After covering some popular exchange-traded funds (ETFs) offered by BMO Global Asset Management, now we are taking a look at another giant fund manager in Canada, Vanguard Investments Canada Inc. or simply, Vanguard. The US branch of Vanguard boasts about 80 ETFs and the Canadian arm manages about 37 ETFs. In this article, we will focus on Vanguard Growth ETF; ticker symbol VGRO, listed in the Toronto Stock Exchange (TSX).

Vanguard came into Canada in 2011 and has been a leader in keeping investment costs lower than its peers. Since then, it has also grown to be one of the key players in the investment front in Canada with a sizable collection of ETFs and mutual funds. Vanguard Group is one of the largest investment firms in the world with over $9.1 trillion assets under management and over 30 million clients worldwide.

Vanguard Growth ETF (VGRO) is Vanguard’s primary ETF focused on long-term capital growth. To achieve this objective, VGRO invests heavily in growth stocks. It also invests a little in stocks that produce income to give returns to its investors.

According to Vanguard, the investment objective of VGRO is to;

provide long-term capital growth by investing in equity and fixed income securities.

Since there is little focus on generating income, VGRO has a minimal dividend yield. Although the fund has seen some impressive growth during its lifetime, its lifetime is only three years as of now. This is not sufficient time to evaluate the performance of a growth-focused ETF.

Quick Facts	VGRO.TO
Fund inception date	January 25, 2018
Net Assets (Sept 30, 2021)	$3 billion
Exchange	Toronto Stock Exchange
Annualized distributions yield	1.74%
Distribution frequency	Quarterly
Management expense ratio	0.24%
Account eligibility	TSFA/RRSP/RESP/RRIF/DPSP

Vanguard provides little information about the risk of this ETF possibly due to the fact that there hasn’t been enough time to measure its vitals and compare against the market performance. Vanguard only provides the standard deviation of the fund (appx. 12%) which seems excellent (the lower the better). However, this alone is not enough to determine the risk of the fund. But, considering VGRO’s holdings we can assume a Low-Medium risk for this ETF.

Vanguard Growth ETF (VGRO) Holdings

As of this article, VGRO has around 80% of its assets allocated to equity or stocks and the remainder allocated to bonds.

VGRO’s bonds produce the incomes for the fund. Bonds have considerably low yields since the risk is at a minimal level. So, the ETF itself provides minimal income to investors. However, the objective of the fund is long-term capital appreciation.

The holdings of VGRO are simple at a glance. It holds 4 ETFs of Vanguard focused on growth and 3 ETFs focused on bonds. However, within these 7 ETFs are around 13,330 individual holdings to achieve its objective. Below are the full list of ETFs VGRO holds at the time of this article.

Holding Name	Weightage
U.S. Total Market Index ETF	34.12%
FTSE Canada All Cap Index ETF	24.0%
FTSE Developed All Cap ex North America Index ETF	16.13%
Canadian Aggregate Bond Index ETF	11.75%
FTSE Emerging Markets All Cap Index ETF	5.92%
Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged)	4.48%
U.S. Aggregate Bond Index ETF (CAD-hedged)	3.61%

Within these 7 ETFs, the fund is allocated among 81% large-cap companies, 8% small and medium cap companies. 42% of the assets are allocated in the USA, 30% in Canada, 4% in emerging markets (specifically in China and Taiwan), and 8% in Europe.

Sector-wise, VGRO allocated around 20% of assets in the financials and technology sectors each. Another 13% invested in consumer discretionary and industrial sectors each.

On the bonds side, VGRO allocates about 74% of assets to the government and government-related institutions. These can be considered some of the safest income-producing investments ever. The majority of the balance bonds are of different corporates. Together, about 67% of these bonds have an average maturity period of 1 – 10 years.

On the equity side, some of the biggest holdings in VGRO ETF are; Apple Inc., Shopify Inc., Microsoft Corp., Royal Bank of Canada, TD Bank, Amazon.com Inc., Enbridge Inc., Bank of Nova Scotia, and so on.

All of these holdings represent very good investment options.

Vanguard Growth ETF (VGRO) Performance

As mentioned before, VGRO is only three years old. There is not enough time lapsed to evaluate the ETF’s performance towards its main objective – growth. Short-term fluctuations could be attributable to abnormal market conditions (which we have seen plenty in the last couple of years due to the global pandemic).

During its three years of existence, VGRO has produced returns of 36%, which is quite high. An investment of $10,000 in 2018, would have grown into $13,625 by September 2021.

This is a pretty impressive growth chart for a short time period, which is not necessarily a good thing for a long-term growth-focused ETF.

Is VGRO ETF for You?

If you are an investor who has a long time period to see your money grow over time, VGRO might be a good option for you. The underlying ETFs and holdings of VGRO are very solid and definitely can grant the investors the growth they seek. One downside of VGRO ETF is that there is little focus on emerging markets which can provide real accelerated growth. However, emerging markets carry a lot of volatility, thus risk. VGRO keeps risk quite low as well.

Check out the latest information about the fund on Vanguard.

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Disclosure: Any information given in this article is not to be construed as investment advice. You must do your own research before investing any money in the stock market. All investments carry inherent risks even with the possibility of losing all your money.