By Jonathan Chevreau on February 27, 2026 Estimated reading time: 7 minutes

Why Vanguard’s ETF aimed at retirees is currently cautious in its asset allocation

By Jonathan Chevreau on February 27, 2026 Estimated reading time: 7 minutes

Vanguard’s VRIF ETF is tilting toward bonds to provide retirees stable income, balancing caution with a 4% annual payout target.

As a semi-retired investor who recently started a registered retirement income fund (RRIF), I regard exchange-traded funds (ETFs) from Vanguard Group as a major part of my core portfolio, along with low-volatility ETFs from BMO ETFs, and income-oriented ETFs from various other vendors.

After the Liberation Day craziness of April 2025, I became increasingly defensive, although my asset allocation is not (yet) to the point that would be recommended by the rule of thumb that your age should equal your fixed income. If that were the case, I should have 28% in equities and 72% fixed income, and I’m not (yet) quite that conservative. 

As we indicated in the previous column on the Purpose Longevity Pension Fund, I intend to live a long time (Lord willing); therefore, I also believe that stocks (at least quality dividend-paying stocks or ETFs holding them) should always account for at least half of an investment portfolio—even in retirement. 

A core fund for retirees is the Vanguard Retirement Income Fund, or VRIF, trading on the TSX. The ETF name describes exactly what it does and is one of several funds often mentioned by the Retirement Club (see this introductory blog on the Club co-founded by blogger Dale Roberts).

I started a position in VRIF soon after its launch in 2020. At the time, its asset allocation was roughly 50% stocks to 50% fixed income, spread around all geographies in the normal proportions; however, as 2025 proceeded I noticed that VRIF had begun to cut back on its equity exposure and raise its proportion of fixed income, almost to the point of 70% bonds to just 30% stocks. 

Semi-retired Globe & Mail financial columnist Rob Carrick mentioned this in his bi-weekly column late in January: “A big believer in bonds is the investing giant Vanguard, which last year took an unusual stance in suggesting a portfolio of 70% bonds and 30% stocks. The underlying thinking here is sound: stocks have soared and bonds are undervalued.” 

I’d also noticed various YouTube videos from Vanguard’s U.S. parent evince similar caution—a retrenchment from the big U.S. Growth mega cap stocks in favor of other developed and emerging economies around........

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