6 Best Vanguard Canada ETFs For 2024
The advantages of exchange-traded funds (ETFs) over mutual funds and other investment vehicles are so obvious and attractive.
Besides broader diversification and low cost, ETFs also offer easy investment access, making them suitable for both beginner and advanced investors.
The challenge is that there are different ETF providers out there with varying portfolios. As a result, it’s easy to get confused about which ETF to choose especially if you’re just starting.
While you can’t go wrong with any Vanguard Canada ETFs, it will be cost-effective to invest in one of its best ETFs.
To help you make a cost-effective decision, here I present the best Vanguard Canada ETFs with a side-by-side comparison of how they compare with other ETFs.
Let’s get started!
About Vanguard Canada
Vanguard Canada is a division of one of the world’s largest asset managers, Vanguard. Operating as The Vanguard Group Inc., Vanguard is headquartered in the US and has been in existence since 1975.
As of January 31, 2021, Vanguard has over $9.1 trillion in assets under management (AUM). With 19 global offices, the multinational assets manager has attracted over 30 million clients worldwide.
In 2011, Vanguard expanded to Canada through Vanguard Investments Canada Inc. Since then, Canadian investors have saved over $10 million through Vanguard Canada.
With this and lots of other benefits, it’s obvious why so many Canadians are interested in the best Vanguard ETFs in Canada.
6 Best Vanguard Canada ETFs
Vanguard Canada offers a wide range of ETFs to help Canadian investors save costs. However, the following Vanguard all-in-one ETFs have proven to be cost-effective for investors:
- Vanguard Conservative ETF Portfolio (VCNS)
- Vanguard Conservative Income ETF Portfolio (VCIP)
- Vanguard Retirement Income ETF Portfolio (VRIF)
- Vanguard Growth ETF Portfolio (VGRO)
- Vanguard Balanced ETF Portfolio (VBAL)
- Vanguard All-Equity ETF Portfolio (VEQT)
All the above ETFs are traded on the Toronto Stock Exchange (TSX) in Canadian dollars.
In what follows, you will learn about the facts and portfolio characteristics of each of the above Vanguard Canada ETFs.
1. Vanguard Conservative ETF Portfolio (VCNS)
| Date of inception | January 25, 2018 |
| Assets under management (AUM) | $467.75 million |
| Assets allocation | 40.19% stocks, 59.77% bonds, and 0.04% short-term reserves |
| Management fee | 0.22% |
| MER | 0.24% |
| Minimum investment | $26.95 |
| # of underlying holdings | 13,508 stocks & 18,991 bonds |
| Top market allocation | 44.3% US and 30.0% Canada |
| Dividend yield | 3.50% |
| Distribution frequency | Quarterly |
| 1-year return | +5.92%Â |
| 3-year return | +1.15% |
| Return since inception | +3.60% |
| Risk level | Low |
The Vanguard Conservative ETF Portfolio (VCNS) was launched in 2018 to provide investors with income and moderate long-term capital growth.
To achieve its objective, the ETF invests in equity and fixed income securities. As a conservative portfolio with more allocations to bonds, the ETF has a low-risk level.
As of the time of writing, VCNS has provided investors with a +3.60% return since its inception. This is impressive considering its asset allocations.
2. Vanguard Conservative Income ETF Portfolio (VCIP)
| Date of inception | January 29, 2019 |
| Assets under management (AUM) | $192.35 million |
| Assets allocation | 20.15% stocks, 79.79% bonds & 0.06% short-term reserves |
| Management fee | 0.22% |
| MER | 0.24% |
| Minimum investment | $24.81 |
| # of underlying holdings | 13,508 stocks & 18,991 bonds |
| Top market allocation | 44.1% US & 30.1% Canada |
| Dividend yield | 3.90% |
| Distribution frequency | Quarterly |
| 1-year return | +3.99% |
| 3-year return | -1.11% |
| Return since inception | +2.34% |
| Risk level | Low |
Like VCNS, VCIP also aims to offer investors income and long-term capital growth by investing in equity and fixed income securities.
