Is the VAF ETF worth watching in December?

If you’re considering getting exposure to the Fixed interest – Australia sector, the Vanguard Australian Fixed Interest Index ETF (ASX: VAF) might be one ASX ETF to watch in December.

How the VAF ETF fits into an ASX 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.

VAF meets our minimum level for FUM

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.

What about management fees and costs?

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

Before buying any ETF based on what you read here on Best ETFs, check out our Vanguard VAF report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.

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