If you want a simple, globally diversified ETF with low fees and zero maintenance, VEQT is a solid choice. It gives you instant exposure to thousands of stocks across Canada, the US and international markets, all in one fund.
With automatic rebalancing and strong long-term growth potential, it’s perfect for passive investors who want a set-it-and-forget-it portfolio.
What is VEQT? A one-stop equity portfolio ETF
Vanguard’s VEQT (Vanguard All-Equity ETF Portfolio) is a 100% equity ETF built for investors who want instant global diversification in a single, low-cost fund. Unlike ETFs that focus on one region or sector, VEQT is a “fund of funds,” meaning it holds multiple Vanguard ETFs to cover the entire global stock market.
The result? Massive diversification, low fees and zero hassle. All you do is just buy and hold.
Buy VEQT with QuestradeWho should invest in VEQT?
- Long-term, passive investors: If you want a hands-off, automatically balanced portfolio, this is for you.
- Growth-focused investors: Since VEQT is 100% stocks, it’s built for higher returns over time (but with more ups and downs).
- DIY investors who want simplicity: A single ETF that gives you global exposure, there’s no need to manage multiple holdings.
- TFSA or RRSP investors: Ideal for tax-advantaged accounts where you’re focused on capital growth.
VEQT vs. other top Vanguard ETFs: Quick comparison
VEQT is definitely the most aggressive option with no bonds at all, meaning it can deliver higher returns but it’ll also fluctuate way more. So if you want a smoother ride, VGRO or VBAL may be better options.
How to buy VEQT in Canada
Buying Vanguard’s VEQT ETF in Canada is super straightforward; if you have access to the Toronto Stock Exchange (TSX), you can buy it. Whether you’re stacking your TFSA, RRSP or a non-registered account, VEQT gives you a set-it-and-forget-it all-equity portfolio in a single fund.
Step-by-step guide to buying VEQT
- 1 Open a brokerage account: Sign up with an online broker (discussed more below) that lets you trade ETFs.
- 2 Fund your account: Transfer money from your bank. Some platforms offer instant funding, while others might take a few days.
- 3 Search for VEQT: Type in VEQT.TO in your brokerage’s trading platform.
- 4 Decide how much to invest: Pick how many shares you want or set a dollar amount to invest.
- 5 Place a buy order: Use a market order (buys at the current price) or a limit order (buys only at a set price).
- 6 Review and confirm: Double-check everything and then hit the buy button.
Best brokerages for buying VEQT (With free ETF trading)
If you want to skip paying commissions, these Canadian brokerages let you buy ETFs for free:
Where can you hold VEQT?
VEQT works in a variety of accounts, depending on your investment goals and tax situation:
- TFSA (Tax-Free Savings Account): Best for tax-free growth and withdrawals.
- RRSP (Registered Retirement Savings Plan): Great for tax-deferred growth and reducing taxable income.
- RESP (Registered Education Savings Plan): Can be used for a child’s future education with government grants.
- Non-registered (taxable) accounts: No tax benefits, but great if you’ve maxed out registered accounts.
Tax Tip: If you’re holding VEQT in a TFSA or RRSP, you’re shielded from capital gains taxes. In a non-registered account, any gains are taxable when you sell, so keep that in mind.
VEQT pros and cons
Pros
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Instant global diversification: One ETF, 13,500+ stocks across the US, Canada, developed and emerging markets. No need to overthink it.
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Low fees: With an MER of just 0.24%, it's way cheaper than mutual funds or robo-advisors.
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Hands-off investing: Set it and forget it. VEQT automatically rebalances, so you don’t have to lift a finger.
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Strong growth potential: Since it's 100% stocks, you're getting higher long-term returns compared to balanced funds.
Cons
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Higher volatility: No bonds equals bigger swings when markets dip. If you stress over red days, this may not be for you.
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Limited customization: You can’t tweak sector or region allocations like you could with individual ETFs.
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Lower dividends: With a ~1.52% yield, VEQT isn’t ideal if you’re looking for steady dividend income.
VEQT is perfect for long-term investors who want global stock market growth without the hassle. Just be ready for some volatility along the way. If you prefer a smoother ride, you might want to look elsewhere.
VEQT is built for maximum diversification, investing in thousands of stocks through four Vanguard ETFs that cover the entire global market.
Instead of picking and choosing stocks or juggling multiple ETFs, you get instant exposure to the US, Canada, developed international markets and emerging markets, all in one fund.
What’s inside VEQT?
