Market Research · Case Study
Understanding What You Own: A VEQT Scenario Analysis
The holding. VEQT is Vanguard's all-equity asset allocation ETF, trading on the TSX. It holds four regional Vanguard sleeves: US total market at roughly 45%, Canadian all-cap at about 30%, developed markets outside North America at 18%, and emerging markets at 7%. One ticker, one annual rebalance, approximately 13,850 underlying stocks across 50 markets, and a management fee of 0.17% per year following Vanguard's November 2025 fee cut. On the surface it is one of the simplest, cheapest all-equity wrappers available to Canadian investors.
What I look at before recommending it. Simple packaging does not mean simple exposure. Before I put VEQT into a client account, I want to understand what is actually inside it and how the fund will behave under different market conditions. That means pulling it apart by sleeve, identifying the structural bets embedded in the construction, and stress-testing it against historical scenarios. The model below is how I do that work.
The concentration flags worth naming. Three things stand out when you look at VEQT carefully. First, the Canadian weight is roughly 30%, which is about ten times Canada's share of global market capitalization. That is not a neutral global allocation; it is a deliberate home bias, and it is the single largest active bet in the fund. Second, everything outside the Canadian sleeve sits in unhedged foreign currency. A rising loonie quietly erodes the roughly 70% of the fund sitting in US dollars, euros, yen, and emerging market currencies, with no hedge in place. Third, the sector mix is led by financials at over 20%, ahead of technology, because the Canadian bank weight stacks on top of the US and international financial exposures. The Canada bet and the financials bet are partly the same bet, and it is worth saying that plainly to a client.
What the scenarios show. The preset scenarios in the model below are built from actual historical episodes. The 2022 rate shock is the instructive one: Canada fell only about 9% while the US and emerging markets dropped double digits, because energy and financials held up. The home bias and sector tilt actually paid that year. The 2008 and 2020 scenarios show the opposite dynamic, where a weaker loonie cushioned the foreign sleeves in Canadian dollar terms. The US mega-cap selloff preset isolates a different risk entirely: six names driving several percent of fund-level loss in a portfolio marketed as holding nearly 14,000 stocks. None of this makes VEQT a poor choice. It makes it a choice I understand before I recommend it.
Why I build these tools. A fund fact sheet will tell you the MER and the asset mix. It will not tell you how the fund moves when the Canadian dollar rallies, or what happens to the blended return when US mega-caps sell off independently of the broader market. Building the model forces precision. It also means I can show a client, in concrete numbers, what they are actually exposed to and under what conditions the fund will behave differently from a truly global benchmark. That is the standard at Maple Groove: understand the structure first, in numbers, before anyone's money is on the line.
This case study illustrates a research and analytical process and is provided for general information only. It is not investment advice and not a recommendation to buy or sell any security. All figures are approximate and subject to change. Please speak with a qualified advisor about your own circumstances.
Maple Groove · Equity ETF Model
What moves VEQT: by basket and by name
VEQT is four regional sleeves rebalanced to fixed targets. Shock a whole region, or move an individual mega-cap, and the blended return updates on the left while you work on the right. The result panel stays pinned so you never lose sight of the outcome while adjusting inputs.
weights and holdings as at 15 June 2026 (Vanguard factsheets, refreshed monthly on the 1st) · returns as at 15 June 2026 (YCharts)| Basket | Target | After shock | Drift | Rebalance |
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A negative rebalance figure is a sleeve the fund would sell, positive is one it would buy, to return to target: the mechanical trim-the-winner discipline. Single-name moves are not rebalanced here; this table reads the four sleeve weights only.
How the model works + data provenance
Scenario math. Each basket has a target weight and price shock; its return is the shock, optionally translated by the currency overlay for the three foreign sleeves as (1 + shock) × (1 − CAD move) − 1. Basket contribution is weight × return. Single-name sliders add an idiosyncratic move on top of the sleeve, contributing name weight × name move. The fund return is the sum of basket contributions plus single-name contributions, so moving Apple alone shifts VEQT by Apple's weight times the move.
Drift and rebalance. After a shock each sleeve becomes weight × (1 + return); renormalising gives the post-shock weight, and target minus post-shock is the rebalancing trade.
Concentration. Home-bias multiple compares the Canadian weight to Canada's roughly 3% of global market cap. Top-name weights are derived: each underlying fund's published top weight scaled by its sleeve weight in VEQT. They are estimates, editable, and should be confirmed against Vanguard's holdings file.
Data. Basket weights (early 2026): VUN 45.2%, VCN 29.8%, VIU 17.9%, VEE 7.1%. Management fee cut from 0.22% to 0.17% effective Nov 18, 2025; MER now roughly 0.20%. Sectors (ICB, Dec 31 2025): Financials 20.5%, Technology 16.0%, Industrials 13.2%, Consumer Discretionary 11.7%, Health Care 8.5%, Energy 8.5%.
Hedging. Confirmed unhedged: VEQT holds VUN, VIU, VEE and VCN. The hedged equivalents (VUS for VUN, VI for VIU) are not used, and no hedged emerging-market version exists, so all non-Canadian currency exposure is unhedged, per the funds' ETF Facts and prospectus.
Built for internal analysis. Weights and top holdings are approximate and drift daily; confirm against vanguard.ca before use.
VEQT (Vanguard All-Equity), XEQT (iShares Core Equity), XAW (iShares Core MSCI World ex-Canada), and the S&P/TSX 60 Total Return index. All rebased to $10,000 at Dec 31, 2019, the first common date for the set. Annual total returns, net of fees, distributions reinvested; 2026 is year-to-date to mid-June. Prior years: YCharts (as of June 15, 2026); cumulative lines are derived by compounding annual returns, so points are annual, not daily. For illustration only; confirm against fund providers. Past performance does not predict future results.
This page is for informational and educational purposes only. Nothing on this page constitutes investment advice, a recommendation to buy or sell any security, or a solicitation of any kind. The scenario models, performance charts, and analytical tools presented here are illustrative only and rely on approximate data that may be out of date. All figures should be confirmed against primary sources before any reliance is placed on them. Investing involves risk, including the possible loss of capital. Past performance is not indicative of future results. Please consult a qualified investment advisor to determine what is suitable for your specific circumstances. Maple Groove Wealth Planners of Designed Securities Ltd. is a member of CIRO and CIPF.