However, VCIP invests more in bonds than VCNS. Consequently, VCIP has had a relatively low return of +2.34% since its inception.Â
While the VCIP return may be low, it could be your best option if you’re looking for income and long-term capital growth with lower risk.
3. Vanguard Retirement Income ETF Portfolio (VRIF)
| Date of inception | September 09, 2020 |
| Assets under management (AUM) | $293.74 million |
| Assets allocation | 30.82% stocks, 69.10% bonds and 0.08% short-term reserves |
| Management fee | 0.29% |
| MER | 0.32% |
| Minimum investment | $23.52 |
| # of underlying holdings | 13,508 stocks & 19,696 bonds |
| Top market allocation | 30.2% Canada & 25.5% US (equity)Â |
| Dividend yield | 4.13% |
| Distribution frequency | Monthly |
| 1-year return | +4.38% |
| 3-year return | +1.22% |
| Return since inception | +2.76% |
| Risk level | Low to medium |
The Vanguard Retirement Income ETF Portfolio (VRIF) is also a bond-weighted ETF that is designed for retirement investing.
The portfolio seeks to offer consistent income and capital appreciation by investing in equity and fixed income securities.
Compared to other Vanguard income ETFs, the VRIF has high fees with lower returns.
Nevertheless, if you’re looking for consistent monthly retirement income and capital appreciation, you can’t go wrong with this portfolio.
4. Vanguard Growth ETF Portfolio (VGRO)
| Date of inception | January 25, 2018 |
| Assets under management (AUM) | $4.61 billion |
| Assets allocation | 80.21% stocks, 19.74% bonds & 0.05% short-term reserves |
| Management fee | 0.22% |
| MER | 0.24% |
| Minimum investment | $32.24 |
| # of underlying holdings | 13,508 stocks & 18,991 bonds |
| Top market allocation | 44.7% US & 29.6% Canada (equity) |
| Dividend yield | 2.61% |
| Distribution frequency | Quarterly |
| 1-year return | +9.73% |
| 3-year return | +5.71% |
| Return since inception | +6.44% |
| Risk level | Low to medium |
The Vanguard Growth ETF Portfolio (VGRO) is tailored to investors looking for long-term capital growth.
To achieve its goal, the ETF invests in equity and fixed income securities across different markets. Like other growth ETFs, VGRO invests more in stocks and less in bonds and short-term reserves.
With such allocations, the ETF was able to offer investors a competitive +6.07% cumulative return since its inception in 2018.
5. Vanguard Balanced ETF Portfolio (VBAL)
| Date of inception | January 25, 2018 |
| Assets under management (AUM) | $2.56 billion |
| Assets allocation | 60.18% stocks, 39.79% bonds & 0.03% short-term reserves |
| Management fee | 0.22% |
| MER | 0.24% |
| Minimum investment | $29.53 |
| # underlying holdings | 13,508 stocks & 18,991 bonds |
| Top market allocation | 44.4% US & 29.9% Canada (equity) |
| Dividend yield | 3.06% |
| Distribution frequency | Quarterly |
| 1-year return | +7.80 |
| 3-year return | +3.46% |
| Return since inception | 5.05% |
| Risk level | Low to medium |
The Vanguard Balanced ETF Portfolio (VBAL) is designed for individuals looking for long-term capital growth with a moderate level of income.
By investing heavily in stocks and bonds, VBAL was able to offer a 5.05% return to investors since its inception in 2018.Â
Compared to the other balanced ETFs (such as ZBAL) has relatively low cumulative returns.
