Millionaire magnet: Why are wealthy investors pouncing on the Vanguard Australian Shares Index ETF (VAS)?

The ASX ETF is a favourite among millionaire investors and average market participants alike.

| More on:
a couple clink champagne glasses on board a private aircraft with gourmet food plates set in front of them. They are wearing designer clothes and looking wealthy.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Vanguard Australian Shares Index ETF is one of the most popular investments found in million-dollar portfolios, according to new data 
  • That's despite millionaires otherwise showing a clear bias towards individual stocks, the majority of which are blue chips
  • The ETF's popularity might stem from its built-in diversification and low management fees

Plenty of Aussies turn to the ASX to build wealth, but the vast majority invest quite differently to the richest among them. Though there is one similarity between the portfolios of millionaires and those of the average investor – the Vanguard Australian Shares Index ETF (ASX: VAS).

New data from Australian investing platform Selfwealth Ltd (ASX: SWF) provides insight into 1,200 portfolios worth more than $1 million, and the popular exchange-traded fund (ETF) sits in pride of place.

Units in the Vanguard Australian Shares Index ETF closed Friday's session trading at $90.45.

So, what is it about the VAS ETF that might have caught the eye of Australian millionaires? Let's take a look.

Millionaires snap up Vanguard Australian Shares Index ETF (VAS)

Interestingly, there's generally a clear difference between the average portfolio and those worth more than $1 million. Notably, millionaire investors appear more likely to own individual stocks, with one clear exception.

The Vanguard Australian Shares Index ETF is the second most popular investment among millionaire shareholdings on the platform by volume and the most popular among the entire cohort.

And there are plenty of potential reasons for its popularity.

The ETF is the only one of its kind to track the S&P/ASX 300 Index (ASX: XKO) – thereby offering plenty of diversity. It also takes a small 0.1% annual management fee.

Interestingly, VAS is the only ETF in the 10 most popular holdings of Selfwealth's $1 million-plus portfolios. The vast majority are blue-chip stocks, with Fortescue Metals Group Limited (ASX: FMG) taking out the top spot.

Further down the list sits the Vanguard MSCI Index International Shares ETF (ASX: VGS) – the 12th most popular holding among millionaire investors.

Meanwhile, Betashares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) and the Betashares Nasdaq 100 ETF (ASX: NDQ) are the 15th and 20th most popular investments, respectively.

Comparatively, the top three most popular investments among Selfwealth's entire cohort are all ETFs – the VAS ETF, the Vanguard Diversified High Growth Index (ASX: VDHG), and the VGS ETF.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

asx share price boosted by us investment represented by hand waving US flag across winning athlete
ETFs

Which ASX ETFs give Aussie investors access to US stocks?

We canvas some options to help you get your research started.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here's what you have to do

If you want to bag the latest VAS dividend, here's what you need to do.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
ETFs

Why these ASX income ETFs could be top options

Here's how investors can use ETFs to generate income.

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

2 rewarding ASX ETFs I'd buy to build a second income

There are a few different ETFs that can provide good dividends. Here are two.

Read more »

A young man wearing glasses writes down his stock picks in his living room.
ETFs

The pros and cons of buying the iShares S&P 500 ETF (IVV) right now

It’s important to ask the question of whether it’s a good time to buy.

Read more »

A graphic illustration with the words NASDAQ atop a US city and currency
ETFs

How much would I have now if I'd invested $10,000 in the BetaShares Nasdaq 100 ETF (NDQ) a year ago?

Was it a good idea to buy this ETF a year ago?

Read more »

young man smiling in blue shirt
ETFs

Invest $500 in these outstanding ASX ETFs

Could these ETFs deliver the goods for investors over the long term?

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
ETFs

Buy and hold these ASX ETFs until 2034

These ETFs could be great long-term options. Let's see why.

Read more »