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Here are 2 alternative ASX Vanguard ETFs to buy


Vanguard offers ASX investors lots of interesting exchange-traded fund (ETF) options to invest in.

You may already be aware of ones like Vanguard Australian Share ETF (ASX: VAS), Vanguard US Total Market Shares Index ETF (ASX: VTS) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

But there are some other ETFs offered by Vanguard that could be good alternative options:

Vanguard Australian Property Securities Index ETF (ASX: VAP) 

This ETF gives investors much bigger exposure (than typical ASX ETFs) to all of the large ASX property businesses that own and construct properties.

Some of its largest holdings including Goodman Group (ASX: GMG), Scentre Group (ASX: SCG), DEXUS Property Group (ASX: DXS), Mirvac Group (ASX: MGR), GPT Group (ASX: GPT), Stockland Corporation Ltd (ASX: SGP) and Vicinity Centres (ASX: VCX).

Property supposedly gives investor a more consistent return with the payment of rental returns and slower capital growth.

The ETF has an annual management fee of 0.23% per annum and it currently has a distribution yield of 4.4%.

Vanguard Australian Fixed Interest Index ETF (ASX:VAF)

This is an even more alternative option for investors. It allows people to invest in Australian bonds.

Over 90% of the ETF’s allocation is to government or government-related bonds, so almost all of the ETF is allocated to the safest types of Australian bonds.

But due to the falling interest rates the running yield offered by this ETF is 3.3%, but it has delivered a return of over 10% over the past year thanks to capital growth.

Bonds are supposedly one of the safest places that you can put your money, so it makes sense why you might want to invest some of your money in this ETF.

It has an annual management fee of 0.2%, which is very cheap for the fixed income space.

Foolish takeaway

There are quite a few average property businesses in the property ETF, I’d rather just pick the ones I want to buy myself. But getting bond exposure could be a decent idea if you want some asset diversification away from shares.

Where to invest $1,000 right now

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*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group and Vanguard MSCI Index International Shares ETF. 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.

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