The S&P/ASX 200 Index (ASX: XJO) has enjoyed a pretty solid month of returns as we traverse the second half of October on the ASX. Since Monday 20 September, the ASX 200 has added about 2.04%, rising from 7,248.2 points to the current 7,396.3 points at the time of writing. But how has the Vanguard Australian Shares Index ETF (ASX: VAS) performed?
VAS is, after all, the ASX’s most popular exchange-traded fund (ETF) by funds under management. But instead of tracking the ASX 200 Index, VAS instead tracks the S&P/ASX 300 Index (ASX: XKO). The ASX 300 is similar to the ASX 200, but spreads out its weightings across the largest 300 ASX shares, rather than the more concentrated 200 shares that the ASX 200 follows.
So over the same period as discussed above, the ASX 300 Index has returned 2.14%, slightly above the ASX 200’s 2.04%. Can we expect the same from VAS units?
Not exactly as it turns out. Since 20 September, VAS units have returned 0.79%. That’s well under both the ASX 200 and the ASX 300’s raw returns. So what’s going on here?
One possible explanation could be VAS’s most recent quarterly dividend distribution. This ETF forked out a monster payout just yesterday. VAS unitholders received a distribution worth $1.41 per unit, with the ETF going ex-distribution back on 1 October. This payment alone is worth a yield of 1.49% on the current VAS unit price.
Since the ASX 200 and ASX 300 are both raw share indexes, they don’t account for dividends in quite the same way as an ETF. As such, much of this seeming performance difference between VAS and the ASX 200 and ASX 300 could be put down to this dividend distribution.
VAS is one of the few ETFs on the ASX that tracks the ASX 300 Index, which could explain its enduring popularity. This ETF has managed to return a very pleasing 30.96% over the past 12 months, an average of 10.49% per annum over the past 35 years, as well as 10.67% per annum over the past 10 years.
Its largest holdings (in order of weighting) consist of Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB).
VAS charges a management fee of 0.1% per annum.