Vanguard’s VGRO is one of the best growth ETFs in the Canadian market right now. Now, the immediate question you may ask is “When there are 100’s of great ETFs out there in the Canadian market, why invest in VGRO? Why not invest in others? 

In this article I’ll try my best to answer all possible questions you may have regarding Vanguards growth ETF VGRO and why you should probably consider investing in this ETF. Let us look at all the factors that’ll make investing in VGRO not only great but why it is something you need to consider.

Also, let’s look dive deep into the Pros and Cons of the VGRO ETF from an investment standpoint and learn more about why I think it’s a very good investment for you in the long term. Now then, let’s get started. 

Why VGRO ETF?

First of all, one of the leading asset management companies in the world is Vanguard. As a result, it has over $6 trillion total assets in its possession and still growing.

Above all, It’s got total assets of 571.8 Million and its production and income rates are growing every day.

Before we actually begin talking about the VGRO ETF, let us quickly take a look at what the Vanguard’s official website has to say about VGRO – “Vanguard Growth ETF Portfolio seeks to provide long-term capital growth by investing in equity and fixed income securities”. And that’s exactly what VGRO has delivered to its investors in terms of performance. 

VGRO ETF is extremely well-diversified and invests your money in seven of the top-performing Vanguard funds making it extremely robust and high performance.

Also, VGRO yields an excellent dividend of 2.42% annually and pays out quarterly. There’s no denial of the fact that Vanguard’s ETFs are one of the best in the market; always and low-cost ETFs in Canada.

Lets’ look take a quick look at the performance of VGRO below (Over the years) –

As you can see from the above performance chart, VGRO has returned a staggering 17.77% to its investors for the past one year. That is way better than the average mutual funds or any industry leader ETF (sector-wise) returns over a similar time frame. Also, don’t forget the annual dividend of 2.72% which adds on top of this. Do you seriously need any more considerations to invest in this ETF? If you’re still not convinced read on. 

Vanguard Group As An Investment Firm 

Vanguard is one of the world’s largest and leading asset management companies, with more than $6 trillion in assets under management globally. It has 100’s of mutual funds and ETFs under its portfolios in each of the different sectors and risk types.

Below is a quick snapshot of Vanguard: 

Founded:1975
Total assets under management:$6.6 trillion
Funds offered:191 in the U.S., and 222 funds in markets outside the U.S.
Headquarters:Valley Forge, Pennsylvania, USA
Chairman and CEO:Mortimer J. Buckley
The number of employees:More than 17,600 worldwide.

Vanguard Investments Canada Inc.

Founded:December 2011
Total assets under management:$17 billion
Funds offered:39 ETFs and 4 mutual funds
Headquarters:Bay Adelaide Centre
22 Adelaide St. West
Suite 2500
Toronto, ON M5H 4E3
Managing director:Kathleen C. Bock
The number of employees:56

VGRO Growth ETF – Key Fund Facts 

Let’s now look at the VGRO ETFs Fund Facts – 

  • Inception date : 25-01-2018

  • Net assets: $490.9 M

  • 12-month trailing yield: NA

  • Distribution yield: NA

  • Dividend schedule: Quarterly

  • Distribution per unit: $0.217646

  • Eligibility: RRSP, RRIF, RESP, TFSA, DPSP, RDSP

VGRO Growth ETF Performance Since Inception 

Below is the chart representing the growth of the VGRO ETF since inception and how well it has performed over the years in terms of generating returns. 

VGRO

What Is VGRO’s Investment Strategy?

  • VGRO ETF Seeks to achieve its investment objective by primarily investing in equity and fixed-income securities. It may do so either directly or indirectly through investment in one or more exchange-traded funds managed by the manager or an affiliate or certain other investment funds.

  • In seeking to achieve the investment objective (under normal market conditions), the sub-advisor will strive to maintain a long-term strategic asset allocation of equity (approximately 80%) and fixed income (approximately 20%) securities.

  • The portfolio asset mix may be reconstituted and rebalanced from time to time at the discretion of the sub-advisor.

  • The underlying funds are expected to be index funds that provide exposure to broad-based equity and fixed income markets.

 

VGRO

VGRO Portfolio Types

1. Portfolio Well Diversified Globally

Like I said before, VGRO is very well diversified, In-fact it is the most diversified platform. Risk management here is pretty low too. It has five different diverse sectors as we discussed before.

