But remember, VEQT stock is a pure-equity portfolio. Even though it has the potential of yielding decent returns, it can be riskier than growth and balanced portfolios.

That’s why I narrated my VEQT story to make you realize that before purchasing this ETF, you need to identify your investment objective, risk tolerance and time horizon.

By so doing, you will able to determine whether VEQT is suitable for you. If not, you should consider XEQT or other all-in-one  ETFs.

VEQT ETF FAQ’s

Is VEQT Stock a Good Investment?

Yes. With admirable performance since inception, VEQT is a good investment for any investor with above-average risk tolerance looking for a 100% stock portfolio without having to worry about rebalancing.

How Risky is VEQT?

VEQT ETF has a medium risk indicator. This implies that you need to have above-average risk tolerance to trade safely with this portfolio.

Which is the Best, VEQT or XEQT?

Both VEQT and XEQT are great all-in-one ETFs that share the same investment objective and asset allocation.

However, XEQT has a relatively low management fee and MER compared to VEQT. Also, XEQT has a low-to-medium risk indicator, while VEQT has a medium risk indicator. You’re in the right position to tell which is the best for you.

Does VEQT Have Dividends?

Yes, VEQT stock has 3.3% dividends that are distributed or scheduled annually.

What Dividend Does VEQT Pay?

VEQT stock pays equity dividends which are 3.3% as of April 30, 2020.

If you have more questions on VEQT stock, kindly drop them in the comment section.

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