What does the VAF ETF do for a diversified portfolio?
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.
How big is the Vanguard VAF ETF?
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 ETF fees reviewed
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 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Next steps
Even if you like what you see, before diving straight into buying the VAF ETF, please read the ETF’s Product Disclosure Statement (PDS). Also, be sure to take a look at our Vanguard VAF report for a more comprehensive overview of this ETF. While you’re on our website, 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.
