If you’re on the hunt for exposure to the Fixed interest – Australia sector, it could be worth adding the Vanguard Australian Corporate Fixed Interest Index ETF (ASX: VACF) to your ASX watchlist. Let’s take a closer look at this Vanguard ETF.
What is the VACF ETF used for?
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.
Keep an eye on FUM
The Vanguard VACF ETF had $675.1 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.
Fees and costs for investors
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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the VACF ETF. Before doing anything, take a look at our Vanguard VACF report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
