How the VAF ETF could be used in portfolios
The Vanguard VAF ETF provides investors with exposure to a portfolio of Australian Commonwealth Government bonds, state government bonds and bonds from treasury corporations, as well as some investment-grade corporate debt.
The VAF ETF could be used by investors when building out the core of a diversified investment portfolio. It may also be used by investors seeking a regular income stream from relatively safe assets, or those looking to diversify from equities.
VAF exceeds our minimum market cap (FUM) criteria
The Vanguard VAF ETF had $1468.74 million of money invested when we last pulled the monthly numbers. Given VAF’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.
VAF’s fees & costs explained
Vanguard charges investors a yearly management fee of 0.15% for the VAF ETF. This means that if you invested $2,000 in VAF for a full year, you could expect to pay management fees of around $3.00.
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.
Bottom line
This is just a quick overview of the VAF ETF. Before ‘testing the depth of the water with both feet’ so to speak, be sure to read the VAF ETF’s Product Disclosure Statement (PDS), available on the Vanguard website, or speak to your financial adviser. For another handy resource, take a look at our Vanguard VAF report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
