Vanguard Diversified High Growth Index ETF (ASX: VDHG) could be the best exchange-traded fund (ETF) for millennial investors to choose.
I’m not the biggest fan of the term millennials, but it encapsulates the age group that this ETF is really well suited for.
What is VDHG ETF?
It’s about giving investors low-cost access to a range of sector funds, offering a lot of diversification across many asset classes.
The cost is indeed very low. It has an annual management fee of 0.27%, which is very cheap for how much underlying diversification you get with this investment.
It’s invested across a number of other index funds:
Australian shares
International shares
International shares (currency hedged)
International small companies
Emerging market shares
Global bonds
Australian bonds
Most of the VDHG ETF is invested in growth assets, with around three quarters invested in the first three index funds (Australia, international and international hedged).
Why it’s such a good option for millennials
There are a number of great reasons to consider shares, which this ETF offers a lot of.
Diversification – Having all your money tied up in one property in one location isn’t diversified. But this ETF gives an abundance of diversification through all of the different index funds.
Low fees – It’s cheaper than most fund managers. And it certainly doesn’t come with the expensive property fees like stamp duty, real estate agent selling commissions, ownership fees and so on.
Timesaver – If you take the long-term approach with VDHG, it hardly takes any time at all. The initial investment and then just the annual tax return (which can be pre-filled). Easy!
Good returns – Obviously, the most important thing about investing is the returns. Over the last three years it has produced an average return per annum of 10.6%. That’s not the best ever, but considering it’s so diversified I think it has been a solid return.
