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High Yield Index Funds or Exchange Traded Funds?

Discussion in 'Exchange Traded Funds (ETF)' started by JIT, 2nd Jul, 2007.

  1. JIT

    JIT Well-Known Member

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    Hi everyone,

    Here's an index fund that invests in ASX 200 companies that are 'expected to pay above average franked dividends, excludes listed property trusts as they don't offer franking benefit'.

    Also, it distributes income monthly.

    Vanguard High Yield Australian Shares Fund - Vanguard Investments Australia Ltd

    Any thoughts on this, and does anyone know if there are any other index funds or exchange traded funds available that deliver a regular income like this?

    GSJ
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Monthly income is nice - but note that it doesn't pay out every month !!

    Here's the history: CPU History - Vanguard Investments Australia Ltd

    If you add it up, it distributed 7.4c/unit in 2004/05 and 7.6c/unit in 2005/06 ... which is going to be less than 7% total income each year. There are no performance guarantees for that income - and most of the past performance (30% is pretty good for 12 months) still comes from capital growth.

    If you are an index investor and want some decent income with potential for good capital growth, it's still a pretty good fund. Hasn't been running long enough to consider historical returns in down markets.
     
  3. Rod_WA

    Rod_WA Well-Known Member

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    The Vanguard HYAS fund vs ETFs was discussed in:

    http://www.invested.com.au/7/fully-franked-yield-14375/

    I have some of the Vanguard HYAS, and have been very happy with the distributions. They're heavier around dividend time, and there are indeed a number of months they don't pay divies, but the overall yield is pretty high.
     
  4. JIT

    JIT Well-Known Member

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    Thanks for the replies.

    I'm just surprised that this is the only index fund like this in Australia. I'm sure in the US they have a much bigger variety of index funds/ETF's.

    GSJ
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm sure they do ... I always hear a lot about index funds in the US and the Active Managed vs Passive Managed funds debate.

    The funds market here in Australia is somewhat different to that in the US I feel - although I'm not entirely sure what's behind that ... I suspect that compulsory superannuation here has a lot to do with developing a more robust funds management industry locally ??