Since our Best All in One ETFs and Best ETFs in Canada articles are two of our most popular, we decided to take a deeper look at the ETF that we most often recommend, by doing an in-depth VEQT ETF Review.
VEQT ETF Key Facts:
- MER: 0.24%
- Account Eligibility: RRSP, TFSA, RRIF, RESP, DPSP, RDSP
- Assets Under Management: $2 Billion
- Date Created: January 29, 2019
- Number of Stocks: 13,674
- Number of Bonds: 0
- Price/Earnings Ratio: 13.6
- Price/Book Ratio: 1.8x
- Dividend Yield: 1.54%
What is VEQT ETF – The Vanguard All Equity Fund?
The Vanguard All Equity ETF (VEQT) was created by Vanguard Canada in order to be a one-stop shop for an entire investing portfolio. Several MDJ authors own VEQT and Robb Engen over at Boomer at Echo has even stated that it is now the only new investment that he buys!
So, what does this Portfolio ETF have inside of it – what are the VEQT holdings?
What Vanguard has done is squished together four of it’s other ETFs in order to create this all-in-one option. Here’s the rough breakdown.
Each of those ETFs then invests in some of the biggest companies from all around the world – giving you ultimate equity diversification. The biggest VEQT holdings are shown below, but you can see that when you split your investment dollar up in so many ways, even the biggest company in the world (Apple at the moment) is only 3% of your portfolio.
VEQT ETF Performance
The VEQT ETF is created to get the exact average return of equities from around the world. It’s not like picking a “hot stock” that you think might outperform its peers.
Consequently, I wouldn’t be too worried about VEQT ETF performance from month-to-month, as it’s more of a long-term passive investing product.
Over time, some companies will go up in value, while others will go lower. On average however, the world’s biggest companies are really really good and making money. The Vanguard all-equity fund gives you instant one-click access to that diversified long-term strategy.
See the chart below for VEQT ETF performance during the pandemic.
VEQT ETF Investment Accounts for Canada
Like all of Vanguard’s all in one portfolio ETFs, the Vanguard all-equity ETF (VEQT) can be purchased in your:
- Non-Registered Account
If you’re just getting started with investing, don’t worry about what this alphabet soup of Canadian investment accounts means – just scroll down and read our section “How to buy VEQT ETF”.
VEQT ETF Fees
When comparing VEQT ETF fees to other investment types, it’s important to understand how different products charge you in different ways – so that you can “compare apples to apples”.
All ETFs have what is called a “management fee” – and then a Management Expense Ratio (MER). They’re almost the same, and the MER actually includes the management fee. The MER is always expressed as a percentage of all the money that you have invested in the ETF. It is charged annually, and it is automatic (you never have to worry about doing anything or tracking anything in order to pay it).
The VEQT ETF management expense ratio (MER) is 0.24%.
That means that for every $10,000 you have invested, you’ll pay $24 each year in fees – a pretty great deal considering you’re instantly invested in over 13,000 stocks!
By comparison, a similar equity mutual fund in Canada (how most Canadians were told to invest over the years) would be 2.5%+.
Even one of Canada’s best robo advisors – while being much cheaper than a mutual fund – is still significantly more expensive to own at around .70% MER.
While some brokerages do charge a small trading fee to buy or sell VEQT ETF, our top Canadian online broker recommendations do not.
How to Buy VEQT ETF
So now you know what the VEQT ETF is, let’s take a look at how to buy units of VEQT ETF.
Step 1: Find The Right Broker
Check out our Best Canadian Online Brokerage article to find out what an online broker is, and our quick comparison on how to choose the best broker for you.
Step 2: Open an Account
Apply to open an RRSP, TFSA, and/or Non-registered account with the brokerage provider that you choose. Applications can now be done online. While you may only use one account at the moment, just open these three all at once as you’re likely to use them in the future.
Step 3: Find the VEQT ETF
Go to the “trade” option. Type “VEQT” into the search box. These four letters are called an ETF’s ticker symbol.
Step 4: Decide How Much to Invest
Decide how much money you want to invest at the current time. Then look up the current price of VEQT. Divide the overall amount of money by VEQT’s price in order to figure out how many shares you should buy.
Example: If I have $5,000 to invest, and the price of VEQT is $33.45, then I would type 5,000/33.45 into my calculator to get 149.47. I’d round down because I don’t have quite enough money to buy 150 units.
Step 5: Execute a Market Order
Select “Market Order” as the order you want to make. A market order just means that you’d like to buy units at the current stock market price. (As you get more advanced you can learn about “Limits Orders” and all sorts of other purchases that you can make using an online broker but for now just keep it simple.)
Final Step: Confirm Your Order
Your broker will show you something that says, “Would you like to confirm the purchase of 149 shares of VEQT for $4,984.05?” You select yes, and then you’ll see your cash balance go down by that amount. You are now the proud owner of 149 shares of VEQT ETF. When you come back in 10+ years, you’ll be able to sell them for more than you bought them!
VEQT ETF Review: FAQ
VEQT ETF Review: Final Thoughts
I will always be a fan of Vanguard, and our glowing VEQT ETF review shows why.
This all-in-one portfolio ETF is really the culmination of what the company (under legend Jack Bogle) started years ago.
It is the ultimate way for investors to capture the returns of the stock market in the simplest, cheapest method possible.
It does bear mentioning that a diversified equity portfolio that adheres to passive index investing principles – the day-to-day returns can still be quite volatile. As such, an all-equity ETF like VEQT is not “safe” in the sense that it is very unlikely to go down. It has the same risk (and reward) profile as the rest of the asset class.
If you’re looking for something less volatile with less anticipated long-term returns, then I’d check out one of the other portfolio ETFs.
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