Total number of VAS shares

Hi,

I'm very much still a beginner when it comes to investing in shares so please indulge my questions below, which may be a bit elementary.

According to the Vanguard Factsheet, VAS has:
- ETF size $1490.8 million
- Total fund size $9,402.6 million

(1) VAS is around $77/share at the moment. Does this mean there are roughly 19,361,000 individual VAS shares (calculated by dividing $1490.8 by $77/share)?

(2) Does this mean the index has $9,402.6 million worth of shares invested in its holdings?

(3) We obviously buy shares from other people who are selling. But do the number of individual shares increase and/or decrease over time or is it a set amount?

Please let me know if the premise of any of my questions is incorrect to begin with.

Many thanks,
Jay

p.s. Bought my first parcel of VAS and VGS shares this morning

 

to the best of my knowledge VAS the institutional fund and VAS the retail fund are both open ended ( no minimum nor maximum limits )

i gather you are a retail player ( like me ) so DRP shares are created by assembling more 'baskets ' of portfolio shares ( buying more company shares to make up the new units created as needed which would also allow convenient re-balancing if needed )

do the share numbers increase/decrease YES at least once a month ( see the ann. near the end/beginning of the month ) .

in the case of VAS , i believe they hold physical shares in each company ( some ETFs DON'T they use some sort of equivalent .. like possibly HVST )

your question maybe elemental but very important as well .

i bought into VAS in 2011 , and would strongly suggest you wait before adding , timing is very important here in 2011 we had a correction ( not a real crash ) and the share price of these babies slide dramatically .. which is brilliant if you want to by more , and a similar correction is due .. say sometime before the end of 2018

i have never held/researched VGS but please DON'T assume my answers on VAS apply to VGS these ETF beasties can be very different animals ( in both good and bad ways )

good luck

 

Thanks for your answers mate.

What did you mean by "see the ann. near the end/beginning of the month" ?

I can see there was a big dip 2011-2012 and again 2015-16. I was planning to put in say $1000 every 2 months for the long-term. Are you recommending I hold onto it all and put it in a bigger lump sum towards the end of 2018? (I will treat response as general discussion, and not specific advice of course )

 

3 November 2017 Vanguard Investments Australia Ltd, would like to report the ETF securities outstanding as at 31 October 2017 as follows:
ETF ASX CODE DATE ETF SECURITIES OUTSTANDING
Vanguard Australian Shares Index ETF VAS 31 OCT 2017 33,512,080
Vanguard Australian Property Securities Index ETF VAP 31 OCT 2017 12,516,061
Vanguard Australian Fixed Interest Index ETF VAF 31 OCT 2017 13,921,990
Vanguard Australian Government Bond Index ETF VGB 31 OCT 2017 2,883,778
Vanguard Australian Shares High Yield ETF VHY 31 OCT 2017 15,739,554
Vanguard MSCI Australian Large Companies Index ETF VLC 31 OCT 2017 1,230,818 Vanguard MSCI Australian Small Companies Index ETF VSO 31 OCT 2017 2,183,664 Vanguard FTSE Emerging Markets Shares ETF VGE 31 OCT 2017 2,361,109
Vanguard MSCI Index International Shares ETF VGS 31 OCT 2017 11,480,821
Vanguard MSCI Index International Shares (Hedged) ETF VGAD 31 OCT 2017 5,245,616 Vanguard FTSE Asia Ex-Japan Shares Index ETF VAE 31 OCT 2017 618,634
Vanguard FTSE Europe Shares ETF VEQ 31 OCT 2017 2,260,715
Vanguard International Fixed Interest Index (Hedged) ETF VIF 31 OCT 2017 3,296,867 Vanguard International Credit Securities Index (Hedged) ETF VCF 31 OCT 2017 2,520,213 Vanguard Australian Corporate Fixed Interest Index ETF VACF 31 OCT 2017 1,380,798 Vanguard Global Aggregate Bond Index (Hedged) ETF VBND 31 OCT 2017 40,000
The ETF securities outstanding refers to the ETF units that are currently on issue for trading on the Australian Securities Exchange. Please note that a daily Net Asset Value (NAV) price and the ETF basket are available on the Vanguard website vanguard.com.au/etf

now when and how much to buy can be a complex argument ( one i still wrestle with myself regularly )

IF you chose to participate in the DRP plan ( i do )

you are confronted with a dilemma every 3 months ( at least )
do i leave the cash in the bank or do i buy some extra in any dip leading up to the ex-div. date ( knowing the extra shares bought will help your accumulation via the DRP .

