The Vanguard Balanced ETF Portfolio or VBAL started on the 25th January 2018.
Vanguard is a global giant when it comes to asset management with assets worth over $6 trillion under its management. It is little surprise that they are an international company.
The company is a force to be reckoned with in single-fund solutions. They have an edge over almost every other competitor. Vanguard has managed to gain more than $1 trillion in assets under management in this regard. If you are looking to invest, Vanguard should be on your list to check out.
Since the inception of VBAL, it has gone on to acquire almost $1 Billion in net assets.
Furthermore, VBAL has a Twelve (12) month trailing yield of about 2.22% on investments.
Here’s my personal take on investing in VBAL, If you’re 30 or above, buying more of the VGRO stock will make more sense than VCN or VBAL. When you’re 45 around, you can start with some VBAL or VCN. When you’re 55 and above, you can buy VCN exclusively.
Remember, you always have the possibility to dial down your volatility over the years as you get older. Always remember to hold the investments for long time frames 3 -5 years. That is when you actually can see some decent gains.
You should also know for the fact that the company has five asset allocation ETFs.
The portfolios are all-in-one portfolios. This does not mean that a particular portfolio is a limit though. You can rest assured, regardless of the portfolio you pick, there are still numerous ETFs to invest in.
Of these portfolios or funds, I will be reviewing the Vanguard Balanced ETF Portfolio.
Overview Of The Vanguard Balanced ETF Portfolio (VBAL)
To make things clearer, I will explain what a trailing yield is. A trailing yield is summarized as the portfolio’s cash distribution over 12 months divided by the net asset value at the end of that particular period.
VBAL also has a distribution yield of 2.68%. You should know that this yield is presented as a single distribution from the fund and not as the total return on investment into the fund. The dividends of this fund are shared quarterly.
Those who are eligible for this portfolio include those with Registered Retired Savings Plans (RRSP), Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP), Tax-free Savings Accounts (TFSA), Deferred Profit Sharing Plan (DPSP), and Registered Disability Savings Plan (RDSP). If you operate on any of these plans, you can qualify to buy this ETF Portfolio.
What Does Vanguard Balanced ETF Portfolio (VBAL) Invest In?
The ETF aims at providing capital growth over a long-term period. It is also geared towards generating a moderate amount of income by investing in equity and fixed-income securities.
The fund focuses the majority of its investments in financials. There are also investments in industrial, technology, and consumer services. This majority of investments sum to about 63% of the funds’ investments. The remaining 37% is distributed across Consumer goods, Oil & Gas, Health Care, Basic Materials, Utilities, and Telecommunications. Financials alone accounts for 26.2% of these investments. Data provided should help you understand where your investments will most likely go into and will assist you in monitoring your investments.
Price of Vanguard Balanced ETF Portfolio (VBAL)
The market price of VBAL is currently $26.2250 (CAD). This NAV price listing is as per close of on the March 2nd.
The NAV price, which is the price per share of the fund is $26.2458. This price listing is also as of close on the same day. Both prices experienced a rise in value on this day. The market price went up by$ 0.39 and the NAV price went down by $0.2917.
Risk Rating of Vanguard Balanced ETF Portfolio (VBAL)
As with any ETF, the valuation may vary based on current situations in the market. The best way for you to determine how risky an investment is is to check the returns on investment. The higher the change or variation in the value of returns the riskier the investment.
Vanguard has rated the Vanguard Balanced ETF Portfolio (VBAL) as a low to medium risk investment. They based this assessment on variation in returns on investment.
While this does not mean it will always be so, the rating is as good as any to work with, for now. You can be assured that this is currently one of the lowest risk-rated funds you can find.
Keep in mind, there are no guarantees in this ETF. You may lose all the money you invest in it. The chances of that happening are just relatively low.
Performance of Vanguard Balanced ETF Portfolio (VBAL)
Amongst ETF portfolios, VBAL has quite a remarkable portfolio. Its low-risk nature ensures that investors have very little to fear when they invest in this ETF.
