Owners of Vanguard Australian Shares Index ETF (ASX: VAS) units have been given an indication of how much the VAS exchange-traded fund (ETF) is going to distribute in a few weeks.
The VAS ETF pays distributions every quarter – it passes through dividend payments from the underlying investments up to the owners of the units.
For example, if BHP Group Ltd (ASX: BHP) or Commonwealth Bank of Australia (ASX: CBA) pay a dividend to Vanguard, then it will soon send that cash (along with other dividends) to investors.
How much the VAS ETF is planning to pay
Vanguard has just announced an estimate for what it expects to distribute for each of its ETFs.
The Vanguard Australian Shares Index ETF estimated distribution is 129.25 cents per unit.
At the current VAS ETF unit price, this translates into a yield of around 1.5%, excluding the effect of franking credits.
While this potential distribution is bigger than each of the previous three distributions, it represents a reduction of around 11% compared to a year ago.
As I mentioned, an ETF just passes through dividends, so if several miners or banks decide to reduce their payouts year over year, then the distribution from the VAS ETF will also likely be smaller.
For example, the BHP FY23 final dividend was US 80 cents per share, which was a reduction compared to the FY22 final dividend of US$1.75 per share.
When will the Vanguard Australian Shares Index ETF pay the distribution?
The first date to know is the ex-distribution date, which is the date that new investors will no longer be entitled to the upcoming payment.
For this distribution, the ex-distribution date is 2 October 2023, so investors need to own units before then to get entitlement to the payment.
The actual payment date is 17 October 2023, which is less than a month away.
VAS ETF valuation snapshot
Since the start of 2023, the Vanguard Australian Shares Index ETF has risen by 2.6%.
