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Vanguard Diversified Conservative Index ETF (VDCO)

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/100881-2024-06-29-02:53.pdf
FUND MANAGER Vanguard Investments Australia
ASX Code VDCO*
APIR
ASSET CLASS EXCHANGE TRADED FUNDS
INVESTMENT STYLE

Investment strategy and investment return objective 
The Fund seeks to provide current income while seeking to maintain liquidity and a relatively stable capital value. The return 
characteristics of the portfolio are expected to be broadly in line with the Bloomberg AusBond Bank Bill Index.

INVESTMENT PROFILE The Fund seeks to track the weighted average return of the various indices of the underlying funds in which it invests, in proportion to the Strategic Asset Allocation, before taking into account fees, expenses and tax.
CURRENCY MANAGEMENT Active management
INCEPTION DATE 20-11-2017
BENCHMARK Conservative Composite Index
FUND SIZE Conservative Composite Index
DISTRIBUTION FREQUENCY Quarterly
NO. OF HOLDINGS
FEES 0.27% p.a.
STRUCTURE

Benefits

Benefits

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.

Diversification

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.

Risk level

Low

Investor suitability

Investors with a short to medium term investment horizon, seeking a steady source of income with some capital growth potential.

RISK LEVEL Low
INVESTOR SUITABILITY

Investors with a short to medium term investment horizon, seeking a steady source of income with some capital growth potential.

Risks

Title
Detail

Key Features

About the Fund

The ETF provides low-cost access to a range of sector funds, offering broad diversification across multiple asset classes. The Conservative ETF is biased towards income assets, and is designed for investors with a low tolerance for risk. The ETF targets a 70% allocation to income asset classes and a 30% allocation to growth asset classes.

Investment approach of the Fund

The Fund seeks to achieve its objective by employing a passive investment strategy that tracks the weighted average return of the various indices of the Underlying Funds in which the Fund invests, in proportion to their applicable Strategic Asset Allocation (SAA), before taking into account fees, expenses and tax.

The Strategic Asset Allocation (SAA) has been established to achieve investment risk and return outcomes commensurate with the respective risk profile. The SAA is strictly adhered to and deviations away from the target allocation are limited to no more than 2% for each asset class. Further information about the specific SAA for each Fund and their Underlying Funds is set out Sections 3 to 6 of the PDS.

Investment structure of the Fund

The Fund gains its investment exposure to the applicable asset class and index by investing into Underlying Funds. Each of the Underlying Funds are registered managed investment schemes, for which Vanguard is the responsible entity and investment manager. As responsible entity of the Underlying Funds, Vanguard is solely responsible for their management and administration.

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.

Mandate

How we invest your money

The Fund seeks to achieve its objective by employing a passive investment strategy that tracks the weighted average return of the various indices of the Underlying Funds in which the Fund invests, in proportion to the Strategic Asset Allocation (SAA) for the Fund, before taking into account fees, expenses and tax.

The Fund holds units in the following Underlying Funds:

  • Vanguard Cash Plus Fund
  • Vanguard Australian Fixed Interest Index Fund
  • Vanguard Global Aggregate Bond Index Fund (Hedged)
  • Vanguard Australian Shares Index Fund
  • Vanguard International Shares Index Fund
  • Vanguard International Shares Index Fund (Hedged)
  • Vanguard International Small Companies Index Fund
  • Vanguard Emerging Markets Shares Index Fund

Please see section 15 of the PDS for further information regarding the investment strategy and investment return objective of these Underlying Funds.

Vanguard may, at its discretion, commence investing directly in the securities that are, have been or are expected to be in the indices of the Underlying Funds (as opposed to investing in the Underlying Funds) or in different or other funds. Vanguard will notify investors if such a change occurs. For more information about the Underlying Funds and the indices that they track, visit the Vanguard website at www.vanguard.com.au

Strategic asset allocation

(Asset class: SAA / Range)

  • Cash: 10% / 8-12%
  • Australian fixed interest: 18% / 16-20%
  • Global fixed interest: 42% / 40-44%

Total income assets: 70% / 68-72%

  • Australian shares: 12% / 10-14%
  • International shares: 8.5% / 6.5-10.5%
  • International shares (hedged): 5.5% / 3.5-7.5%
  • International small companies: 2% / 0-4%
  • Emerging markets shares: 2% / 0-4%

Total growth assets: 30% / 28-32%