MENU

Should you invest in Vanguard US Total Market Shares Index ETF (ASX:VTS)?

Vanguard US Total Market Shares Index ETF (ASX: VTS) is one of the most popular exchange-traded funds (ETFs) on the ASX with it being nearly $1.5 billion in size.

Vanguard is a world leader in providing low-cost index accessibility for investors in shares of businesses, REITs and bonds.

Indeed, this ETF’s annual management fee is only 0.04%. That’s one of the cheapest on the ASX. The lower the costs the more of the returns are left for us.

This ETF is invested in thousands of US-listed businesses. At the end of September 2018 it gave exposure to 3,680 holdings. This means it provides excellent diversification. There are few ETFs that have as many holdings.

The returns have been very good with this ETF due to the strong underlying performance of the biggest holdings like Apple, Alphabet (Google), Facebook, Amazon, Microsoft and Berkshire Hathaway. The performance for Aussie investors has also been helped by the weakening Australian dollar. Over the past five years it has returned an average of 19.41% per annum.

I like that you don’t have to worry about which shares to buy and hold with this ETF, it just adjusts the position sizes itself.

However, you wouldn’t buy this ETF for income. According to Vanguard, this ETF only has a dividend yield of 1.7%.

Foolish takeaway

If I were going to choose this ETF it would be for growth and better diversification, as I think it’s better in those two areas than an ASX ETF.

The holdings of this Vanguard US ETF are nicely split between technology, financials, healthcare, consumer services, industrials and so on. Whereas the ASX index is weighted to financials and resource shares with limited growth prospects.

Many of this ETF’s holdings are truly global businesses, so over the long-term I think this would be a better choice than Vanguard Australian Share ETF (ASX: VAS).

However, there are a few ASX shares out there that are growing revenue strongly, such as this fast-growing Aussie tech stock.

Motley Fool Australia Issues Rare "Double Down" Buy Alert

Scott Phillips has stumbled upon a little-owned stock he believes could be one of the greatest discoveries of his 25 years as a professional investor.

This is your chance to get in early on of what could prove to be a very special investment recommendation. Think about how many investing trends you've missed out on, even though you knew they were going to be big. Don't let that happen again. This is your chance to get in early.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!