ETF Vanguard ETFs now available on ASX

For those who have been awaiting the event, Vanguard ETFs are now available:



Vanguard Australian Shares Index ETF
Code: VAS
Tracks: S&P/ASX 300 Index
Fees: 0.27 %


Vanguard All-World ex-US Share Index ETF
Code: VEU
Tracks: FTSE All-World ex-US Index
Fees: 0.25 %


Vanguard US Total Market Shares Index ETF
Code: VTS
Tracks: MSCI US Broad Market Index
Fees: 0.07%

 

From a price/fee point this seems similar to the SPDR ASX200 ETF. Their fees are 0.286%.

I believe the SPDR ASX 200 ETF, actually buys all 200 shares. While the Vanguard ASX300 ETF, "employs optimisation techniques to select a representative sample of securities in the index, allowing for individual security
weightings to vary marginally from the index from time to time" and "Futures may be used to gain market exposure without investing directly in securities." (Page 8 of the PDS).

Does anyone know what kind of difference this makes?

 

I note that the Vanguard pays quarterly rather than half yearly compared to the Spydr. May help the cash flow

Rgds

kevinb

 

Hi Ashwright,

For the Vanguard Managed Funds the optimisation strategies are essentially buying the top 270 shares from the ASX300. The reasoning for this is that the bottom ASX300 stocks move in and out of the index resulting in additional costs (buying and selling stocks) and also potential Capital Gains issues, hence, remove the cause and avoid the problem.

Investing in Futures is a cheaper way than investing in the stocks themselves (ie, lower brokerage costs) which could give the same returns with lower transactional costs.

Cheers,

Dan

 

I could not see where VAS are planning to pay quarterly. Can you highlight this? It is not on the web site. Is it in the PDS? Also is there a Market Maker for the stock on the ASX to ensure liquidity? If I put in a high purchase price overnight, does this stock partake in the pre-open auction?

 

It does appear that the distribution will be quarterly - refer to link:

http://www.vanguard.com.au/shadomx/...1-5EF1-64E0-BBEB57761400&siteName=vanguardaus

Yes, there are a "obligatory" market makers in place - refer to link (toward bottom of page):

https://myasx.asx.com.au/products/etfs_etcs/types/australian_etfs.htm

Although not really offering much more than STW it is still welcome addition to our rather poor selection of local ETFs in Australia. I just wish ETFs would catch on here as they have overseas as they are a great way to trade/invest.

Cheers - Gordon

 

Hi,

Most traders would probably be using derivatives rather than an ETF due to lower trading costs and more bang for their buck.

Cheers,

Dan

PS This is general information. Speak to your FPA registered Financial Planner or ASX licensed stockbroker before making an investment decision.