You might be sitting back and considering the Vanguard Diversified High Growth Index ETF (ASX: VDHG) and thinking that February could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
The Vanguard VDHG ETF provides investors with exposure to a portfolio of other Vanguard funds. Meaning, since the VDHG ETF invests in other shares, bond or cash ETFs, it gives you exposure to multiple asset classes with a single investment. In this way, VDHG is designed to be a diversified portfolio by itself.
VDHG’s FUM meets our hurdle
The Vanguard VDHG ETF had $524.17 million of money invested when we last pulled the monthly numbers. Given VDHG’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 Diversified ETF sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Pay attention to yearly costs & fees
Vanguard charges investors a yearly management fee of 0.27% for the VDHG ETF. This means that if you invested $2,000 in VDHG for a full year, you could expect to pay management fees of around $5.40.
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.
Our takeaway
If you’re thinking about investing in VDHG, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free Vanguard VDHG report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Diversified ETF sector to do a good comparison.
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