Like us, you might have noticed the Vanguard Australian Government Bond Index ETF (ASX: VGB) and think that now could be a good time to consider taking a closer look. Here’s what ETF investors need to know.
1. What does the VGB ETF do for investors?
The Vanguard VGB ETF provides investors with exposure to a portfolio of Australian Commonwealth Government bonds, state government bonds and bonds from treasury corporations.
2. Funds under management (FUM)
The Vanguard VGB ETF had $546.16 million of money invested when we last pulled the monthly numbers. Given VGB’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 Fixed interest – Australia sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
3. Don’t forget about the fees & costs
Vanguard charges investors a yearly management fee of 0.20% for the VGB ETF. This means that if you invested $2,000 in VGB for a full year, you could expect to pay management fees of around $4.00.
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.
Now what?
These are just a few of the considerations or factors you would need to look at when running the rule over the VGB ETF. Before you go any further, take a look at our free Vanguard VGB report. And while you’re at it, don’t forget to search our complete list of ASX ETFs.
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