How the VDHG ETF could be used in portfolios
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.
The VDHG ETF might be used by investors who are wanting a simple way to establish a diversified portfolio with an aggressive weighting towards growth assets. This ETF may suit investors with a high risk tolerance, a long investment time-frame, and a focus on capital growth over income. Vanguard offers a range of other diversified ETFs, including a balanced ETF (VDBA).
VDHG exceeds our minimum market cap (FUM) criteria
The Vanguard VDHG ETF had $1737.58 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.
VDHG’s fees & costs explained
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 0.51% 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.
Bottom line
This is just a quick overview of the VDHG ETF. Before ‘testing the depth of the water with both feet’ so to speak, be sure to read the VDHG ETF’s Product Disclosure Statement (PDS), available on the Vanguard website, or speak to your financial adviser. For another handy resource, take a look at our Vanguard VDHG report. You can also 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.
