Key Morningstar Metrics for Vanguard FTSE Canada All Cap Index ETF VCN
- : GoldMorningstar Medalist Rating
- : Above AverageProcess Pillar
- : Above AveragePeople Pillar
- : HighParent Pillar
- : Index FundIndex/Active
Vanguard FTSE Canada All Cap ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.
Tracking nearly the entire Canadian stock market makes this a well-diversified portfolio. It normally tallies around 200 holdings, the top 10 of which represented between 35% and 41% of the portfolio over the past 10 years. That’s usually slightly higher than the category average’s 35%. Sweeping in mid- and small-caps helps diversify the portfolio further, especially when large caps fall out of favor.
This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Its market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.
The shape of this index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category. Its average holding is a bit larger than the category average, but the portfolios sport nearly identical sector compositions and value-growth orientations. Mirroring the category norm indicates that this fund captures the full opportunity set available to its active peers. It also means that the fund maximizes the impact of its cost advantage, a reliable engine for sound category-relative performance.
Sector-level concentration creeps into this portfolio. Heavy stakes in financials (37% of assets as of June 2026) and energy (19%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.
The fund outperformed its average peer by 1.79 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.
Vanguard FTSE Canada All Cap Index ETF: Performance Highlights
The fund has capitalized on its low fee and low transaction costs by effectively tracking the Canadian stock market. Its 12.65% return outperformed its average peer in the Canada equity category by 1.79 percentage points annualized over the last 10 years through June 2026. The fund notched better risk-adjusted performance during that period.
The strategy’s performance closely follows the movements of the Canadian stock market, since it is always fully invested. All else equal, this strategy should outperform category peers that hold cash during market rallies, which holds back their returns. But no cash buffer also means that the strategy may lag similar peers when the market falls. That also means the strategy tends to fluctuate more than its average peer.
The strategy tends to favor the largest Canadian stocks and will perform best when those stocks soar. That’s been the case over the past decade or so. The market’s largest stocks, like Royal Bank of Canada and Shopify, have dominated the fund’s returns. However, it will lag peers that favor smaller companies if mid- and small-cap stocks outperform.