VEQT holds four major ETFs that split up its global exposure:
- VUN | Vanguard U.S. Total Market Index ETF (46.49%): Covers the entire US stock market, from tech giants such as Apple, Microsoft and Amazon to small-cap companies.
- VCN | Vanguard FTSE Canada All Cap Index ETF (30.08%): Tracks a broad mix of Canadian stocks, including Royal Bank, TD and Shopify.
- VIU | Vanguard FTSE Developed All Cap ex North America Index ETF (16.73%): Provides exposure to developed markets outside North America, such as Japan, Europe and Australia.
- VEE | Vanguard FTSE Emerging Markets All Cap Index ETF (6.69%): Invests in fast-growing economies such as China, India and Brazil.
With these four funds, VEQT spreads its investments across 13,400+ stocks worldwide, meaning you’re not tied to the fate of any single country or industry.
Asset allocation breakdown
VEQT is 99.98% stocks, making it a pure equity play with zero bond exposure. Here’s how it’s broken down geographically:
- US stocks: 46.62%
- Canadian stocks: 30.24%
- International developed markets: 16.73%
- Emerging markets: 6.69%
It leans heavily toward North America, which makes sense since the US and Canada are two of the most stable and developed markets. At the same time, it still gives you exposure to international markets, which helps balance out risk and capture global growth.
How diversification impacts performance and risk
The best thing about VEQT is that it’s automatically diversified.
Instead of going all-in on Canada or the US, your money is spread out across thousands of companies in different countries and industries.
- Less risk than a single-market ETF: If one region struggles (let’s say Canada’s market is down), another (such as the US or emerging markets) could help offset those losses.
- Higher long-term growth potential: With exposure to emerging markets such as China and India, VEQT taps into economies that are growing faster than North America.
- No bonds = bigger swings: Since VEQT is 100% stocks, it will rise more in bull markets but also drop more during downturns compared to ETFs that include bonds.
VEQT ETF performance and historical returns
Since launching in January 2019, VEQT has delivered an annualized return of 12.94%, keeping pace with global stock markets.
That’s the beauty of an all-equity, globally diversified ETF. You’re getting exposure to long-term market growth without having to do anything.
Long term growth potential and market cycles
Because VEQT is 100% stocks, it benefits from global market trends and economic growth. It’s going to be more volatile than a balanced fund, but historically, equities outperform bonds over time.
If you can handle the ups and downs, you’re likely to come out ahead in the long run.
While VEQT and XEQT are pretty neck and neck when it comes to returns, VEQT has slightly outperformed XEQT over the last five years.
VGRO on the other hand, with its 20% bond allocation, offers a smoother ride, but lower long-term returns.
What if you had invested in VEQT in 2019?
If you had dropped $10,000 into VEQT back in 2019, you’d be sitting on about $19,000 today, thanks to an average 12.94% compound annual growth rate (CAGR).
| Year | Investment value ($) |
|---|---|
| 2019 | $10,000 |
| 2020 | $11,294 |
| 2021 | $12,755.44 |
| 2022 | $14,406 |
| 2023 | $16,270.13 |
| 2024 | $18,375.49 |
VEQT MER fees and costs: Is it worth the price?
VEQT’s Management Expense Ratio (MER) is just 0.24%, which is way cheaper than mutual funds (1.5% to 2.5%) and even lower than most robo-advisors (0.40% to 0.75% + ETF fees).
In other words, you’re keeping more of your money instead of handing it over in fees.
Why fees matter long term
A 1% fee difference might not sound like much, but over 30 years, it could cost you tens of thousands in lost returns. That’s money that could’ve been compounding instead of going into someone else’s pocket.
How VEQT’s fees compare
- VEQT (0.24%): Really cheap, fully passive, and no advisory costs. Win, Win, Win.
- Robo-Advisors (0.40% to 0.75%): More expensive, but they offer automated portfolio management. (Wealthsimple Invest and QuestWealth as examples)
- Mutual Funds (1.5% to 2.5%): High fees, actively managed and often underperform ETFs after fees.
Any hidden costs?
- Bid-ask spreads: Pretty minor for VEQT, but if you’re trading frequently, these small differences add up.
- Transaction fees: Some brokers charge commissions for buying/selling ETFs. In my opinion, as a long time Canadian stock trader, you should just stick to platforms like Questrade or Wealthsimple Trade to avoid unnecessary costs.
Comparing VEQT and other top etfs
When it comes to the best ETFs for Canadian investors, the three heavyweights that often come up are the ones we’ve discussed so far throughout this article.
