Is Vanguard Australian Share ETF the best long-term investment?

Is the Vanguard Australian Share ETF (ASX:VAS) the best long-term investment for ASX shares for Australians?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Vanguard Australian Share ETF (ASX: VAS) is one of the most popular investments for Australian investors.

What is Vanguard Australian Share ETF?

It's an exchange-traded fund (ETF), which is a diversified investment which owns lots of different assets or shares. The advantage of ETFs is that they can provide attractive diversification for very low management fee costs.

This particular ETF is focused on ASX shares within the ASX300. It's invested in all of the ASX's large blue chips including Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP) and Westpac Banking Corp (ASX: WBC).

Why is it so popular?

Vanguard is a world leader in providing cheap investment options for investors. It can be hard to know which share to buy. It can be hard to beat the market. So why not just invest in the whole market?

The ETF has annual management fees of just 0.10% per annum, which is cheap even compared to industry super funds. The lower the fees the more of the net returns that are left with the investor, which makes a big difference with compounding.

Another attraction of the ASX share market is the relatively high dividend yield, partly because of franking credits and partly because Australian companies have a higher dividend payout ratio. It currently has a partially franked dividend yield of 3.8%.

Is it a good investment today?

Growth shares now make up a bit of more of the index than a few years ago with CSL and Macquarie Group Ltd (ASX: MQG) continuing to grow. This is better than owning banks, that's for sure. 

The ASX is close to its all time high, so if you won the lottery or inherited a large sum I wouldn't invest it all in one go right now.

It would be a decent option as part of a regular investment plan to ride the highs and lows of the ASX.

Should you invest $1,000 in Vanguard Australian Shares Index Etf right now?

Before you buy Vanguard Australian Shares Index Etf shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Vanguard Australian Shares Index Etf wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 6 March 2025

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. 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.

More on Index investing

ETF written on wooden blocks with a magnifying glass.
Index investing

Australian equities ASX ETFs set for record quarter

International turmoil has caused a surge in popularity for domestic equities ASX ETFs this quarter.

Read more »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

If I could only buy 1 ASX ETF, it would be this one

This ETF simply covers all bases...

Read more »

ETF written on wooden blocks with a magnifying glass.
ETFs

VAS vs VHY: Which is the better Vanguard ETF?

A higher yield isn't always the best choice.

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
Index investing

The Vanguard US Total Market ETF (VTS) is down 8% from its peak. Is it time to buy?

Like many index funds, VTS is looking cheap right now.

Read more »

ETF written on wooden blocks with a magnifying glass.
ETFs

Meet the 2 new Vanguard ETFs that just hit the ASX

Vanguard has something for everyone with these new funds...

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Index investing

Vanguard Australian Shares ETF (VAS): Should we be worried about CBA?

Has CBA grown too big for VAS' boots?

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Index investing

Is the Vanguard Australian Shares Index ETF (VAS) a buy at $105?

It can still be a good idea to buy index funds when they look expensive...

Read more »

ETF spelt out with a piggybank.
Index investing

2 reasons to buy the Vanguard MSCI Index International Shares ETF (VGS) today (and 1 not to)

This index fund is popular, but there's a big catch.

Read more »