VGRO: This All-in-One ETF Is Up 32% Since Inception
The Motley Fool
Published Apr 13, 2021 08:50
Updated Apr 13, 2021 09:16
VGRO: This All-in-One ETF Is Up 32% Since Inception
Investing in an exchange-traded fund or ETF is always beneficial to investors. An ETF provides you with enough diversification and lowers your risk significantly. Here, you gain exposure to a basket of stocks across multiple sectors. One Canadian ETF you can consider is the Vanguard Growth ETF Portfolio (TSX:VGRO).
This ETF is basically a fund of funds as each unit of VGRO consists of several other ETF holdings. This ETF aims to generate long-term returns by investing in equity and fixed-income securities.
Under normal market conditions, the ETF will maintain a long-term strategic asset allocation where equity will account for 80% of the total portfolio and the rest will be invested in fixed-income instruments. The underlying funds will be index funds that provide exposure to broad-based equity and fixed income markets.
VGRO ETF was introduced in January 2018 The VGRO ETF was launched back in January 2018 and has since gained 32.3%. Comparatively, the S&P 500 ETF is up 53.5% in this period. As the Vanguard Growth ETF Portfolio has exposure to fixed income securities investors should not expect it to beat the broader equity indexes, making it a top fund for Canadians nearing retirement.
The VGRO ETF has exposure to the below funds:
Vanguard US Total Market Index ETF: 32.9%
Vanguard FTSE Canada All Cap Index ETF: 24.1%
Vanguard FTSE Developed All Cap ex North America Index ETF: 16.7%
Vanguard Canadian Aggregate Bond Index ETF: 11.7%
Vanguard FTSE Emerging Markets All Cap Index ETF: 6.6%
Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged: 4.5%
Vanguard US Aggregate Bond Index ETF CAD-hedged: 3.5%
Stocks in the financial sector account for 19.2% of the VGRO ETF, followed by technology, consumer discretionary, industrials, and healthcare at 18.5%, 13.1%, 12.7%, and 8.6%, respectively.
This fund of funds holds over 12,600 stocks that have a median market cap of US$60 billion. As of February 28, 2021, the price to earnings multiple of VGRO was 22 while its price to book ratio stood at 2.3. Comparatively, the ETF’s return on equity stands at 13.7% while its earnings growth rate is a healthy 12.9%.
Top holdings of the Vanguard Growth ETF The VGRO ETF’s top holdings Shopify that accounts for 1.76% of the fund. The other top holdings include Apple (NASDAQ:AAPL), Royal Bank of Canada, Microsoft (NASDAQ:MSFT), and Toronto-Dominion Bank that account for 1.53%, 1.49%, 1.45%, and 1.35% respectively of the VGRO ETF. We can see that the top five holdings comprise less than 8% of the VGRO.
This ETF is one of the most diversified funds in the world. Investors do not have to rebalance their portfolio and can derive passive gains by buying the VGRO ETF. Further, you can also benefit from a dividend yield of 1.8% which means a $25,000 investment in this ETF will help you derive $450 in annual dividend payouts.
Get The App
Similar to other Vanguard Funds, the VGRO has a low management expense ratio of just 0.25%. Here, your risk is diversified across equities and bonds in different industries and geographic regions.
The post VGRO: This All-in-One ETF Is Up 32% Since Inception appeared first on The Motley Fool Canada.
Teresa Kersten, an employee of LinkedIn (NYSE:LNKD), a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Apple, Microsoft, Shopify, and Shopify and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2021
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.