Investing · ETF deep dive
VAB Vanguard Canadian Aggregate Bond Index ETF
The Vanguard flavour of the aggregate: slightly more provincial and AA weight, a whisper of global exposure, same 0.09% price.
Best for: Vanguard-household investors who want their bond sleeve to match their equity brand
Pros
- 0.09% MER, duration 6.9 years, YTM 3.7% — statistically a twin of ZAG/XBB
- Higher AA weight (34.3%) — marginally more provincial ballast
- Float-adjusted Bloomberg index with ~3% non-Canada diversification
Cons
- Characteristics published with a lag (April 30) vs BMO’s daily stats
- Smaller than ZAG ($7.4B vs $12.8B)
- Same duration math, same taxable-account problem as every aggregate
What's inside VAB
| Underlying fund | Weight |
|---|---|
| Credit quality: AAA 44.6% · AA 34.3% · A 12.4% · BBB 8.7% | 100.0% |
| Top 10 holdings: all Government of Canada bonds (largest 1.6%) | 16.0% |
~79% government-related (federal 33.7%, provincial/municipal 34.9%, agencies 9.8%) · corporate ~21% (Provider issuer table, Apr 30, 2026) · holdings as of April 30, 2026 (1,300 bonds)
The deep dive
VAB tracks Bloomberg’s float-adjusted Canadian aggregate rather than the FTSE Universe — a distinction without much difference: duration lands at 6.9 years and YTM at 3.7%, within rounding of ZAG and XBB. Its fingerprints: a heavier AA band (34.3%) from provincial weight, top-10 holdings that are all Government of Canada issues, and about 3% outside Canada (US and supranationals) that the FTSE funds don’t carry.
Choosing between the aggregate trio is a brand-and-bookkeeping decision, not an exposure one — if your equities are Vanguard all-in-ones, VAB keeps the statements tidy. The decisions that actually matter — duration dose, account placement, the GIC alternative — are the same regardless of which twin you pick.
The rest of the field
The rest of the field, one line each:
- ZAG — the $12.8B aggregate, 0.09% MER
- XBB — same index as ZAG, since 2000
- ZDB — the tax-aware aggregate for taxable accounts
- VSB — short-term (2.7yr duration)
- XSB — short-term (2.8yr duration), since 2000
- ZFL — long federal — 17yr duration, the rate bet
Frequently asked questions
What does VAB hold?
VAB holds 1,300 investment-grade Canadian bonds (Bloomberg float-adjusted) — led by Credit quality: AAA 44.6% · AA 34.3% · A 12.4% · BBB 8.7% at 100.0%, Top 10 holdings: all Government of Canada bonds (largest 1.6%) at 16.0% (as of April 30, 2026 (1,300 bonds)). Credit and sector mix: ~79% government-related (federal 33.7%, provincial/municipal 34.9%, agencies 9.8%) · corporate ~21% (provider issuer table, apr 30, 2026). Weights drift between rebalances — bloomberg global aggregate canadian float adjusted bond index · duration 6.9 yrs.
What does VAB cost?
Currently 0.08% management fee; 0.09% published MER (MER as of Dec 31, 2025). Canadian aggregate bond ETFs now cost just 0.09%–0.10% — specialty rungs more (ZFL 0.22%) — see the full comparison. At bond-level expected returns, every basis point matters: the MER calculator shows why.
Which account should hold VAB — and should it be a GIC instead?
Bond interest is fully taxed at your marginal rate, the least favourable treatment there is — so bond ETFs belong in an RRSP, RRIF or TFSA first (the deliberate exception is ZDB, engineered for taxable accounts). And before buying any bond fund for dated money, run the honest comparison: our live GIC table often pays more than a bond ETF's YTM with zero price risk — the fund's advantages are daily liquidity and gains if rates fall. The bonds guide walks the full decision.
The bottom line
Identical job to ZAG at the identical price, with a Vanguard badge. Flip a coin or match your equity provider; nothing real hangs on it.
This page is for educational purposes only and is not investment advice. Fund facts were verified at Vanguard Canada's published fact sheets and product pages on June 10, 2026; holdings and weights are point-in-time and drift between rebalances; published MERs may lag recent fee changes (MER as of Dec 31, 2025). We deliberately do not compare or project returns. Read the fund facts document before buying. See our methodology.