1. Find out what the VGAD ETF invests in
The Vanguard VGAD ETF provides exposure to listed companies from developed markets around the world excluding Australia. This ETF is hedged to Australian dollars to minimise the impact of currency fluctuations.
The VGAD ETF could be used to build out the core of a portfolio and to diversify away from Australian equities. This ETF provides exposure to markets around the world while minimising the impact of currency fluctuations.
2. Has the ETF reached scale?
The Vanguard VGAD ETF had $1763.08 million of money invested when we last pulled the monthly numbers. Given VGAD’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 International shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
3. Watch the fees (and other costs)
Vanguard charges investors a yearly management fee of 0.21% for the VGAD ETF. This means that if you invested $2,000 in VGAD for a full year, you could expect to pay management fees of around $4.20.
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.
Where to from here in 2020?
So there you have it, three tips to weigh up the VGAD ETF. Before you go any further, take a look at our Vanguard VGAD report – it’s free. Then, to make sure you’ve covered all bases, don’t forget to search our complete list of ASX ETFs to compare your options. You can filter the search results according to sector, issuer, size and more.