2. Income Portfolio

VGRO Growth ETF has a specific Income Index. What it means is it has a fixed and very modest income rate. Different factors are considered while assigning this income stuff to the VGRO team. It has the lowest management fee of 0.22%. The risk rating is very low too!

3. Conservative Portfolio

It’s the second type of the VGRO ETF portfolio. It has a fixed income of 60%. Long term capital growth is provided here. One can invest directly or by indirect means. ETF has seven low index investment plans. This is best for those who want to invest in moderate or long term income growth. However, the management fee is the same as 0.22% and chances of risk are very low.

4. Growth Portfolio

This has a fixed 20 to 80% ratio of equity and fixed percentage respectively. It’s best for low to medium risk investors.

5. All Equity Portfolio

Here the portfolio has 100% of equity and 0% of fixed income. But the risk rate is increased from medium to high in this type of portfolio as its all equity. On the other hand, fees still remain at 0.22% as in other portfolio types.

VGRO Trading Information – TSX

Below is the trading information of the VGRO ETF – 

  • Ticker symbol: VGRO

  • CUSIP : 92207X105

  • SEDOL: BF7ML33

  • ISIN: CA92207X1050

  • Exchange: Toronto Stock Exchange

  • Currency: CAD

What Are The Fees Associated With VGRO ETF?

1. Management fee of 0.22%

2. MER (Management Expense Ratio) of 0.25%

Advantages (Pros) Of VGRO ETF

1. Cost-effective: VGRO portfolios are extremely low cost compared to others. Low-cost portfolios usually return big profits.

2. Assets management: Mix of assets are designed to meet the requirement of every investor.

3. Detailed diversification: Fixed markets of income and equity will help to bring a sustainable and risk-free return. That’s the dream of every investor.

4. Regular Maintenance: Folks at Vanguard VGRO always keep rebalancing the rates and Interest percentages. As a result, you save all the headaches and costs of the rebalancing stuff. 

VGRO ETF Holdings 

Below is the list of the top 10 Largest Holdings Of VGRO ETF – 

RankHoldings
1Royal Bank of Canada
2Toronto-Dominion Bank
3Enbridge Inc.
4Bank of Nova Scotia
5Canadian National Railway Co.
6Microsoft Corp.
7Suncor Energy Inc.
8Apple Inc.
9Bank of Montreal
10Amazon.com Inc

As you just saw, the top 10 holdings of VGRO are all the biggies in the industry and reputed blue-chip companies from the US and Canadian stock markets.

That means to only say that, all of your investments are pretty much safe in the short to the long run and keep growings growing over-time. Do remember that all of the big companies or blue chips make more profits over time, increasing dividends and thus return more to the fund houses or the investors at the end of the day. So, it is all good here!

VGRO Vs. VBAL Vs. VCNS

When you compare VGRO to the likes of VBAL and VCNS, which are other great picks when it comes to ETFs – The advantage you get with VGRO is that – almost 80% of the portfolio is made of equities or stocks and the rest 20% into bonds.

As a matter of fact, more weightage into the equities is always better if your intention is inclined towards faster investment growth. 

Again, it all depends on various factors of the individual investing – what kind of an investor you are, what is your age, risk appetite, how long is your investment plan, what are your other considerations. For example – A 50 year old investor may find ETFs with more exposure to Bonds to be safer for his risk appetite. Rite? That’s fair too. 

Therefore it all depends on what your individual choice is and where you want to park your hard-earned money. My only goal is to provide knowledge which will you along the path. I’m no expert here sitting and preaching things. 

At the end of the day, whether you’re going to pick VGRO, VBAL, VCNS or any others like XRE, XAW (different fund house), it’s your choice. Better have a complete understanding before you invest. Once you have invested always leave it for the long term. I mean long term in the sense at least for 3 years to give ample time for the investment to mature and grow over time. 

VGRO

VGRO ETF – Allocation To Underlying Vanguard Funds

Please read this information carefully, as it is super important. This is where things get interesting. In this section, I’ll talk about where exactly is VGRO investing your money into and how it grows. 

Fund NamePercentage
Vanguard US Total Market Index ETF32.1%
Vanguard FTSE Canada All Cap Index ETF24.0%
Vanguard FTSE Developed All Cap ex North America Index ETF17.9%
Vanguard Canadian Aggregate Bond Index ETF11.7%
Vanguard FTSE Emerging Markets All Cap Index ETF6.1%
Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged4.4%
Vanguard US Aggregate Bond Index ETF CAD-hedged3.8%

Did you notice how well VGRO is diversified into multiple sectors?

