What is the VGAD ETF used for?
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.
Keep an eye on FUM
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.
Fees and costs for investors
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 0.5% 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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the VGAD ETF. Before doing anything, take a look at our Vanguard VGAD report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
