What’s an all-in-one ETF
VGRO (Vanguard Growth ETF Portfolio) is all-in-one ETF available on the TSX. All-in-one ETFs are a portfolio professionally managed available for investors in a form of an ETF. It has three main advantages:
- easy access to a portfolio so it’s great for DIY investors who would like a handoff approach to investing;
- portfolio is rebalanced automatically to maintain the desired allocation;
- Good substitute to Robo-advisors such wealthsimple invest (auto-pilot), Questrade porfolios…etc. All-in-one ETF cost less than managed Robo-advisors in terms of fees.
VGRO Investment objective
The Fund seeks to provide long-term capital growth by investing primarily in one or more exchange-traded funds managed by Vanguard that provide exposure to equity and/or fixed income securities.
In essence, when acquiring VGRO, you are acquiring of portfolio of ETFs. 80% of the portfolio is invested in equity ETFs while the remaining 20% is invested in fixed income ETFs. It’s a growth portfolio ideal for investors with long term objective and medium risk tolerance.
VGRO price and chart
XGRO vs VGRO vs ZGRO
There are two main all-in-one ETFs that have same portfolio breakdown (80% equity and 20% bonds): the BMO Growth – ZGRO and the iShares ETF XGRO.
Updated daily, XGRO vs ZGRO vs VGRO
Fees and Morningstar rating
VGRO has a 0.24% management expense ratio. This is the total charge for the fund. Even if VGRO a group of ETFs at once, client will not pay MER for each ETF, the maximum they are charged is the MER of the all-in-one ETF.
Management Fee | 0.22% |
Management Expense Ratio (MER) | 0.24% |
Fees and AUM comparison
XGRO and ZGRO offer the lowest fees at 0.20%. Vanguard’s VGRO is a bit higher at 0.24%. Another factor that could impact your choice is liquidity. Generally speaking, the larger fund the better liquidity it offers to investors. Liquidity determines the difference between bid and ask price when selling or buying. So, it’s an important factor to consider. The largest fund among our three contenders is Vanguards ETF VGRO with over 2.5 Billion dollars in assets.
Source: Barchart, *AUM: Asset under management in millions
Best All-In-One ETF Canada 2023
What are the largest ETFs in Canada?
VGRO Holdings
VGRO has a great coverage, it includes US, Canada and World equities. 36% is invested in US stocks. As you can see below, VGRO invests in a basket of various ETFs.
Fund | |
---|---|
Vanguard U.S. Total Market Index ETF | 34.73% |
Vanguard FTSE Canada All Cap Index ETF | 23.82% |
Vanguard FTSE Developed All Cap ex North America Index ETF | 16.28% |
Vanguard Canadian Aggregate Bond Index ETF | 11.65% |
Vanguard FTSE Emerging Markets All Cap Index ETF | 5.66% |
Vanguard Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged) | 4.04% |
Vanguard U.S. Aggregate Bond Index ETF (CAD-hedged) | 3.82 |
Sector allocation
VGRO offers an excellent diversification accross various sectors.
Sector | Fund |
Financials | 19.2% |
Technology | 16.3% |
Industrials | 12.6% |
Consumer Discretionary | 12.0% |
Energy | 8.9% |
Health Care | 8.6% |
Basic Materials | 6.1% |
Consumer Staples | 5.4% |
Utilities | 4.2% |
Telecommunications | 3.5% |
Real Estate | 3.3% |
Total | 100.0% |
How to choose the best All in one ETF portfolio?
You have first to determine your risk profile. Risk profile is established by answering two questions:
- The term: are you saving for the long term? Or short term?
- What is your risk tolerance? Every ETF can go up and down in value. What percentage variation can you live with.
You can also use a questionnaire available online and offered by Vanguard: https://www.vanguardcanada.ca/individual/questionnaire.htm#/
Based on your answers, the tool will propose the best allocation among stocks, bonds and short-term reserves.
Conservative portfolio
Fixed income will dominate the portfolio at 60% or more (with the exception of Horizons’). Meaning your investments will be mostly in Bonds. Bonds are much safer than stocks but they don’t usually offer much return. This portfolio is perfect for some one whose financial objective is short term or who is risk averse. Your portfolio will still have between 20-40% exposure to stocks which allows for some modest growth with a moderate risk overall.
Balanced profile
A balanced portfolio is an investment that combines stocks and bonds. In general, 60% will be invested in the stock market (. While the remainder (40%) will be invested in fixed income investments. This portfolio seeks to combine both growth potential by holding stocks and the safety associated with holding bonds.
Growth portfolio
A growth fund is a diversified portfolio of stocks that has capital appreciation as its primary goal. This is ideal for investors who have a long term objective such as building a retirement fund. The fund will invest at least 80% in Stocks. Generally for these type of funds, providing a dividend income is a secondary objective.
How can I buy VGRO
Clients have simply to use their banks brokerage websites or independent brokers platform (such as Questrade or Wealthsimple) to acquire the ETF. No need to contact a financial advisor, it’s a product for DIY investors.
This ETF can be held in registered accounts such as RRSP, TFSA or RESP.