ETF Vanguard Australian Shares Index Fund and VAS

Discussion in 'Shares & Funds' started by Kelly88, 16th Apr, 2019.

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  1. Kelly88

    Kelly88 Well-Known Member

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    Hi,

    I've just heard about Vanguard Australian Shares Index Fund that you can buy through the webpage and contribute regularly through BPAY. Can someone please tell me the difference between this and other products, e.g. VAS ? Thanks.

    Kelly
     
  2. Ryan23

    Ryan23 Well-Known Member

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    I believe the difference is the fund allows bpay transfers with no brokerage however you need the intial investment of 5000 and there is a higher managment fee. VAS is like any other share on the stock market you purchase and pay brokerage however the managment fee is lower.
     
  3. geoffw

    geoffw Moderator Staff Member

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  4. Silverson

    Silverson Well-Known Member

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    Anyone know why the yields differ so much?
     
  5. Helen Le

    Helen Le Active Member

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    Thank you very much every one. Yes, the yields seem to be so much different with the managed fund is much higher. In general, which one do people prefer ? I am quite new to share to I am still not used to the way to buy it, it seems much easier with managed fund.
     
  6. Anne11

    Anne11 Well-Known Member

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    It’s the same fund. VAS’s underlying fund is the Australian Shares Index Fund:
    • Fund code APIR: VAN0010AU

    Investment Products

    Versus: VAS:

    Investment Products
    • Underlying fund: Vanguard Australian Shares Index Fund
    VAS fee is much lower at .14% however you will pay for brokerage each time you buy and sell, while the index fund fee is .75% for the first 50k invested.

    So if you intend to buy in 5k-10k allotments then it probably cheaper to buy VAS. However if you want to have regular PBay in smaller amounts then the underlying fund would probably be more suitable (not advice),
     
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  7. geoffw

    geoffw Moderator Staff Member

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    It's not the same fund. They are both based on the same index, the ASX200, but for whatever reason, the performance (apart from fees) has been different - 6.87% for the fund for the last 12 months v 4.45% for VAS. Performance has been similar for other periods however.

    The fund has been around a lot longer than VAS. It started before ETFs were a thing.
     
  8. Anne11

    Anne11 Well-Known Member

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    I stand corrected. It is not the same fund. However VAS uses the same underlying index fund. Better explanation here:

    Exchange traded funds (ETFs) | ASIC's MoneySmart

    If you read the two links I provided from Vanguard, the performance between the two are similar.
     
  9. sfdoddsy

    sfdoddsy Well-Known Member

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    There's a similar difference in yield between the wholesale and retail version of the fund too. Overall return is similar.
     
  10. pippen

    pippen Well-Known Member

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  11. Nodrog

    Nodrog Well-Known Member

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    The ETF VAS is simply another class of units invested in the Vanguard unlisted wholesale fund. Here’s the funds comparison. The ETF outperforms a little due to slightly lower fee (0.14% vs 0.18%):

    765FE0F6-B16C-44D4-9F14-E358E0BF644C.jpeg
     
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  12. pippen

    pippen Well-Known Member

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    Spoke with vanguard today, i noticed VDHG etf 12 month yield was 2.37% and turnover - in comparison to same unlisted wholesale fund with 12 month yield of 6.75% and 1.12% turnover. Consultant sent me an excel spreadsheet detailing the AMIT distributions and capital gains breakdown as per each fund.
     
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  13. geoffw

    geoffw Moderator Staff Member

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    Screenshot_20190418-140251.png Here's the side by side comparison from the Vanguard site (referenced in a previous post). It's the 12 month yield I'm questioning. Why is there a bug difference when just about everything else is identical?
     
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  14. sfdoddsy

    sfdoddsy Well-Known Member

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    What was the difference?
     
  15. pippen

    pippen Well-Known Member

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    Distributions and capital gains and fund flows through the funds
     
  16. Nodrog

    Nodrog Well-Known Member

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    It’s likely to do with AMIT as mentioned by @pippen. The wholesale fund due to AMIT has likely resulted in this fund paying out more income as capital gains vs the ETF which I think are generally less impacted due to their structure. Hence the distribution yield of the wholesale fund is higher. Total return which includes unrealised capital however should have been similar.

    That’s why I posted this “total return” comparison from the same tool / data you used:

    6909E7C3-B190-444D-A7CA-F62E68FDCAAD.jpeg

    I understand the objective of AMIT but it’s a pain in the arse in some ways.
     
    Last edited: 18th Apr, 2019
  17. Nodrog

    Nodrog Well-Known Member

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    :confused::)
     
  18. dunno

    dunno Well-Known Member

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    They are all based of the same underlying fund.

    The ETF and the Wholesale fund both show similar yields. The retail fund shows the higher yield.
    upload_2019-4-18_15-17-6.png


    Retail has semi-annual distributions; whilst the ETF and Wholesale are quarterly. My bet is this is the major cause - Retail calculation is on last two half's up to 31/Dec/2018 divided by last month’s closing price. ETF & Wholesale are last 4 quarters up to 31/Mar/2019 divided by last month’s closing price.

    Remaining small yield differences would be accounting. All are under AMIT but each vehicle might get slightly different income/capital adjustment recognition. Comes out in the wash (apart from tax implications) if you are indifferent to income vs capital. Best comparison is total return as @Nodrog points out. The main difference over time just comes down to fees, so avoid retail fund if possible.
     
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  19. Kelly88

    Kelly88 Well-Known Member

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    Thank you everyone. I am just starting to buy my first shares and I can spend a few thousands every month. What are the strategies you have if you have to start all over again and which shares do you buy ? Thanks.
     
  20. rizzle

    rizzle Well-Known Member

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    I'd go 50:50 split of ASX:VGS and ASX:VAS.

    Keep costs low with a broker like CMC or SelfWealth.

    Diversify across time, and try to buy in minimum $5k parcels so the brokerage isn't a drainer on overall returns.

    Biggest predictor of long term portfolio performance is diversification (across time, across geogrpahy, across companies) combined with low fees, which is why the vanguard low cost passive index funds always get recommended.

    Further reading: A random walk down wall street by Burton Malkiel.
     
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