The Vanguard Australian Shares Index ETF (ASX: VAS) performed soundly for investors during the 2024 financial year. This exchange-traded fund (ETF) is the biggest of the sector on the ASX, so it's an important component for many investor portfolios.
The VAS ETF tracks the S&P/ASX 300 Index (ASX: XKO), an index of 300 of the biggest businesses on the ASX.
An ETF's performance is almost entirely decided by the performance of its underlying holdings. The bigger the position weighting in an ETF's portfolio, the more influence it will have on the fund's overall return.
We'll look at the fund's overall performance and then analyse which stocks appears to have driven those returns,
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Vanguard Australian Shares Index ETF's FY24 performance
The VAS ETF unit price delivered capital growth of 7.4% over the 2024 financial year.
It has also paid a distribution return of approximately 3.9% for FY24.
If we add those two elements of the return together, that would suggest a total investor return of 11.3% over the 12-month period, excluding franking credits.
Vanguard will confirm those return figures in due course when it releases its monthly update for June 2024.
How did the VAS ETF deliver a double-digit return?
The biggest ASX blue-chip shares had the most impact on the return because of their weighting in the portfolio.
During the 2024 financial year:
- The BHP Group Ltd (ASX: BHP) share price fell 5%
- The Commonwealth Bank of Australia (ASX: CBA) share price rose 27%
- The National Australia Bank Ltd (ASX: NAB) share price increased 37%
- The Westpac Banking Corp (ASX: WBC) share price went up 28%
- The ANZ Group Holdings Ltd (ASX: ANZ) share price climbed by 19%
- The Wesfarmers Ltd (ASX: WES) share price lifted 32%
- The Goodman Group (ASX: GMG) share price went up by 73%
Of course, past performance is not a reliable indicator of future performance, particularly when it comes to short-term returns. The above stocks may not perform anywhere near as well in FY25 – they could even see their share prices go down.
Another factor that helped the Vanguard Australian Shares Index ETF is its annual management fee of only 0.07%, which is very low compared to what an active fund manager may charge, say 1.% plus performance fees.
What next?
The VAS ETF expects to pay its latest quarterly distribution, comprising a cash distribution of 67.2 cents and franking credits of 17.1 cents, on 16 July 2024.
In FY25, ASX mining shares and ASX bank shares could have another sizeable impact on the fund's performance because those two sectors make up around half of the fund's weighting.
I recently covered its outlook for the 2025 financial year in another article.