This is what I was talking about in the previous section. All of your hard-earned money is split across different portfolios across – The US Blue chips, Canadian Blue chips, Emerging markets – like Japan and India. By diversifying into multiple sectors – your money is not only that much safer but you gain the benefit of market fluctuation and currency hedging. 

In a nutshell, VGRO is well diversified across geographies and into multiple high performing funds of different sectors. 

So It’s definitely safer and sound, and you can definitely expect decent to excellent growth over the period of time. Please remain invested for a longer period of time, that’s how you can actually see the greater returns, by compounding. 

VGRO Dividend 

The annual dividend yield of VGRO ETF is 2.42%. This stock is currently trading at 26.90 CAD. Dividends are paid out on a quarterly basis. 

vgro

VGRO – Market Capitalization In Funds (Percentage-Wise)

I’ve listed below the fund allocation and percentage for VGRO ETF. 

Fund Allocation

Fund

Large

72.54%

Medium/Large

3.02%

Medium

12.40%

Medium/Small

5.33%

Small

6.70%

Total

100.0%

That’s 72.54% allocation into Large-cap funds. What more do you want me to say?

You Might Ask – What Are Large-Cap Funds? 

Large-cap funds or companies are the safest possible investments and your money is that much more likely to grow over time. Examples of large-cap companies In Canada are – RBC, CIBC, Enbridge etc. 

According to Investopedia – A large-cap (sometimes called “big cap”) refers to a company with a market capitalization value of more than $10 billion. Large-cap is a shortened version of the term “large market capitalization.” 

Market capitalization is calculated by multiplying the number of a company’s shares outstanding by its stock price per share. A company’s stock is generally classified as large-cap, mid-cap or small-cap.

Again Medium/Large cap 3% and the rest follows. 

VGRO Characteristics

The total number of stock holdings in the VGRO ETF is a staggering 12,143 stocks!

Out of that, we’ve only seen the top 10 large-cap holdings in the previous section. 

Do notice the Earnings Growth Rate – it is 8.27% which is seriously good!

 Fund
Number of shareholdings12,143
Median market cap1.0 B
P/E ratio12.8 x
P/B ratio1.4 x
Return on equity11.37%
Earnings growth rate8.27%

VGRO Market Allocation Exposure By Region

This is what I mean by saying VGRO is well-diversified geographically.

Over 70% of your money is invested in the US & Canadian stocks, with other major holdings in Japan, UK and China. 

Complete Stats below:

Market AllocationFund
United States40.4%
Canada30.6%
Japan5.5%
United Kingdom3.6%
China2.3%

VGRO Sectorise Breakup 

In this section, let us look at the sector-wise breakup for VGRO (I mean to say what sectors does this ETF invests your money in?)

SectorFund
Financials26.4%
Industrials13.4%
Technology12.1%
Consumer Services10.7%
Consumer Goods8.8%
Oil & Gas8.6%
Health Care7.8%
Basic Materials6.1%
Utilities3.5%
Telecommunications2.6%
Other0.0%
Total100.0%

Conclusion 

I’ve pretty much-covered everything about VGRO here, also mentioning few other great picks from the Vanguard fund house in this article. 

VGRO is really good for your investments – Be it in your TFSA’s, RRSP’s or brokerage. The kind of returns seen here are really good, also the overall objective of this ETF is robust with 75% of large-cap US and Canadian stocks.

Also, we saw that VGRO is globally diversified across multiple asset types and markets. 

Please share this article if it was helpful and also feel free to comment below and let me know your thoughts.

 

VGRO Growth ETF Review

4.75

Value For Money

5.0/5

Benefits

4.8/5

Rewards

4.5/5

Pros

  • Cost effective
  • Assets management
  • Detailed Diversification into assets

Cons

  • Management fee: 0.22%
  • MER : 0.25%

Sagar Sridhar

Sagar Sridhar Is a Personal Finance Blogger from Toronto, Canada.He is a Computer Science Engineer by profession and works in IT Industry. What started as a hobby, quickly turned into serious blogging and income.In this blog, Sagar passionately writes articles about Personal Finance, DIY Investing, Retirement, Stocks & ETFs, Frugal Living and much more. Do visit about page to know more about him.If you would like to get in touch, you can do so by emailing him at [email protected] and he'll get back to you at the earliest.

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Robert W.

I am kind of surprised to see Amazon on that list but really, I shouldn’t be given that it is 2019 and they are a powerful company. Great overview of VGRO. I came here expecting to have a few questions but I believe you answered them all in this article.