this question you must ask yourself for YOUR best results

since you plan to add often maybe buying an extra ( say ) $1k if there is a dip before the next ex-div. date ( early in Jan. 2018 ) leaving some cash in reserve in case the dip becomes a plummet . and VAS really can drop ). and if the price climbs and climbs you still have you cash where you might find a better home for

in 2011 ( when i was buying VAS ) VAS dropped from $59.70 in March 2011 down to $52.70 in December 2011 , and i was doing emergency fill-in work so i WASN'T getting the best prices during that period ( that was put an order in the market before shuffling off to the newest crisis and looking at my portfolio whenever i got home .. up to 24 hours later .. call it blind-man's guess trading )

MY strategy on VAS is to use it as an insurance against my poor stock selection ( i don't expect it to do anything more than follow the market , and lock in gains via the DRP on the way )

and the same time i was buying VAS i also bought VHY ( @ $49.65 ) and that has done very well if you calculate the extra shares via the DRP up 46% counting only the number of shares compared VAS up 31.1% over a marginally longer period .

one i am still looking for an entry price is MVW ( i do not hold this yet ) it tackles the index in a different way , but if the market REALLY crashes , it might be a nice alternative bet ( roughly 8u82 stocks but all at the same $value in the basket ( rebalanced two monthly ) so 1% BHP , 1% CBA but also 1% TWE 1% TAH etc. who knows which company has the skille to recover quickly from a train wreck .

keep up the research ( and questions) .. sometimes the tiniest things make a big difference

good luck

 

Vanguard are a little bit tricky with all this stuff, hopefully I recall correctly.

VAS (ETF), retail and wholesale funds all invest in the same underlying basket. This is why the ETF and fund sizes are different when quoted perhaps. Before fees and costs all three should have the same performance.

I only invest in the ETF so my understanding is there, units are created when you buy and sell by Vanguard (the market maker) who calculates what the cost of each share should be. You aren't actually directly buying from a person as you are buying a basket of shares, Vanguard will buy the shares in the underlying companies as required (simpler and cheaper with index trackers as no rebalancing is required). The underlying companies require a buyer and a seller and can generally be considered to have a fixed number of shares.

If inflows and outflows are the same between all three products then Vanguard doesn't need to buy or sell as both sides are balanced, reducing costs. Vanguard will pick up or sell off actual shares as and when required.

Hope there are some answers in there.

Many do feel the market is over heated right now. There was the same sentiment when the DOW was at 18k and look what happened.

I recall reading someone was waiting for VAS to go sub $60 a share about a year or two ago, it never did. Maybe it will maybe it won't.

Noone knows the future, there are many compelling arguments for DCA long term ignoring any market chatter.

 

Thanks @twisted strategies and @Hodor for your information and insights. Much appreciated!

 

probably i was unclear on re-balancing funds that use physical shares in their portfolios , face the odd anomaly .. say the TAH+ TTS merger the PRG ( or older UGL ) take-over , the S32 divestment by BHP as examples , the holding balance needs to change ( not earth shakers but maybe pesky ones .. say a new listing )

i can rack and stack or divest as i see fit but what about say BKL rocketing up the indexes somewhere in Vanguard is a computer working very hard to calculate the changes needed

jay seems willing to invest regularly so the main question is will he choose the use the DRP scheme ?

using the DRP scheme tilts the balance towards buying regularly ( and carefully ) using the dips within the period between div. payments if mildly attractive ( say looking for a 1 month low rather than a yearly low

 

At this moment, I haven't chosen to use the DRP scheme. I will reinvest the dividends though, just indirectly. I know I'm potentially missing out on a slight discount and not having to pay brokerage.

But looking at it another way, with the dividends I don't need to transfer as much from my IP offset account when I'm investing in more shares. Hopefully, the dividends will offset the brokerage. With CommSec, even if I invest monthly it'll cost $120p.a. in brokerage. Plus I've got a stack of brokerage-free trades for a few months as a newbie.

I like the DCA approach as Hodor alluded to, because, as you say, there will be dips. As Tony Robbins said in his book, drops in the market is like shares "on sale" time, as you can buy more for the same price. This is what my rationale/approach is at the moment anyway.

 

Jay ,

if not utilizing the DRP ( for a while )

do you need to restrict yourself two only two targets something like VLC ( or ILC ) might give an opportunity after 3 of the big 4 banks go ex-div ( Monday )

and then you can back to you preferred choices later

what is right for you is the correct choice , don't worry this investing game isn't as easy as it sounds just focus on learning better techniques ( for you )

 

Not a problem for cap weighted ETFs like VAS and VGS. The increase and decrease in share price accounts for the changes in weightings. This is one of the benefits of cap weighted ETFs, low expenses and no triggering of pointless capital gains events