Getting exposure to the Diversified ETF sector has never been easier thanks to ASX ETFs like the Vanguard Diversified Conservative Index ETF (ASX: VDCO). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review. So, here’s an overview of the Vanguard Diversified Conservative Index ETF (ASX:VDCO) ETF, plus how to take your research to the next level.
How the VDCO ETF could be used in portfolios
The Vanguard VDCO ETF provides investors with exposure to a portfolio of other Vanguard funds/ETFs. Meaning, it’s an ETF which invests only in other funds/ETFs — in this case, it only invests in funds managed by its own provider, Vanguard. This ETF gives investors exposure to multiple asset classes with a single purchase, and is designed to be a diversified portfolio in itself.
VDCO exceeds our minimum market cap (FUM) criteria
The Vanguard VDCO ETF had $114.77 million of money invested when we last pulled the monthly numbers. Given VDCO’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Diversified ETF sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
VDCO’s fees & costs explained
Vanguard charges investors a yearly management fee of 0.27% for the VDCO ETF. This means that if you invested $2,000 in VDCO for a full year, you could expect to pay management fees of around $5.40.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Bottom line
This is just a quick overview of the VDCO ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the VDCO ETF’s Product Disclosure Statement (PDS), available on the Vanguard website, or speak to your financial adviser. For another handy resource, take a look at our Vanguard VDCO report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
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