The Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular exchange-traded fund (ETF) on the ASX. And by quite a large margin too. That's despite this fund having a pretty difficult year in 2022 thus far.
Since the start of the year, the Vanguard Australian Shares ETF has lost a nasty 14.1% of its value. It has fallen from just over $97 a unit to today's $83.37.
This ETF's unit price performance has been disappointing. But the same can't be said for its income payments.
The Vanguard Australian Shares ETF is an index fund that tracks the S&P/ASX 300 Index (ASX: XKO). As such, it holds an underlying portfolio of the 300 shares that make up said index. In their respective weighted-by-market-capitalisation proportions, of course.
This means that the largest ASX shares by market cap, such as BHP Group Ltd (ASX: BHP), are also the shares that have the most weight in the ETF.
Since many (if not most) shares in the ASX 300 index pay dividends, the Vanguard ETF does too. As a trust, an ETF is required to pass on any income it receives to its beneficiaries (in this case, investors).
Record dividend payments coming from the Vanguard Australian Shares ETF
So when it comes to this dividend distribution income, the past 12 months have been very rewarding indeed. Vanguard Australian Shares ETF units have now doled out a total of approximately $6.30 per unit in dividend distributions. That's including the most recent distribution of $1.45 per unit (paid out this past Tuesday).
That far exceeds the $3.17 that investors received over the prior 12 months. Or indeed any 12-month period before that. In other words, it has been the most lucrative 12 months for income investors in this ETF's history.
This latest 12 months of dividends now give the Vanguard Australian Shares ETF a whopping trailing dividend distribution yield of 7.55% on the current unit price.
So what's allowed this rather monstrous distribution yield to emerge?
Well, it's purely a result of the dividends that the ASX 300 shares have paid out. The past year has seen many ASX dividend shares announce pleasing dividends for their investors.
We have had a much-welcomed resumption of hefty dividends from most of the ASX banks, such as Commonwealth Bank of Australia (ASX: CBA). We've also seen some other ASX blue chips, such as Coles Group Ltd (ASX: COL), pay out record dividends as well.
But there's little doubt it's the big miners we really have to thank for this ETF's payments.
The past 12 months have seen BHP Group Ltd (ASX: BHP) dole out the highest dividends on record. It's a similar story with Rio Tinto Limited (ASX: RIO). And soaring commodity prices have also resulted in bumper yields from shares like Woodside Energy Group Ltd (ASX: WDS) and Whitehaven Coal Ltd (ASX: WHC).
So it's these kinds of companies that Vanguard investors can really thank for the massive income they have enjoyed over the past year.
