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Vanguard Australian Shares High Yield Fund

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/100084-2024-02-16-03:34.pdf
FUND MANAGER Vanguard Investments Australia
ASX Code
APIR VAN0104AU
ASSET CLASS EXCHANGE TRADED FUNDS
INVESTMENT STYLE

The Fund seeks to track the return of the FTSE Australia High Dividend Yield Index before taking into account fees, expenses and tax. The FTSE Australia High Dividend Yield Index is a real-time, dividend focussed index consisting of companies with higher forecast dividends relative to other companies listed on the Australian Stock Exchange (ASX).

INVESTMENT PROFILE

The Fund will hold or be exposed to most of the securities in the index, allowing for individual security weightings to vary marginally 
from the index from time to time.

CURRENCY MANAGEMENT Unhedged
INCEPTION DATE 14-06-2000
BENCHMARK FTSE ASFA Australia High Dividend Yield Index
FUND SIZE FTSE ASFA Australia High Dividend Yield Index
DISTRIBUTION FREQUENCY Quarterly
NO. OF HOLDINGS 30-50
FEES 0.35% p.a.
STRUCTURE

Benefits

Benefits

Benefits of investing in the Vanguard Australian Shares High Yield Fund

The significant features and benefits of investing in the Fund include:

  • Competitive long-term performance - Vanguard's investment approach provides investors with an efficient way to capture long-term market performance.
  • Diversification - The Fund provides exposure to a diversified portfolio of securities, which means the Fund is less exposed to the performance fluctuations of individual securities. This moderates the volatility of the portfolio and smooths out' investment returns over time. The Fund provides exposure to a wide selection of available securities in the relevant index, generally holding significantly more securities than most active funds with the same benchmark. From time to time, however, the number of securities in a given index may reduce due to factors such as index rebalancing.
  • Tax efficiency - Vanguard's buy and hold strategy means that securities are generally held within a portfolio over a long period of time. If certain securities are held for more than 12 months, any capital gain (if applicable) on the disposal of those securities may be reduced under the capital gains tax discount rules - a tax efficient outcome for eligible investors.
  • Low cost investing - The Fund has low ongoing fees as we strive to minimise the costs of managing and operating the Fund. The Fund typically has low portfolio turnover resulting in low trading costs such as brokerage and other transaction costs.

The significant features and benefits of investing with Vanguard include:

  • Stability and experience - The Vanguard Group, Inc. established the world's first index mutual fund for individual investors in 1976 and has been a leader in low cost index investing ever since. In Australia, Vanguard leverages the scale, experience and resources of our established global business. Investing in the Fund allows you to access the knowledge and skill of Vanguard as a specialist investment manager.
  • Client focus - The Vanguard Group, Inc. was founded on a simple but revolutionary idea - that an investment company should manage the funds it offers in the sole interest of its clients. From rigorous risk management to transparent pricing to plain talk communications, we put our clients' interest first.
  • Low costs - Investors can't control the markets, but they can control the costs of investing. Providing low cost investments isn't a pricing strategy for us. It's how we do business. Vanguard's scale also helps to keep costs low.

Risk Level - High

The potential for higher returns than lower risk investments, however there is the higher potential for below-average returns and/or some loss of capital.

Investor Suitability

Buy and hold investors seeking long-term capital growth, some tax-effective income, and with a higher tolerance for the risks associated with share market volatility.

RISK LEVEL High: The potential for higher returns than lower risk investments, however there is the higher potential for below average returns and/or loss of capital.
INVESTOR SUITABILITY

Buy and hold investors seeking long-term capital growth, some tax-effective income, and with a higher tolerance for the risks associated with share market volatility.

Risks

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Detail

Key Features

How Vanguard invests

While maintaining the objective of a fund, Vanguard tries to minimise the transaction costs associated with managing cash flows and making adjustments for index or benchmark changes.

Cash and liquidity management

To manage day-to-day transaction requirements such as investor withdrawals and collateral requirements, the Fund may maintain a variable balance of cash. To effectively manage this cash, the Fund may transact in cash equivalent instruments that aim to preserve capital and provide liquidity to the Fund.

Cash equivalent instruments include, but are not limited to, high quality short-term money market instruments and short dated debt securities such as government issued securities, government-related (semi-government) issued securities and repurchase agreements, where a high quality government or government related security is received or provided as collateral for the term of the agreement.

Derivative financial instruments A fund may utilise over-the-counter and exchange traded derivatives such as futures, forwards and swaps, to help achieve its investment objective. Derivative financial instruments may be used for the purposes of maintaining fund liquidity and managing market exposure. Derivative financial instruments will not be used to leverage the assets of the Funds.

Borrowings While the Funds' constitutions permit borrowing, Vanguard does not currently intend to borrow for the purposes of gearing. A Fund will only borrow where Vanguard believes it is in the best interests of investors to do so.

Mandate

How we invest your money

Investment strategy and investment return objective

The Fund seeks to track the return of the FTSE ASFA Australia High Dividend Yield Index before taking into account fees, expenses, and tax. The FTSE ASFA Australia High Dividend Yield Index is a real-time, market capitalisation-weighted index consisting of companies with higher forecast dividends relative to other companies listed on the Australian Securities Exchange ("ASX).

The securities in the index are selected from the companies included in the FTSE ASFA Australia 200 Index (Eligible Securities), a broad market index of ordinary and preferred equity securities listed on the ASX. Real estate investment trusts ("A-REITS) are excluded from the Eligible Securities.

The Eligible Securities are ranked according to each security's median 12 month forecast dividend yield (sourced from I/B/E/S - the Institutional Brokers' Estimate System) with companies not forecast to pay dividends in the next 12 months being eliminated.

Companies with the highest forecast dividend yield are included in the index until 50% of the float adjusted market capitalisation of the eligible securities is met.

Lastly, diversification requirements are applied to restrict the proportion of the index invested in any one industry or company. Industries are grouped according to the Industry Classification Benchmark ("ICB), a global standard developed by FTSE.

No more than 40% of the index can be invested in any one industry, and no more than 10% can be invested in any one company. The index constituents are reviewed on a half-yearly basis in June and December based on data from the close of business on the last trading day of the previous month. 

The Fund will hold most of the securities in the index, allowing for individual security weightings to vary marginally from the index from time to time. The Fund may invest in securities that have been removed from or are expected to be included in the index.

 

Asset Allocation

  • Australian shares 100%