Why I think the Vanguard Australian Shares Index ETF share price is a buy

I think the Vanguard Australian Shares Index ETF (ASX:VAS) share price is a buy with because of the recent share market weakness.

| More on:

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

I think that the Vanguard Australian Shares Index ETF (ASX: VAS) share price is a buy.

At the moment the Vanguard Australian Shares Index ETF share price is down around 17.5% from the pre-coronavirus selloff high. That's still a pretty large decline if you ignore where it was in March 2020. We don't have a time machine to go back to that price.

All we can decide is whether today is a good time to buy or not to buy the exchange-traded fund (ETF).

Things are certainly looking up compared to a couple of months ago. The infection numbers are very low across the country and not as many people are on jobkeeper as feared.

Perhaps that means that the Australian economy won't be as bad as expected? Let's hope so.

In that context, I think it's good to consider if the Australian share market is worth buying.

Is it time to buy Vanguard Australian Shares Index ETF?

At the moment the ASX banks like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) are at low share prices. It's a large reason why the Vanguard Australian Shares Index ETF share price is down as much as it is.

I've always said that I'm not a big fan of investing in banks. So being able to buy the ETF when the banks are a smaller allocation than before is attractive to me. I'd rather get more exposure to shares like CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG) and Wesfarmers Ltd (ASX: WES).

As time goes on it's growing shares like A2 Milk Company Ltd (ASX: A2M), Altium Limited (ASX: ALU), Aristocrat Leisure Limited (ASX: ALL), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) and Amcor Plc (ASX: AMC) that become a bigger part of the ETF.

We can't decide how much each share makes up of the Vanguard Australian Shares Index ETF, we can just buy the whole ETF at today's price. In the future the ETF may have shares like CSL, Wesfarmers and Xero Limited (ASX: XRO) at the very top of the holdings.

So, I think it could be a good idea to buy the ETF at a lower price, particularly as the Australian dollar is so strong right now. It means we can buy the earnings of shares that make earnings in US dollars, such as CSL, at a lower price in Australian dollars. I'd happily buy the Vanguard Australian Shares Index ETF today for the long-term.

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 owns shares of Altium. 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 Amcor Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of A2 Milk, Altium, Wesfarmers Limited, and Xero. 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 »