In this post, we will reviewing VEQT Vanguard All Equity ETF Portfolio. VEQT is a growth ETF that invest 100% of its funds on equities. We will pit VEQT against other similar All-in-one ETFs such as HGRO and XEQT.
Many Canadians prefer investing in ETFs because of their low management fee and diversification. ETFs now exist for every asset class and sector. The dilemma is to choose the right ones to build your portfolio. The all-in-one ETFs responds directly to this need. By buying one ETF, the investor can have exposure to various types of assets. It does not require rebalancing because the ETF manager takes care of this for you.
So, it’s simply a matter of choosing one and holding onto it. The all-in-one ETFs are marketed based on the investors’ tolerance to risk. There are three main types: Conservative, Balanced, or Growth.
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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.
