Of all the exchange-traded funds (ETFs) on the ASX, there are very few that actually cover property assets. We Aussies love to talk about, invest in, and wax lyrical over property. And yet, it forms a rather small corner of the overall ASX share market.
There are still a few property focused-ETFs out there though. There's the SPDR S&P/ASX 200 Listed Property Fund (ASX: SLF) and the VanEck Australian Property ETF (ASX: MVA). But the most popular by far is the Vanguard Australian Property Securities Index ETF (ASX: VAP).
This property-focused ETF from Vanguard mirrors the S&P/ASX 300 A-REIT Index. As the name implies, this index tracks ASX-listed Real Estate Investment Trusts (REITs) according to market capitalisation. The provider tells us that it's designed to provide exposure to the retail, office, industrial and diversified property sectors.
So if you're invested in VAP, what kinds of investments are you actually putting your money into?
What's in your VAP?
Well, here's a breakdown of this ETF's current top holdings and their fund weightings (as of 31 October):
- Goodman Group (ASX: GMG) with a 25% weighting
- Scentre Group (ASX: SCG) with a 10.65% weighting
- Dexus Property Group (ASX: DXS) with a 7.94% weighting
- Mirvac Group (ASX: MGR) with a 7.55% weighting
- Stockland Corporation Ltd (ASX: SGP) with a 7.38% weighting
The ETF has a current total of 32 holdings, but those are the 5 most prominent. As you can tell, an investment in VAP right now constitutes a significant investment in Goodman Group alone, with its 25% weighting in the ETF. Goodman is a REIT specialising in industrial and commercial real estate.
It's made a name for itself as one of the most forward thinking real estate companies on the ASX over the past few years. It inked a deal with Amazon.com, Inc. (NASDAQ: AMZN) last year to host one of the e-commerce giant's warehouses. But Goodman has been working with Amazon for years now, likely helping to bolster its reputation with ASX investors along the way.
Scentre Group, another top VAP holding, is the Australian and New Zealand arm of the old Westfield Group. This REIT owns the Westfield shopping centres across these two countries.
Dexus, another REIT, is one that focuses on offices. Mirvac and Stockland are both diversified REITs, owning a collection of shopping centres, offices, industrial estates and retirement villages between them.
So that's what you're invested in if you currently own VAP units.
The Vanguard Australian Property Securities Index ETF charges a management fee of 0.23% per annum. It has returned 21.15% over the past year, as well as an average of 13.11% per annum over the past 10 years. VAP currenlty offers a trailing yield of 3.7%.
