The Vanguard Balanced ETF Portfolio or VBAL debuted on the 25th January 2018. Vanguard is a global asset management giant with assets worth over $6 trillion under its management. It’s no surprise that this is an international company.
The company is a force to be reckoned with in single fund solutions. They have an advantage over almost every other competitor. Vanguard has managed to gain over $1 trillion in assets under management in this regard. If you’re looking to invest, Vanguard should be on your list to check out.
Since VBAL’s inception, the company has acquired nearly $1 billion in net assets. In addition, VBAL has a period of twelve (12) months current yield of approximately 2.22% on investments.
Here is my personal view on investing in VBAL. If you’re 30 or older, buying more VGRO stock will make more sense than VCN or VBAL. When you are 45 years old, you can start with VBAL or VCN. When you are 55 and older, you can purchase VCN exclusively.
Remember, you always have the option to reduce your volatility over the years as you get older. Always remember to hold investments for long periods of time, 3 to 5 years. This is when you can actually see decent gains. You should also know that the company has five asset allocation ETFs.
Wallets are all-in-one wallets. This does not mean that any particular portfolio is a limit. You can rest assured that whatever portfolio you choose, there are always plenty of ETFs to invest in.
Among these portfolios or funds, I will look at the Vanguard Balanced ETF portfolio.
Vanguard Balanced ETF (VBAL) Portfolio Overview
To make things clearer, I will explain what a tracking yield is. A current return boils down to 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%. Please note that this return is presented as a single distribution from the fund and not as the total return on investment of the fund. Dividends from this fund are shared quarterly.
Those who are eligible for this portfolio include those who hold a Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP), Tax-Free Savings Account (TFSA), Deferred Profit Sharing Plan (DPSP), and Registered Disability Savings Plan (RDSP). If you operate on one of these plans, you may be eligible to purchase this ETF portfolio.
What does the Vanguard Balanced ETF (VBAL) invest in?
The ETF aims to generate capital growth over a long-term period. It also aims to generate moderate income by investing in stocks and fixed income securities.
The fund concentrates the majority of its investments in financial stocks. There are also investments in industrial, technology and consumer services. This majority of investments totals approximately 63% of the funds’ investments. The remaining 37% is split between consumer goods, oil and gas, healthcare, basic materials, utilities and telecommunications. Financials alone represent 26.2% of these investments. The data provided should help you understand where your investments are likely to go and help you monitor your investments.
Vanguard Balanced ETF Portfolio (VBAL) Price
The market price of VBAL is currently $26.2250 (CAD). This NAV price list is as of March 2 close.
The NAV price, which is the price per share of the fund, is $26.2458. This price list is also closing on the same day. Both prices saw an increase in value that day. The market price increased by $0.39 and the NAV price decreased by $0.2917.
Vanguard Balanced ETF (VBAL) Portfolio Risk Rating
As with any ETF, the valuation may vary depending on current market conditions. The best way to determine the risk level of an investment is to check the return on investment. The greater the change or variation in the value of returns, the riskier the investment.
Vanguard has classified the Vanguard Balanced ETF Portfolio (VBAL) as a low to medium risk investment. They based this assessment on the variation in investment returns.
While that doesn’t mean it will always be this way, the rating is as good as any to work with, for now. You can rest assured that this is currently one of the lowest risk funds you can find.
Keep in mind that there are no guarantees in this ETF. You risk losing all the money you invest in it. The chances of this happening are relatively low.
Performance of the Vanguard Balanced ETF Portfolio (VBAL)
Among ETF portfolios, VBAL has a pretty remarkable portfolio. Its low-risk nature ensures that investors have very little to worry about when investing in this ETF.
This is one of the ETFs that drops relatively little in value.
But this low-risk nature is also telling when it comes to ROI. To be honest, the growth and rise in value of VBAL stock is also quite weak. This is reserved for the most patient investors.
VBAL’s price difference over fifty-two (52) weeks is approximately 8.99%. This puts it at a value of $2.4700.
The corresponding maximum market value for this period is $25.4650, while its minimum market value is $24.9950.
The VBAL price of VBAL has a difference of 9.00% over fifty-two weeks. Again, this is valued at 2.4729. The respective high and low values for this period are $27.2642 and $24.9913. All of these values are all in Canadian dollars (CAD).
VCN vs. VBAL vs. VGRO
First of all, VCN is a Canadian stock-only ETF. While VGRO and VBAL are global index funds.
In other words, both VGRO and VBAL include stocks from the Canadian, US, international, developing economy and bond markets.
The ideal scenario will be that you choose between VGRO and VBAL based on your risk tolerance level. In times of market volatility, VBAL is one of those stocks that fluctuates less.
I’m going to recommend three possibilities here, which is pretty good actually. The final choice is yours: here we go
First choice: opt for 100% VBAL in your portfolio
Second option: if you don’t want to go for VGRO, go for 100% VGRO (Vanguard’s Growth ETF Portfolio)
Third option: If you are still not satisfied with one or two options, you can go for this combination – VCN + XAW + ZAG or something similar.
Also note that the third option mentioned above is the Canadian Couch Potato Model Wallet.
You will always have the possibility of setting the percentages of your bonds at 15% or 20%, the stock market performance should then be very close to that of VGRO or VBAL (we are talking here about VCN).
If you’re new to the world of investing, all three stocks are great choices. You can blindly opt for any of the three mentioned here and you can expect good investment growth.
My personal choice is to go with VBAL or VCN as my first choice. To invest, you can use robo-advisors like Wealthsimple Trade or Questrade. These are two excellent investment platforms and in particular Questrade in which the purchase/sale of ETFs is absolutely free).
What else should you know when buying ETFs?
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A commission may have to be paid each time you buy and sell units of the ETF. These commissions may vary from company to company. Many companies offer commission-free ETFs
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You will incur ETF expenses. You don’t have to worry about paying for it yourself. It will be paid for by your returns on investment. This will reduce the value of your returns, but not by much. ETF expenses are valued at approximately 0.25% of your returns. This means you pay $2.50 on every $1,000 investment. It’s more of a slight inconvenience than anything else.
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Other ETFs may have a trailing commission, but this is not the case. A trailing commission is a commission you pay for the services your representative provides to you for as long as you have an account with them.
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All income is subject to tax. Income from this investment is not excluded. The amount you pay in taxes is determined by your state’s laws. This also applies if you are subscribed to a registered plan, such as a tax-free savings account. If you don’t hold them in a registered plan, distributions, whether withdrawn or reinvested, are still subject to tax. They are part of your taxable income
Last words
If you are looking for an investment that will earn you a moderate income after a long period of time, then VBAL is for you.
If you are the type of person who is interested in the stock market and believes you can handle its ups and downs. I will definitely recommend you to buy VBAL for its low-risk nature.
It does this while giving you returns that are worth it.
You should also know that VBAL is an ETF portfolio that spans different asset classes and covers multiple regions and industries. Investing in this fund is a good start, as it gives you much-needed exposure to the stock market while keeping you relatively safe.
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