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 all-in-one 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.
Our Verdict
9
All-Equity ETF Portfolio
A 100% equity ETF portfolio for Canadians that invests in worldwide assets.
Buy VEQT For Free With Wealthsimple
Pros
- Simple and effective
- Low MER
- Easily accessible
- Worldwide exposure
Cons
- Home bias
- Slightly higher fees than competitors
Table of Contents show
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 is currently trading close to a price of $37.59.
VEQT Key Facts
As of October 11, 2023:
- Ticker Symbol:VEQT.TO
- Exchange:Toronto Stock Exchange
- Assets Under Management:$2.87 Billion
- MER:0.24%
- 12-Month Trailing Yield: 1.95%
- Currency Traded: CAD
- Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available
Vanguard VEQT MER
The VEQT Management Expense Ratio (MER) is a reasonable 0.24%.
Considering that mutual funds fees, on average, are about 2% per year, it’s easy to see why many Canadians are choosing ETFs over mutual funds.
Vanguard VEQT Dividend
As of September 20, 2023:
- 12-month trailing yield: 1.95%
- Distribution yield: 1.95%
- Dividend schedule: Annually
VEQT Performance
VEQT does not have much performance history since it started in 2019, but there shouldn’t be many surprises here. The fund should perform accordingly to the combination of its underlying ETFs:
Showing 31 Jan 2019 – 30 Sep 2023
| Fund Type | Month End | YTD | 1YR | 3YR | Since Inception |
|---|---|---|---|---|---|
| VEQT (Market Price) | −3.76% | +7.69% | +15.58% | +8.09% | +8.65% |
| VEQT (NAV) | −3.71% | +7.87% | +15.57% | +8.13% | +8.65% |
Go to the Vanguard website for real-time performance numbers of VEQT.
What does Vanguard VEQT Invest in?
VEQT comprises of several different Vanguard ETFs and is 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 about 73.95% invested in Canada and the U.S., 18.57% outside of North America, and the remaining 7.48% in emerging markets.
As of Aug 31, 2023:
| Fund | |
|---|---|
| U.S. Total Market Index ETF | 44.33% |
| FTSE Canada All Cap Index ETF | 29.63% |
| FTSE Developed All Cap ex North America Index ETF | 18.95% |
| FTSE Emerging Markets All Cap Index ETF | 7.09% |
VEQT Market allocation
Here is the country and region that VEQT invests in; it is quite comprehensive:
As of Aug 31, 2023:
| Country | Region | Fund |
|---|---|---|
| United States of America | North America | 44.4% |
| Canada | North America | 29.7% |
| Japan | Pacific | 4.5% |
| United Kingdom | Europe | 2.8% |
| China | Emerging Markets | 2.2% |
| France | Europe | 1.9% |
| Switzerland | Europe | 1.6% |
| Germany | Europe | 1.4% |
| Australia | Pacific | 1.4% |
| India | Emerging Markets | 1.3% |
| Total | 91.2% |
VEQT Portfolio Characteristics
Here are some key ratios and statistics for VEQT’s stocks and bonds.
As of Aug 31, 2023:
Stocks
| Fundamentals | Fund |
|---|---|
| Number of Stocks | 13,626 |
| Median Market Cap | $74.9 B |
| Price / Earnings Ratio | 16.5 x |
| Price / Book Ratio | 2.2 x |
| Return on Equity | 14.3% |
| Earnings Growth Rate | 13.9% |
VEQT Market Capitalization
VEQT invests mostly in large-cap companies, but it is diverse in its holdings.
As of Aug 31, 2023:
| Capitalization | Fund |
|---|---|
| Large | 79.95% |
| Medium/Large | 3.37% |
| Medium | 8.04% |
| Medium/Small | 4.09% |
| Small | 4.52% |
| Total | 99.97% |
VEQT Vanguard Sector Weighting
The worldwide exposure gives VEQT a heavier weighting towards financials, technology, and industrials.
As of Aug 31, 2023:
| Sector | Fund |
|---|---|
| Technology | 18.99% |
| Financials | 18.69% |
| Industrials | 13.0% |
| Consumer Discretionary | 12.05% |
| Energy | 8.54% |
| Health Care | 8.25% |
| Basic Materials | 6.19% |
| Consumer Staples | 4.92% |
| Utilities | 3.58% |
| Telecommunications | 3.03% |
| Real Estate | 2.78% |
| Other | 0.00% |
| Total | 100.00% |
VEQT Asset Allocation
VEQT targets a 100% equity and 0% fixed-income asset allocation. Because of this, unless you have a very high-risk tolerance, it is suggested to combine this with something like a bond ETF in order to satisfy your risk requirements.
As of Aug 31, 2023:
| Stocks | Bonds | Short-term Reserves |
| 99.96% | 0.00% | 0.04% |
Vanguard VEQT Holdings
VEQT top holdings are some of the biggest stock names in Canada and America. VEQT holds banking, tech, oil and gas, and energy stocks, plus many others.
As of Aug 31, 2022:
| Holding Name | % of Market Value | Sector |
|---|---|---|
| Apple Inc. | 2.82% | Computer Hardware |
| Microsoft Corp. | 2.45% | Software |
| Royal Bank of Canada | 1.8% | Banks |
| Toronto-Dominion Bank | 1.6% | Banks |
| Amazon.com Inc. | 1.21% | Diversified Retailers |
| NVIDIA Corp. | 1.16% | Semiconductors |
| Shopify Inc. | 1.09% | Consumer Digital Services |
| Canadian Pacific Kansas City Ltd. | 1.06% | Railroads |
| Enbridge Inc. | 1.02% | Pipelines |
| Canadian Natural Resources Ltd. | 1.01% | Oil: Crude Producers |
Risk Mitigation:
For investors concerned about the inherent risks associated with an all-equity fund, it’s advisable to pair VEQT with fixed-income assets. By incorporating bonds or bond ETFs, investors can create a buffer against potential downturns in the stock market, offering a more balanced overall portfolio.
Vanguard VEQT vs Other Funds
VEQT vs VGRO
VGRO is Vanguard’s Growth Portfolio ETF and 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
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.
How to buy vanguard vEQT eTF in Canada
You can purchase ETFs in Canada through most Canadian brokerage platforms that offer stock and ETF trading. My top choices are Wealthsimple Trade and Questrade.
| Image | Product Title | Features | Price |
|---|---|---|---|
Editor's Choice | Wealthsimple Trade |
| Get $25 Signup Bonus |
Reliable Pick | Questrade |
| Get $50 Free Stock Trades |
To learn more, check out my full breakdown of thebest trading platforms in Canada here.
Conclusion
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.
Learn about all the best all-in-one ETF portfolios in Canada here.
