Vanguard FTSE Canada All Cap ETF VCN
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★
- Morningstar Category: Canadian Equity
- MER: 0.06%
Vanguard FTSE Canada All Cap ETF VCN 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 35%-41% of the portfolio over the past 10 years. That’s a higher share than the category average but on par with its Morningstar Canada Index category benchmark. Sweeping in mid- and small-cap stocks can present an edge when large caps fall out of favor.
This strategy weights stocks by market capitalization, which is 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 research of the crowd without incurring a lot of expenses. It also requires little turnover—a benefit enhanced further by index buffers, which cut back on trading and the costs that come with it.
The shape of this fund looks a lot like the average portfolio in the Canadian equity 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 the fund maximizes the impact of its cost advantage, which is a reliable engine for sound category-relative performance.
Sector-level concentration creeps in. Heavy stakes in financials (34% of assets as of August 2025) and energy (16%) 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 industries within them face challenges.
The fund outperformed its average peer by 1.43 percentage points annualized over the past 10 years through August 2025. 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.
