To The Moon

🌟🌟🌟Vanguard Australian Shares Index ETF $VANGUARD AUST SHARES IDX ETF(VAS.AU)$ is Australia's largest ETF with Assets Under Management of AUD 18.17 billion and one of the most popular ETFs.  By offering broad exposure to the top 300 companies on the Australian Securities Exchange (ASX), VAS provides an affordable, diversified way to invest in the Australian share market.

What is VAS ETF?

VAS is an ETF managed by Vanguard Australia with a laser focus to track the performance of the S&P/ASX 300 Index.  This is a benchmark that represents a broad spectrum of the Australian equity market which includes the biggest and strongest bluechips companies to smaller, high growth companies.  Launched in May 4 2009, VAS has grown to become a cornerstone for many buy and hold investors.

The Top 10 holdings include Commonwealth Bank$COMMONWEALTH BANK OF AUSTRALIA(CBA.AU)$  , BHP GROUP $BHP GROUP LTD(BHP.AU)$  , CSL Ltd $CSL LIMITED(CSL.AU)$  , Westpac Banking $WESTPAC BANKING CORPORATION(WBC.AU)$  , National Australia Bank, ANZ Group, Wesfarmers, Macquarie Group, Goodman Group and Telstra Group. 

Financial services sector takes up 33% of the weightage with the Big 4 Australian Banks commanding a leading presence.  The next biggest sector is the Basic Materials sector with 18% weightage.  This includes BHP, Rio Tinto, Fortescue Metals Group, South32 Ltd, Lynas Rare Earths and Pilbara Minerals Ltd.

Healthcare is the 3rd largest sector in VAS with a weightage of almost 10%.  CSL is the largest Australian healthcare company with a global presence.  Then there is Resmed, Sigma Health and Pro Medicus Ltd.

Why invest in VAS?

Broad Market Exposure: VAS offers exposure to a diversified portfolio of Australian companies, reducing the risk associated with investing in individual stocks.

Low Cost Investing: One of the strongest selling points of VAS is its low management fee of 0.07% per annum, which helps investors keep more of their returns compared to other competing ETFs.

Long Term Capital Growth and Income :  VAS is great for investors who look for long term capital growth while also receiving dividend income with franking credits.  The current dividend yield is 3.5% paid every 3 months.  VAS will go ex dividend on July 1 2025 with a payable date of July 16 2025.

Passive Management : By tracking the S&P/ASX 300 Index, VAS uses a passive management strategy.  This means lower annual operating expenses and a reduced likelihood of under performance relative to the broader Australian market.

Considerations and Potential Risks 

No investment is without risk and VAS is no exception.  Here are some factors to consider before investing :

Market Volatility : Since VAS tracks the Australian share market, its value will fluctuate with market movements.  During periods of economic uncertainty or downturns, VAS may see significant price swings.

Economic Exposure : VAS is inherently tied to the performance of the Australian economy.  Changes in economic policy, global trade dynamics or domestic market conditions can impact its performance.

Long Term Horizon Required:  Like many Index based ETFs, VAS is best suited for investors with a long term outlook.

How VAS Fits Into A Portfolio:

For many investors, VAS serves as a foundational building block for a broader portfolio diversification.  Its low cost, diversified nature makes it an excellent option in achieving a balanced exposure, especially when combined with other assets or international ETFs. 

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