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VGRO ETF: A Look at Canada’s Most Diversified Fund

vgro etf

Finding the best investment option as per your financial goals can be confusing. The sheer number of options available makes it difficult to make a choice. When picking an investment product, it’s advisable to keep your portfolio diversified and an eye on your financial objectives. 

Here we discuss a great investment option for you, the VGRO ETF or the Vanguard Growth ETF Portfolio and why it could be a great addition to your portfolio.

What is an ETF? 

Exchange-traded funds (ETFs) have attracted many investors in recent times. ETFs, combine the best aspects of stocks and mutual funds that make them a valuable part of your portfolio. ETFs pool investor’s capital and manage it professionally as per the fund’s objectives.

In this respect, they are the same as mutual funds. What sets them apart from MFs is that you can trade them on an exchange just like stocks. When you buy a mutual fund, you can place your order any time during the day but, your order will be processed at the end of the day when the markets close. You can buy an ETF instantaneously online at the listed price, just like you would buy any listed security. 

When you invest in an ETF, you invest in a basket of securities, spread across different asset classes like stocks, gold etc. and sometimes across industries too! 

If you are you looking for an option to diversify your portfolio look no further than the most diversified fund in Canada. Find out more about the VGRO ETF.

An Overview of the VGRO ETF

VGRO is a growth-oriented exchange-traded fund trading on the Toronto Stock Exchange since January 2018. It is a balanced fund that has Canadian, US, and international stocks and bonds in its portfolio.

As seen earlier, VGRO stands for Vanguard Growth ETF Portfolio. Vanguard is one of the largest asset management companies in the world and also a pioneer in the field of index fund investing. Vanguard has an extensive portfolio of index funds with some of the lowest expense ratios in the market. Vanguard founder John Bogle believed that index funds were the most efficient way to invest in the market. 

Vanguard Growth ETF Portfolio was created to offer long-term capital growth by investing in equity and fixed-income securities. The underlying funds are the index funds that provide VRGO ETF with a broad-based exposure to equity and bond markets. 

VGRO is geographically diverse; the portfolio consists of investment mainly in the United States and Canada followed by investment spread across Japan, China, United Kingdom, and other countries. The fund is diversified industry-wise too!

The portfolio is rebalanced and the asset mix is reconstituted periodically based on the sub advisor’s discretion. 

The below table lists a few key aspects of the fund:

Inception Date25th January 2018
NAV (As at close of 12, April 2021)(CAD)$30.4713
Portfolio (As of 28, February 2021)Stocks: 80.29 % Bonds: 19.68 %. Short-term reserves: 0.03 %
AUM (As of 28, February 2021)(CAD)$ 2.1 Billion
Management Fee0.22%
Dividend ScheduleQuarterly
Income distribution per unit$0.124983

Vanguard Growth ETF Fund or VGRO: To Invest Or Not?

Being run by Vanguard gives VGRO an edge over similar funds run by other companies. Vanguard is one of the world’s largest asset management companies. It has more than US$6 trillion in assets under management worldwide.

VGRO ETF offers diversification across industries and also internationally. It held 12,642 stocks and 16,553 bonds (Feb 28, 2021) in its portfolio. If you wanted to diversify your portfolio, having so many different securities and bonds in your kitty from across countries would be a daunting task. The sheer number and spread would make it very difficult, if not impossible, for most investors. 

As we said earlier, VGRO is a well-diversified fund that invests in the top seven Vanguard funds that makes it very robust and cost-efficient. As seen in the above table, VGRO’s asset allocation is approximately 80% equity (stocks) and 20% fixed income (bonds).

The fund is not very old, so there is not too much data available to analyze it. If you had invested $10,000 in January 2018 in the VGRO ETF, your investment would be worth 12,987.98 in March 2021. 

Investing in the VGRO ETF is simple and easy to manage too. The management rebalances the portfolio so that you don’t have to bother about doing that from time to time.

VGRO ETF portfolio has stocks to bonds ratio of 80:20, which places it at an above-average risk tolerance level. You can invest in it, keeping your risk tolerance level in mind. When the market is bullish, the ETF will swing higher; when the markets fall, the ETF decline will also be sharper. 

VGRO ETF is not tax-efficient and this may not be a deal-breaker for you but it’s essential to be aware of this aspect when investing. 

The VGRO ETF portfolio consists of 30% (29.6% to be exact) of investments in Canada. As a Canadian, some of you may find it an advantage as you know about market conditions in your country, but some may see this as a drawback. Further, when you invest on your own, you can customize your portfolio, but this is not possible when investing in an ETF. 

The Bullish takeaway

Diversifying across sectors makes your investment safe and you can benefit from the market fluctuations. VGRO ETF is diversified across various high-performing funds across sectors and offers substantial growth in the long term.  

The key is, however, to stay invested in for the long term. The fund objective also states that it is created with a long-term view. It is a well-managed fund that can offer sustainable and relatively risk-free returns.

The Vanguard Growth ETF can be a good investment option for you if you are just a beginner or already have some investments but want to diversify your portfolio. Having said that, it is always a good idea to find out in detail about the product before buying it. Buy it because it fits your investment objective and not because it’s the flavor of the season. 

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