The Vanguard US Total Market Shares Index AUD ETF (ASX: VTS) was trading 0.25% lower at $403.30 per unit at Thursday's close and up 15.83% over the past 12 months.
This ASX exchange-traded fund (ETF) gives Aussie investors exposure to about 3,700 US shares.
It's an index-based ETF that seeks to track the performance of the CRSP US Total Market Index (NASDAQ: CRSPTM1) before fees.
The index includes the Magnificent Seven stocks, as well as Warren Buffett's Berkshire Hathaway and GLP-1 medicine developer and manufacturer Eli Lilly And Co.
The benefits of investing in US stocks via an ASX ETF
The VTS ETF is an easy way for ASX investors to gain exposure to US equities without having to invest via an overseas exchange. And it's becoming a more popular choice, too.
As we recently reported, the VTS ETF was one of the top 10 most traded securities among Millennial and Gen Z investors using the Selfwealth platform in FY24.
Data published by Selfwealth Ltd (ASX: SWF) shows these investors had a high buying conviction on this ASX ETF, with more than 75% of trades being purchase orders.
Not only is the VTS ETF an easy way to invest in US stocks, it's also cheap.
The Vanguard US Total Market Shares Index ETF remains one of the 10 cheapest ASX ETFs on the market, with a management expense ratio (MER) of just 0.03%.
But what about its track record?
While past performance is no guarantee of future performance, it's still handy research material, right? So, let's look back over the past 10 years.
Here's what $5,000 invested in the VTS ETF in 2014 is worth now
Vanguard recently published some numbers showing what a $5,000 investment in the VTS ETF 10 years ago would be worth today.
The ETF provider said an initial investment of $5,000 in the VTS ETF on 1 July 2014 would have been worth $17,301 on 30 June this year (excluding acquisition costs, fees and taxes).
That's a tripling in value over a decade, and all you had to do to achieve it was reinvest your distributions to take advantage of compounding returns and simply watch the ASX ETF's price rise.
But what if you'd invested some spare income, say $100 a month, into the VTS ETF along the way?
Well, that would have seriously changed things.
Your investment would now be worth $40,818.
So, now we're talking about a return of 8x your initial investment.
What if you could have afforded to put in more every month?
If you'd invested an extra $200 per month, your ASX ETF investment would now be worth $64,335.75.
If you'd invested $500 per month, you'd be sitting on an ASX ETF investment worth $134,887.
Thinking of buying the VTS ETF?
According to Vanguard, the ASX VTS currently has a price-to-earnings (P/E) ratio of 25.75x and a price-to-book (P/B) ratio of 4.21x.
It has a return on equity (ROE) of 24.03% and pays a 1.28% dividend yield.