6. Vanguard All-Equity ETF Portfolio (VEQT)
| Date of inception | January 29, 2019 |
| Assets under management (AUM) | $3.41 billion |
| Assets allocation | 99.99% stocks & 0.01% short-term reserves |
| Management fee | 0.22% |
| MER | 0.24% |
| Minimum investment | $37.59 |
| # of underlying holdings | 13,508 stocks |
| Top market allocation | 44.4% US and 30.1% Canada |
| Dividend yield | 1.86% |
| Distribution frequency | Annually |
| 1-year return | +1.31% |
| 3-year return | +7.97% |
| Return since inception | +10.08% |
| Risk level | Medium |
The Vanguard All-Equity ETF Portfolio (VEQT) invests almost all funds in stocks with the aim of providing investors with long-term capital growth.
With such allocation, VEQT was able to offer investors up to +10.08% return since its inception in 2019.
While this return is low compared to other all-equity ETF returns, VEQT stacks up with multiple underlying holdings.
What is the Overall Best Vanguard ETF in Canada?
From the above review of the best Vanguard ETFs in Canada, you can see how the ETFs vary by their allocations, returns, fees, distribution frequency, and so on.
Frankly speaking, you can’t go wrong with any of the above ETFs once you identify the one that suits your needs and situation.
As a result, the major tasks depend on identifying your risk tolerance and investment objective.
The good thing is that whether you have low or high-risk tolerance, Vanguard has the perfect ETF for you.
After identifying your investment objective and risk tolerance, the next thing is to consider the following factors:
- Assets allocations
- Underlying holdings
- Minimum investment (current market price)
- Management fee and MER
- ETF Returns
With the above factors, you can easily decide which Vanguard ETF suits your needs or opt for alternatives.
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Pros and Cons of Vanguard Canada ETFs
Judging from the above review, it’s obvious that each Vanguard ETF in Canada has its pros and cons.
However, the following are the common pros and cons of the ETFs you need to consider before making a final decision.
Pros
- Multiple underlying holdings: Vanguard ETFs have thousands of underlying holdings that provide broader diversification.
- Above-average returns: While the returns of most Vanguard ETFs don’t beat the competition, they are above average.
Cons
- High fees: The management fees and MERs of Vanguard ETFs in Canada are among the highest in the country.
- Low dividend yield: Compared to other ETFs out there, the above Vanguard ETFs’ dividend yields are relatively low.
- No registered accounts: If you’re looking to invest through registered accounts, you have to look elsewhere as none of the above ETFs support such.
How Do I Invest in Vanguard ETF?
There are two major ways you can invest in Vanguard ETF – through DIY or a financial advisor.
Doing it yourself (DIY) involves handling everything alone by signing up with one of the self-directed brokerages out there, such as Wealthsimple Trade or Questrade.
While the process of investing may vary from one brokerage to another, the following are the common steps:
- Fund your account
- Search your favourite Vanguard ETF through the brokerage
- Enter the amount of shares you want to buy
- Verify your order to start investing
But if you don’t have the knowledge or time of doing it yourself (DIY), you can invest in a Vanguard ETF through your financial advisor.
All you need is to inform your financial advisor about your risk tolerance and investment objective and have them handle everything on your behalf.
While investing through a financial advisor could be costly, it will save you time and potential mistakes especially if you’re a beginner investor.
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Vanguard Canada ETFs vs BMO ETFs
Vanguard ETFs are not designed for every investor. If none of the above Vanguard Canada ETFs suits your needs, I can guess why.
Fortunately, there are several alternatives to consider such as the iShares/BlackRock Canada ETFs, Horizons ETFs and Fidelity ETFs.
However, I find the BMO ETFs worthy of comparison here due to their low management fees and MERs, competitive dividend yield and returns, and eligibility for registered accounts. Some of the best BMO ETFs include:
- BMO Conservative ETF (ZCON)
- BMO Growth ETF (ZGRO)
- BMO Balanced ETF (ZBAL)
- BMO All-equity ETF Portfolio (ZEQT)
Like Vanguard ETFs, BMO ETFs are also traded on the Toronto Stock Exchange (TSX) in Canadian dollars.
