If you’re considering getting exposure to the Fixed interest – Australia sector, the Vanguard Australian Corporate Fixed Interest Index ETF (ASX: VACF) might be one ASX ETF to watch in January.
How the VACF ETF fits into an ASX portfolio
The Vanguard VACF ETF provides exposure to corporate bonds issued by Australia’s largest banks, financial institutions, and property trusts.
VACF might be used by investors to diversify an equity portfolio or to generate a regular income stream from the quarterly distributions this ETF offers.
VACF meets our minimum level for FUM
The Vanguard VACF ETF had $655.48 million of money invested when we last pulled the monthly numbers. Given VACF’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.
What about management fees and costs?
Vanguard charges investors a yearly management fee of 0.20% for the VACF ETF. This means that if you invested $2,000 in VACF 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.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our Vanguard VACF report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
[ls_content_block id=”4954″ para=”paragraphs”]
