Is Vanguard Australian Shares Index ETF the best way to invest in ASX shares?

Vanguard Australian Shares Index ETF (ASX: VAS) is a popular ETF way to invest into ASX shares, is it the best way?

What is Vanguard?

Vanguard is a funds management business that is owned by its own investors. It was founded in 1975 and now has (or had) around AU$9.7 billion. It has 192 funds in the US, and 232 funds in markets outside the US. It’s a world leader in providing low-cost ETFs.

What does Vanguard Australian Shares Index ETF do?

It invests in 300 of the biggest businesses on the ASX. It gives investors the biggest exposure to the biggest shares like CSL (ASX: CSL), BHP (ASX: BHP) and CBA (ASX: CBA).

The ETF has a very low annual cost of just 0.10% per year. You don’t actually see that cost, it just comes of our investment balance with Vanguard. Which is exactly what all ETFs and fund managers do.

As the ASX 300 changes the Vanguard Australian Shares Index ETF will rebalance and buy more shares of some businesses whilst selling ones that get smaller. Sometimes a tiny business grows enough to enter the ASX 300 and kick out another business which has been falling.

One of the best things about ETFs is that it’s passive for the investor. Often the best approach with investing is simply to do nothing and ride the growth higher over the long term (whilst re-investing dividends).

Why choose this ETF over BetaShares Australia 200 ETF (ASX: A200)?

Some people may argue that BetaShares Australia 200 ETF is a better option because it has a lower annual fee of 0.07%. If finding the lowest fee today is your goal then the BetaShares one may be better. Both are good options. They both offer pretty high dividend yields, that’s for sure.

As the Vanguard Australian Shares Index ETF gets more investors on board it will be able to lower its fee further. Will BetaShares keep decreasing its cost? There’s no guarantee it will. Perhaps you just want to support Vanguard, which has an attractive ownership model.

I think there’s some benefit to be invested in the ASX shares ranked 201 to 300, even if the allocation is small. They provide more diversification. The ASX is far too focused on banks and resources for my liking. The smaller companies (and CSL) are the ones that are producing the long term growth for the ASX. I’d want to be invested in those growing shares. Though there are plenty of other ETFs out there that own growing businesses in them.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better?

Howdy, ASX investor.

I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask