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:
|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.
|Total assets under management:||$17 billion|
|Funds offered:||39 ETFs and 4 mutual funds|
|Headquarters:||Bay Adelaide Centre|
22 Adelaide St. West
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
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 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
Exchange: Toronto Stock Exchange
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 –
|1||Royal Bank of Canada|
|4||Bank of Nova Scotia|
|5||Canadian National Railway Co.|
|7||Suncor Energy Inc.|
|9||Bank of Montreal|
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 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.
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.
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 – Market Capitalization In Funds (Percentage-Wise)
I’ve listed below the fund allocation and percentage for VGRO ETF.
You Might Ask – What Are Large-Cap Funds?
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.
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