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Vanguard MSCI Index International Shares (Hedged) ETF (VGAD)

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/100889-2024-06-29-02:54.pdf
FUND MANAGER Vanguard Investments Australia
ASX Code VGAD*
APIR
ASSET CLASS EXCHANGE TRADED FUNDS
INVESTMENT STYLE The Fund provides exposure to many of the world's largest companies listed in major developed countries.
INVESTMENT PROFILE

The Vanguard MSCI Australian Small Companies Index ETF seeks to track the return of the MSCI Australian Shares Small Cap 
Index before taking into account fees, expenses, and tax. 

CURRENCY MANAGEMENT Hedged
INCEPTION DATE 18-11-2014
BENCHMARK MSCI World ex-Australia (with net dividends reinvested), hedged into AUD
FUND SIZE MSCI World ex-Australia (with net dividends reinvested), hedged into AUD
DISTRIBUTION FREQUENCY Half-yearly
NO. OF HOLDINGS 1000+
FEES 0.21% 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

High

Investor suitability

Investors seeking exposure to a diversified portfolio of international shares that is relatively unaffected by currency fluctuations.

RISK LEVEL High
INVESTOR SUITABILITY

Investors seeking long-term capital growth and some tax-effective income via exposure to a 
diversified portfolio of Australian equity securities, and who have a higher tolerance for the risks 
associated with share market volatility.

Risks

Title
Detail

Key Features

About the Fund

The ETF provides exposure to many of the world's largest companies listed in major developed countries. It offers low-cost access to a broadly diversified range of securities that allows investors to participate in the long-term growth potential of international economies outside Australia. The ETF is hedged to Australian dollars so the value of the Fund is relatively unaffected by currency fluctuations.

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 Vanguard MSCI Index International Shares (Hedged) ETF seeks to track the return of the MSCI World ex-Australia (with net dividends reinvested) hedged into Australian dollars Index, before taking into account fees, expenses and tax.

The Fund meets its investment objective by investing in the Vanguard International Shares Index Fund, forward foreign exchange contracts and futures traded on a licensed exchange. Vanguard may, at its discretion, commence investing directly in the securities that are, have been or are expected to be in the index.

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

Futures traded on a licensed exchange may be used to gain market exposure without investing directly in securities. This allows Vanguard to maintain the Fund's liquidity without being under-invested. Importantly, derivatives are not used to leverage the Fund's portfolio.

Index information

The MSCI World ex-Australia Index captures large and mid-cap representation across developed markets countries (excluding Australia) in the financials, real estate, information technology, consumer discretionary, health care, industrials, energy, consumer staples, materials, telecommunication services and utilities sectors.

The MSCI Hedged Indexes hedge each foreign currency in the parent index back to a home currency by notionally "selling each foreign currency forward at the one-month forward rate at the end of each month. To construct investable and replicable indexes, MSCI calculates the performance of the MSCI Hedged Indexes using foreign currency weights and corresponding foreign currency notional amounts as of two business days before the first calendar day of the following month.

The index is based on the MSCI Global Investable Market Indexes (GIMI) Methodology - a comprehensive and consistent approach to index construction that allows for meaningful global views and cross regional comparisons across all market capitalisation, size, sector and style segments and combinations. This methodology aims to provide exhaustive coverage of the relevant investment opportunity set with a strong emphasis on index liquidity, investability and replicability.

The index is reviewed quarterly - in February, May, August and November. The objective is to reflect changes in the underlying equity markets in a timely manner, while limiting undue index turnover. During the May and November semi-annual index reviews, the index is rebalanced and the large and mid-capitalisation cut-off points are recalculated.

Source: MSCI. For further information regarding the benchmark index values, returns and methodology, please refer to MSCI's website at www.msci.com