Vanguard Australian SHares High Yield

What is VHY?

VHY is the ticket for Vanguard Australian Shares High Yield is listed on the ASX. VHY has a management fee of 0.25% and has 63 holdings. The ETF tracks the FTSE Australia High Dividend Yield Index. When compared to it’s popular counterpart Vanguard Australian Shares ETF, VAS the total performance is similiar but has a slight under performance. VHY has an annual performance of 7.19% per annum and VAS 7.95%. Of course this can just be an error with selective dates, a longer period may post different results.

We added VHY into our portfolio as we are focusing on income. We already hold Betashares Australian Shares ETF A200 in our core portfolio. We are hoping VHY will give us that extra 1-2% income versus A200 for the sacrifice of capital growth. 

Pros

• Quarterly Income
• Relatively stable distributions
• Great track record
• Capital Growth Possible
• Invests in quality income producing businesses

Cons

• Higher management fees than the normal ASX index
• Possible underperformance compared to ASX index
• High individual asset concentration
• Less diversity
• Most high paying ASX companies are Banks and Miners

Conclusion