You might be sitting back and considering the Vanguard Australian Shares Index ETF (ASX: VAS) and thinking that January could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
The Vanguard VAS ETF provides exposure to the largest 300 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
The VAS ETF could be used by investors to get exposure to a broad basket of Australia’s largest public companies, which are likely to grow their profit over time and pay regular tax-effective dividends to their shareholders.
VAS’s FUM meets our hurdle
The Vanguard VAS ETF had $10124.4 million of money invested when we last pulled the monthly numbers. Given VAS’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 Australian shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Pay attention to yearly costs & fees
Vanguard charges investors a yearly management fee of 0.10% for the VAS ETF. This means that if you invested $2,000 in VAS for a full year, you could expect to pay management fees of around $2.00.
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.
Our takeaway
If you’re thinking about investing in VAS, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free Vanguard VAS report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Australian shares sector to do a good comparison.
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