In this post, we’ll review the Vanguard All-Equity ETF Portfolio (VEQT), a growth-focused ETF that invests 100% in equities. We’ll compare VEQT with other popular all-in-one ETFs like HGRO and XEQT, and explain why VEQT stands out as a versatile and smart choice for a variety of investors and accounts.
1. Simplicity and Broad Diversification
One of the major reasons why many Canadians opt for ETFs is their low management fees and built-in diversification. VEQT offers exposure to a globally diversified portfolio of stocks with just one purchase. This means investors are not only investing in Canadian equities but also gaining exposure to U.S., European, and emerging markets, all in one ETF. For beginner investors, this is ideal because it removes the complexity of selecting multiple funds or individual stocks.
2. No Need to Rebalance
Unlike building a portfolio with multiple ETFs, VEQT manages the rebalancing for you. This is perfect for investors who want a “set it and forget it” approach. The ETF provider ensures that the allocations between Canadian, U.S., and international stocks stay aligned with the fund’s long-term goals, freeing investors from the task of periodic rebalancing. This is particularly appealing for new investors who may not be familiar with when or how to rebalance their portfolio.
3. Great for Different Account Types
VEQT is flexible and can fit into various types of investment accounts, whether it’s a RRSP, TFSA, or a taxable account. In a TFSA, VEQT’s growth potential is fully tax-sheltered, which can help maximize gains over the long term. In a RRSP, its global diversification offers growth opportunities that can be crucial for long-term retirement savings. And even in a non-registered account, VEQT’s simplicity and diversification reduce the headache of managing multiple tax forms or tracking different investments.
4. Perfect for Different Risk Tolerances
While VEQT is classified as a growth ETF, there are other all-in-one ETFs designed for different risk tolerances. For example:
Conservative ETFs: focus more on bonds and fixed-income assets, suitable for risk-averse investors.
Balanced ETFs: split between equities and bonds, ideal for moderate risk takers.
Growth ETFs (like VEQT): invest entirely in equities, offering higher risk and potentially higher returns, making it a solid choice for younger investors or those with a long investment horizon.
5. A Safe Option for Beginners
For new investors, picking individual stocks or ETFs can be intimidating, especially when it comes to rebalancing and managing a portfolio. VEQT simplifies this process, offering a one-stop solution with global equity exposure. Its low-cost structure and automatic rebalancing make it a safe, hands-off option for beginners looking to build wealth over time without the stress of active portfolio management.
In summary, all-in-one ETFs like VEQT are designed for convenience, diversification, and growth. Whether you’re new to investing, looking for a long-term strategy, or simply prefer a hands-off approach, VEQT can meet your needs.
VEQT Review: price and graph
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VEQT: Fund’s objective
Vanguard All-Equity ETF Portfolio seeks to provide long-term capital growth by investing primarily in equity securities.
This ETF is suited for investors:
-Medium to high-risk tolerance investors with long term horizon;
-Investors who seek an all-in-one solution. VEQT is diversified across various economic sectors and geographic markets.
Comparison: VEQT vs HGRO vs XEQT
| Name | DivYield | Mgmnt Fee |
| HGRO – Horizons Growth Tri ETF | 1.15 | 0.16 |
| VEQT – Vanguard All Equity ETF Portfolio | 1.23 | 0.24 |
| XEQT – Ishares Core Equity ETF | 1.53 | 0.20 |
HGRO, the Horizons Growth Tri ETF, boasts the most competitive management fees, at just 0.16%. The fee differences among these three ETFs are quite slight.
Each of these ETFs distributes dividends. iShares’ XEQT leads with a 1.53% dividend yield, followed by VEQT at 1.23%. Nonetheless, the main goal of these growth-oriented ETFs is to achieve long-term growth.
If you are looking for ETFs that focus on generating high dividend income, you can consult our previous post.
Performance: VEQT vs HGRO vs XEQT
In assessing performance, the available data is somewhat constrained as all-in-one ETFs are relatively recent additions to the market. Over the past three years, XEQT and VEQT have demonstrated the highest average returns.
VEQT and XEQT exhibit generally comparable performances.
In the realm of liquidity, HGRO trails behind XEQT and VEQT in popularity. Specifically, HGRO’s assets under management (AUM) are around 200 million. The lower AUM indicates reduced liquidity when trading HGRO. VEQT stands out for its excellent liquidity, attributed to its substantial assets under management, totaling 1.1 billion dollars.
VEQT Review: Geographic diversification
| Country | VEQT % | HGRO % | XEQT % |
|---|---|---|---|
| United States of America | 42.9 | 76.2 | 48.4 |
| Canada | 29.3 | 22.6 | 24.0 |
| Asia | 9.9 | 0.1 | 10.1 |
| Europe | 5.8 | 0.2 | 7 |
| Latin America | 0.8 | 0.2 | 0.4 |
| Africa | 0.3 | 0 | 0.2 |
If you are looking for a diversified ETF with exposure to international market, XEQT and VEQT are the best options available. As you can see in the table above, HGRO has a limited exposure to international markets.
VEQT review: Sector diversification
| Sector Classs | VEQT | HGRO | XEQT |
|---|---|---|---|
| Financial Services | 19.8 | 10.6 | 18.9 |
| Technology | 17.6 | 21.1 | 17.9 |
| Industrials | 11.0 | 5.3 | 11.1 |
| Consumer Cyclical | 9.6 | 8.1 | 9.9 |
| Healthcare | 8.8 | 6.3 | 9.7 |
| Comm. Services | 7.8 | 9.2 | 7.9 |
| Consumer Defensive | 6.0 | 3.8 | 6.2 |
| Basic Materials | 6.8 | 2.1 | 5.8 |
| Energy | 5.8 | 2.9 | 5.5 |
| Real Estate | 3.3 | 1.0 | 3.6 |
| Utilities | 3.0 | 1.5 | 3.0 |
In terms of sector diversification, all three ETFs invest in stocks on companies operating in the various economic sector. XEQT and VEQT are similar, with financial services and technology at the top at around 18% each. On the other hand, HGRO invests 21.1% in the technology sector and only 10.6% in financial services.
VEQT Holdings
Please refer below to the top 10 stocks owned by VEQT indirectly (Note: VEQT creates your portfolio by investing in various vanguard ETFs. )
| Holding Name | % Weight |
|---|---|
| Apple Inc. | 2.08% |
| Shopify Inc. Class A | 2.04% |
| Microsoft Corp. | 1.98% |
| Royal Bank of Canada | 1.90% |
| Toronto-Dominion Bank | 1.61% |
| Amazon.com Inc. | 1.32% |
| Enbridge Inc. | 1.08% |
| Bank of Nova Scotia | 1.0% |
| Brookfield Asset Management Inc. Class A | 0.95% |
| Canadian National Railway Co. | 0.92% |
Conclusion
All-in-one growth ETFs present a host of advantages for investors. They typically come with low fees, making them a cost-effective choice. Furthermore, many brokers now offer commission-free trades on ETFs, enhancing their appeal. These funds are particularly well-suited for passive investors who have a long-term investment horizon. They offer the benefit of diversification, spreading investments across various assets to mitigate risk. Additionally, investors need not worry about rebalancing their portfolios, as this is managed by the fund’s professionals.
VEQT, in particular, stands out with its relatively low management fees. It provides broad international exposure, allowing investors to tap into global markets. This ETF has demonstrated excellent performance coupled with low volatility, making it an attractive option for those seeking steady growth.