The following is a highlight of how the above BMO ETFs compare with Vanguard Canada equivalents as of February 14, 2024:
VCNS vs ZCON
| ETF Profile | VCNS | ZCON |
| Inception date | January 25, 2018 | Feb 15, 2019 |
| Assets allocation | 40.19% stocks, 59.77% bonds, and 0.04% short-term reserves | 57.97% fixed income, 41.91% stocks, 0.12% cash and cash equivalents |
| Minimum investment | $26.95 | $32.32 |
| Management fee | 0.22% | 0.18% |
| MER | 0.24% | 0.20% |
| Top market allocation | US | Canada |
| Distribution frequency | Quarterly | Quarterly |
| Return return | +3.60% | 4.24% |
VGRO vs ZGRO
| ETF Profile | VGRO | ZGRO |
| Inception date | January 25, 2018 | Feb 15, 2019 |
| Assets allocation | 80.21% stocks, 19.74% bonds & 0.05% short-term reserves | 81.35% stocks, 18.65% fixed income & 0.00% cash and cash equivalents |
| Minimum investment | $32.24 | $39.41 |
| Management fee | 0.22% | 0.18% |
| MER | 0.24% | 0.20% |
| Top market allocation | US | Canada |
| Distribution frequency | Quarterly | Quarterly |
| Return since inception | +6.44% | 7.96% |
Learn more: ZGRO Review
VBAL vs ZBAL
| ETF Profile | VBAL | ZBAL |
| Inception date | January 25, 2018 | Feb 15, 2019 |
| Assets allocation | 60.18% stocks, 39.79% bonds & 0.03% short-term reserves | 62.12% stocks, 37.87% fixed income & 0.01% cash and cash equivalents |
| Minimum investment | $29.53 | $35.72 |
| Management fee | 0.22% | 0.18% |
| MER | 0.24% | 0.20% |
| Top market allocation | US | Canada |
| Distribution frequency | Quarterly | Quarterly |
| Return since inception | 5.05% | 6.11% |
VEQT vs ZEQT
| ETF Profile | VEQT | ZEQT |
| Inception date | January 29, 2019 | Jan 17, 2022 |
| Assets allocation | 99.99% stocks & 0.01% short-term reserves | 100.02% stocks & -0.02% cash and cash equivalents |
| Minimum investment | $37.59 | $43.36 |
| Management fee | 0.22% | 0.20% |
| MER | 0.24% | 0.18% |
| Top market allocation | US | US |
| Distribution frequency | Annually | Quarterly |
| Return since inception | +10.08% | 5.88% |
Learn more: ZEQT Review
Verdict
There you have the best Vanguard ETFs in Canada. Bearing in mind their pros and cons, you have the final say on which to go with.
Hopefully, now you can decide which Vanguard ETF suits your needs based on your investment objective and risk tolerance.
But if you’re opting for an alternative, consider the BMO ETFs or some of the best all-in-one ETFs in Canada discussed here.
I will be available in the comment section for any additional clarification you may need on the subject matter.
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Frequently Asked Questions on Vanguard Canada ETFs
How do I buy Vanguard ETF in Canada?
You can buy Vanguard ETF in Canada through a self-directed brokerage or a financial advisor.
Which Vanguard ETF has the highest return?
Based on the above review, the Vanguard All-Equity ETF Portfolio (VEQT) has the highest return with a +10.08% since inception return as of January 31, 2024. This is possible because the ETF invests almost all funds in stocks.Â
Consequently, you need to have an above-average risk level to invest in VEQT.
Which Vanguard ETF pays the highest dividend?
Based on the above review, the Vanguard Retirement Income ETF Portfolio (VRIF) has the highest dividend of 4.13% as of January 31, 2024 The VRIF distributes dividends monthly.
Do Vanguard ETFs pay dividends monthly?
Yes! Some of the Vanguard ETFs that pay dividends monthly include the Vanguard Retirement Income ETF Portfolio.
How many Vanguard ETFs should I own?
While there’s no limit on the number of Vanguard ETFs you can buy, your decision should be based on your risk tolerance and investment objective.
Have more questions? Kindly drop them in the comment below.