It is one of the ETFs that have relatively low drops in its value.
But this low-risk nature is also telling when it comes to returns on investments. The growth and rise in the value of VBAL stock is also quite small to be honest. It is only for the most patient of the investors.
VBAL’s fifty-two (52) week price difference is about 8.99%. This puts it at a value of $2.4700.
The corresponding market value high for this period is $25.4650 while its market value low is $24.9950.
VBAL’s NAV price has a fifty-two-week difference of 9.00%. Again, this is valued at 2.4729. The respective high and low values for this period is $27.2642 and $24.9913. All these values are all in Canadian Dollars (CAD).
VCN Vs VBAL Vs VGRO
Fist of all, VCN is Canadian only stocks ETF. Whereas, VGRO and VBAL are global index funds.
In other words, VGRO and VBAL both include stocks from the Canadian, United States, International, Developing economies, and bond markets.
The ideal scenario will be for you to choose between VGRO and VBAL based on your risk level of tolerance. During market volatility, VBAL is one such stock that will fluctuate less.
I’ll recommend three possibilities here, which is pretty good actually. The final choice is yours: Here we go
First Pick: Go with 100% VBAL in your portfolio
Second Options: If you don’t want to go for VGRO, go with 100% VGRO (Vanguard’s Growth ETF Portfolio)
Third Option: If you are still not satisfied with one and two options, then you can go with this combination – VCN + XAW + ZAG or something similar to this.
Do also note that, the 3rd option mentioned above is the Canadian couch potato model portfolio.
You’ll always have the option to set your bonds percentages at 15% or 20%, then the stock performance should be very close to that of VGRO or VBAL (we are talking about VCN here).
If you are new to the investing world, all three stocks are great picks. You can blindly go with any of the three mentioned here and can expect good investment growth.
My personal choice is to go with VBAL or VCN as the first choice. To invest you can use Robo-advisors like Wealthsimple Trade or Questrade. Both these are great investment platforms and especially Questrade in which buying/selling of ETFs if absolutely free).
What Else Do You Need To Know When Buying ETFs?
A commission may have to be paid every time you buy and sell units of the ETF. These commissions may vary from firm to firm. There are quite a few firms that offer commission-free ETFs
You will incur ETF expenses. You do not have to worry about paying this yourself. It will be paid by your returns on investment. This will reduce the value of your returns but not by much. ETF expenses are valued at about 0.25% of your returns. This means you pay $2.50 on every $1000 investment. It is more of a slight inconvenience more than anything
Other ETFs may have a trailing commission, but this doesn’t have. A trailing commission is a commission you pay for the services that your representative offers to you for as long as you own an account with them
Any income is subjected to tax. Income from this investment is not excluded. The amount you pay as tax is determined by the laws of your state. It is also affected if you are under a registered plan, such as a Tax-Free Savings Account. If you do not have them in a registered plan, distributions, whether withdrawn or reinvested are still subject to tax. They form a part of your taxable income
If you are looking for an investment that will earn you a moderate amount of income after a long while, then VBAL is for you.
If you are the kind of person that is interested in the stock market and believe you can handle its ups and downs. I will definitely recommend you to buy VBAL for its low-risk nature.
It does this while still giving you returns that are worthwhile.
You should also know that VBAL is a portfolio of ETFs that ranges across different asset classes and cuts across multiple regions and business industries. Investing in it is good for a start, as it offers you a much-needed exposure to the stock market while still keeping you relatively safe.
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- Amongst ETF portfolios, VBAL has quite a remarkable portfolio
- The fund focuses the majority of its investments in financials
- Vanguard has rated the Vanguard Balanced ETF Portfolio (VBAL) as a low to medium risk investment
- VBAL's fifty-two (52) week price difference is about 8.99%. This puts it at a value of $2.4700
Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.