As an investment advisor, the Vanguard All-Equity ETF (VEQT) achieves one of the most common requests I get from clients – a simple, effective, and globally diversified investment solution. This is an ETF that doesn’t require constant monitoring yet still captures strong long-term returns.
1. Global Diversification in One Trade
VEQT provides exposure to over 13,900 stocks globally, all in a single ETF. That means by buying just one fund, you gain access to companies across Canada, the U.S., developed international markets, and emerging economies.
VEQT Holdings Breakdown:
- U.S. Equity – ~46.5%
- Canadian Equity – ~30.1%
- International Developed Markets – ~16.7%
- Emerging Markets – ~6.7%
This allocation ensures you’re not overexposed to any one economy, including Canada’s relatively small share of global market capitalization.
Why it matters: Studies show that globally diversified portfolios reduce country-specific risk and deliver smoother long-term performance.
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2. Strong Historical Performance
Since its launch in January 2019, VEQT has performed well, especially considering it has endured COVID-19 market volatility and inflationary pressure.
Performance (as of May 2025):
- 1-Year Return: +17.13%
- 3-Year Annualized Return: ~9.75%
- Since Inception (2019): ~11.94% annualized
Comparison: Over the same period, the average Canadian mutual fund has underperformed and often charges 10x the fees. VEQT’s low-cost structure enhances your net returns significantly.
3. VEQT All-Equity ETF gives Ultra Low Fees That Compound Over Time
Management expense ratio (MER) of just 0.24%, which is a fraction of the 1.5% to 2.5% MERs commonly found in Canadian mutual funds.
Let’s do the math:
- On a $100,000 investment, a 2% MER costs $2,000 per year.
- VEQT would cost just $240.
Over 20 years, assuming an average return of 8%, the fee difference alone could be worth tens of thousands of dollars more in your pocket.
4. Automatic Rebalancing = Hands-Free Investing with VEQT
Rebalancing your portfolio to maintain target allocations can be tedious and emotionally driven. VEQT eliminates this by automatically adjusting its asset mix as markets move.
This means if U.S. equities outperform for a period, the fund managers will sell some and reallocate to underweight areas like Canadian or emerging markets—a disciplined, emotion-free approach.
Benefit: You stay invested according to your plan without second-guessing market timing.
5. Get Exposure to Multiple Sectors and Market Caps with VEQT
This ETF isn’t just globally diversified—it also provides access to various sectors and company sizes:
Sector Breakdown (Approximate):
- Technology – 18%
- Financials – 20%
- Industrials – 12%
- Consumer Discretionary – 13%
- Healthcare – 9%
- Energy, Real Estate, Utilities, and others – 28%
Market Cap:
- Large Cap Stocks: 78%
- Mid Cap: 15%
- Small Cap: 7%
Why this matters: Sector and size diversification adds resilience to your portfolio, balancing growth with risk management.
6. VEQT Dividend Yield with Tax Efficiency
VEQT pays an annual dividend yield of about 1.5%. While not designed for income-focused investors, this adds a modest layer of return, especially in tax-advantaged accounts like a TFSA or RRSP.
Tip: For non-registered accounts, consider how foreign dividends may be taxed. Speak with a tax professional if unsure.
7. VEQT is Ideal for the “Set-It-and-Forget-It” Investor
VEQT is perfect for:
- Young investors with long horizons
- Busy professionals who want to grow wealth without managing multiple holdings
- DIY investors who want one-ticket diversification
- Retirement accounts that don’t require complex asset shifts
It’s also great for dollar-cost averaging (DCA), where you invest regularly (e.g., biweekly or monthly) without worrying about market timing.
When VEQT Might Not Be the Best Fit
No investment is perfect. It might not be ideal if:
- You want income generation over growth
- You need fixed-income exposure (e.g., retirees or risk-averse investors)
- You prefer to customize your global exposure or allocate more heavily to specific sectors
In these cases, consider Vanguard’s more balanced ETFs like VGRO (80/20) or VBAL (60/40).
Final Thoughts
VEQT stands out as one of the best all-equity ETFs for Canadians looking to build long-term wealth through a simple, globally diversified, low-cost portfolio. It offers institutional-level diversification for retail investors, with minimal effort.
If you’re ready to grow your investments without obsessing over market news or tinkering with allocations, this is a rock-solid foundation for your portfolio.
