As many investors would be aware, the ASX is a share market that is well-known for its dividend income potential. Most, if not almost all, of the top shares on the ASX boards pay out generous dividend payments every 6 months fairly consistently. Between BHP Group Ltd (ASX: BHP), the big four banks, and companies like Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW), there is no shortage of dividend payers at the top end of the ASX. And that's good news for exchange-traded funds (ETFs) like the Vanguard Australian Shares Index ETF (ASX: VAS).
VAS is the most popular ETF on the ASX, and by quite a mile too. It's also the only ETF that tracks the S&P/ASX 300 Index (ASX: XKO), which follows the largest 300 companies on the ASX. It does so by using a weighting determined by market capitalisation, meaning the largest companies (such as those listed above) on the share market have the most presence in the ETF.
Image source: Getty Images
VASt dividends from the Vanguard Australian Shares ETF
So if an investor wanted a single share offering broad exposure to ASX shares, but also healthy dividend income, is VAS a good choice?
Well, let's check out what kind of dividend distributions this Vanguard fund offers today.
So as an ETF, VAS is structured as a trust. That means that it has to pass on any dividends it receives over a year to its investors via distributions. In VAS's case, the WETF pays out these dividend distributions quarterly.
Its last four distributions (covering 2021) were as follows:
- 69.65 cents per unit for the quarter ending 31 December
- 140.73 cents per unit for the September quarter
- 55.64 cents per unit for the June quarter
- 77 cents per unit for the March quarter
That's a total of $3.43 per unit for VAS last year. Today, VAS units are going for $95.46 each. That gives this ETF a trailing yield of 3.59% at this pricing. Now many of the dividend shares on the ASX 300 Index only pay partially or unfranked dividends, so in turn, VAS's dividend distributions typically only come partially franked as well. But even so, that is the kind of yield that is currently on the table from the Vanguard Australian Shares Index ETF.
