Vanguard Australian Shares High Yield ETF (VHY)
About this Fund
|FUND MANAGER||Vanguard Investments Australia|
|ASSET CLASS||EXCHANGE TRADED FUNDS|
|INVESTMENT STYLE||The Fund provides low-cost exposure to companies listed on the Australian Securities Exchange (ASX) that have higher forecast dividends relative to other ASX-listed companies.|
|INVESTMENT PROFILE||The Fund seeks to track the return of the Benchmark before taking into account fees, expenses and tax.|
|BENCHMARK||FTSE Australia High Dividend Yield Index|
|FUND SIZE||FTSE Australia High Dividend Yield Index|
|NO. OF HOLDINGS||Around 60|
Benefits of investing with Vanguard
Competitive long-term performance
Vanguard's investment approach provides investors with an efficient way to capture long-term market performance.
The Fund invests in a diversified portfolio of securities, which means the Fund is less exposed to the performance fluctuations of individual securities.
Low cost investing
The Fund has low ongoing fees as we strive to minimise the costs of managing and operating the Fund.
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.
About the Fund
The ETF provides low-cost exposure to companies listed on the Australian Securities Exchange (ASX) that have higher forecast dividends relative to other ASX-listed companies. Security diversification is achieved by restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company. Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.
What is an ETF?
An ETF is an Exchange Traded Fund, which is quoted for trading on the AQUA market of the ASX (in this case, it is the CDIs that are quoted for trading on the AQUA market of the ASX). Generally, these exchange traded funds comprise broadly diversified investment portfolios of either shares, bonds or real estate securities and are constructed using an indexed investment methodology.
ETFs seek to combine the best features of index managed funds and listed shares in one investment. Vanguard ETFs come with the benefits of low cost, broad diversification, transparency and tax efficiency due to low turnover of the underlying securities. However, unlike traditional index funds which are priced only once per day, ETF securities trade on a stock exchange so they can be bought and sold at any time during the trading day at prevailing market prices. ETFs carry certain risks (refer to the section 2. Risks' in the PDS for further details).
Who is Vanguard?
Vanguard Investments Australia Ltd (Vanguard) is a wholly owned subsidiary of The Vanguard Group, Inc. With more than AUD$6.9 trillion in assets under management as of 31 December 2018, including over AUD$1.2 trillion in ETFs; The Vanguard Group Inc is one of the world's largest global investment management companies. In Australia, Vanguard has been serving financial advisers, retail clients and institutional investors for more than 20 years.
How we invest your money
The Vanguard Australian Shares High Yield ETF 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 was not created by, and is not managed by, a related body corporate of Vanguard.
The Fund meets its investment objective by holding all of the securities in the FTSE Australia High Dividend Yield Index (at most times) 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.
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). The index is calculated on a before tax basis.
The securities in the index are selected from the companies included in the FTSE ASFA Australia 200 Index1 (Eligible Securities), a market capitalisation-weighted 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 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 approximately half of the float adjusted market capitalisation of the Eligible Securities are included. Lastly, diversification requirements are applied to restrict the proportion of the index invested in any one industry3 or company. At each review 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.