ASX shares are well known for their collective dividend prowess. Looking at the largest companies on the S&P/ASX 200 Index (ASX: XJO), five of the top six shares by market capitalisation currently have dividend yields above 3%. BHP Group Ltd (ASX: BHP) has a yield of above 9% right now. So it goes without saying that investors in a broad-based ASX shares exchange-traded fund (ETF), say, the Vanguard Australian Shares Index ETF (ASX: VAS), would expect some heavy dividends too.
Well, said investors won’t be too disappointed. Vanguard’s VAS ETF tracks the S&P/ASX 300 Index (ASX: XKO) rather than the ASX 200. But it is still more or less dominated by the same shares. Those dividend heavy hitters in BHP and the big four banks are at the top of the pile.
An index ETF like VAS works by holding a portfolio of shares mirroring the index the ETF is tracking. In VAS’s case, that is the ASX 300. But an ETF, as a trust structure, also has to pass on any dividends the portfolio received through to its investors relatively quickly.
The VAS ETF is about to hit the cash button
So let’s look at VAS’s dividend distributions, which include an upcoming payment.
Unlike most ASX shares, VAS pays out a quarterly dividend distribution. These occur to coincide with the quarters of the financial year. Since we are about to end the third quarter of FY2022 (on 31 March), the next payment is heading investors’ way. Let’s dig in.
So Vanguard has just released its upcoming dividend distribution schedule. It revealed that VAS investors will receive a quarterly dividend distribution of 199.8517 cents per unit on 20 April. The ex-distribution date for this payment is 1 April (no joke), so that means investors will have to own VAS units before this date if they wish to receive this payment.
Once this distribution is doled out in April, it will bring VAS’s annual dividend distribution to $4.66 per unit. On the current Vanguard Australian Shares ETF unit price of $97.42, that gives VAS a trailing yield of 4.79%.