- Vanguard's All-Equity ETF Portfolio (VEQT)
- iShares Core Equity ETF Portfolio (XEQT)
- Vanguard's Growth ETF Portfolio (VGRO)
Now let's break down how VEQT stacks up against both XEQT and VGRO.
VEQT vs. XEQT
Both VEQT and XEQT are 100% equity ETFs, offering broad market exposure. VEQT has a slightly higher Management Expense Ratio (MER) at 0.24%, compared to XEQT's 0.20%. However, this difference is minimal and may not significantly impact long-term returns.
VEQT tends to have a higher allocation to Canadian equities, while XEQT offers more exposure to US and international markets.
VEQT vs. VGRO
VGRO is 80% stocks and 20% bonds, making it a solid choice for investors who want growth but still like having some cushion. VEQT, on the other hand, is 100% equities, meaning higher growth potential but also bigger swings.
If you’ve got a long time horizon and can handle the volatility, VEQT could be the better bet. But if you’d rather balance growth with a bit more stability, VGRO is probably the way to go.
Risk tolerance and investor scenarios
- Young investors: With decades ahead to invest, younger individuals might opt for VEQT or XEQT to maximize growth, accepting higher short-term volatility.
- Retirees: Those in or nearing retirement may prefer VGRO or even more conservative ETFs, as the bond component can provide income and reduce portfolio volatility.
- TFSA vs. RRSP investors: Both VEQT and VGRO are suitable for TFSAs and RRSPs. The choice depends on individual risk tolerance and investment goals. In a TFSA, the tax-free growth of VEQT's potential higher returns might be appealing. In an RRSP, the tax-deferred growth with VGRO's balanced approach could offer a smoother ride.
Ultimately, the decision between VEQT, XEQT and VGRO really does hinge on your financial goals, risk tolerance and investment timeline.
Each ETF has its merits, so aligning your choice with your personal circumstances is the key.
Does VEQT pay dividends? Understanding distributions
Dividend yield
VEQT’s 12-month trailing yield sits at ~1.52%, which is a bit lower than VGRO’s 1.96%. The reason? VEQT is 100% stocks, with no bonds or high-yield assets to boost payouts.
Payment frequency
Unlike some ETFs that pay out quarterly, VEQT only distributes dividends once a year, so don’t expect a steady income stream.
Dividend taxation
Where you hold VEQT matters when it comes to taxes:
- Registered accounts (TFSA, RRSP): Dividends grow tax-free in a TFSA or tax-deferred in an RRSP. No headaches here.
- Non-registered accounts: Dividends are taxable, and foreign dividends (US stocks, etc.) come with withholding taxes.
VEQT vs. other ETFs: Dividend comparison
VEQT’s yield is lower than dividend-focused ETFs, but that’s because it’s built for growth, not income. So instead of focusing on payouts, VEQT prioritizes capital appreciation, which means your money compounds over time.
Is VEQT a good buy right now?
Short answer? Yes, if you’re investing for the long term.
Trying to time the market is a losing game, especially with an ETF like VEQT that’s designed for decades of growth, not short-term trades.
Why market timing doesn’t matter
VEQT holds thousands of stocks across global markets, meaning its price is constantly moving. Some days it’s up, some days it’s down, but over the long run, equities tend to rise.
If your goal is steady, long-term growth, the best strategy is to get invested and stay invested.
How to think about valuation and price fluctuations
Stock prices are influenced by economic cycles, interest rates and market sentiment — all things that nobody can predict perfectly.
So rather than worrying about whether VEQT is “cheap” or “expensive” right now, focus on the bigger picture: Global markets tend to grow over time, and VEQT gives you broad exposure to that growth.
Final thoughts: Who should invest in VEQT?
VEQT is perfect for long-term investors who want global diversification, solid growth potential and zero maintenance. If you’re comfortable with some market swings and don’t need bonds to smooth things out, it’s one of the easiest ways to invest without overthinking it.
Whether the market’s up, down, or sideways today doesn’t really matter. What matters is staying in the game for the long run.
Noel Moffatt is a Canadian fintech expert with a passion for simplifying personal finance. Based in St. John’s, NL, he draws on his background in finance, SEO, and writing to deliver clear explanations and actionable advice. Noel is dedicated to equipping readers with the knowledge and tools they need to make informed financial decisions, striving to make personal finance more accessible and understandable through his in-depth articles and reviews.
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