ETF provider Vanguard has revealed the next distribution (or dividend) for the Vanguard US Total Market Shares Index ETF (ASX: VTS).
Vanguard announced that the VTS exchange-traded fund (ETF) will pay investors 91.32 US cents per unit on 28 July.
Based on Friday's exchange rate, that equates to about A$1.40 per unit.
Vanguard will conduct a formal conversion into the Australian currency on 22 July.
The Vanguard US Total Market Shares Index ETF will go ex-dividend on Monday.
The record date is 1 July.
Vanguard does not offer a dividend reinvestment plan (DRP) with the VTS ETF, so all investors will receive a cash payment.
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What is the VTS ETF?
The ASX VTS gives Australian investors exposure to the entire US share market of about 3,555 companies.
It's got US$5.38 billion of assets under management.
The ETF seeks to track the performance of the CRSP US Total Market Index (NASDAQ: CRSPTM1) before fees.
An investment in the VTS ETF includes some of the world's biggest and most successful enterprises.
There's the Magnificent Seven stocks — Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta Platforms, and Tesla.
There's also Warren Buffett's Berkshire Hathaway, semiconductor company Broadcom Inc, and Mounjaro manufacturer Eli Lilly And Co.
One of the benefits of VTS over ETFs tracking the S&P 500 Index (SP: .INX) is more exposure to mid-cap and small-cap US shares.
Mid-caps and small-caps have more room for growth, but also carry more risk.
However, falling interest rates are a tailwind for these stocks because young companies fund their growth with debt, so lower rates cut their costs.
And the world is in a rate-cutting cycle right now.
About 30% of the VTS ETF is invested in medium and small-sized businesses. About a third of its holdings are in the US tech sector.
The VTS ETF charges a management expense ratio (MER) of just 0.03%. That makes it one of the cheapest ETFs listed on the ASX.
Vanguard says the ETF currently has a price-to-earnings (P/E) ratio of 25.32x and a price-to-book (P/B) ratio of 4.24x.
The return on equity (ROE) is 23.05% and the earnings growth rate is 20.04%.
The VTS pays a 1.28% dividend yield.
VTS ETF share price snapshot
The VTS ETF closed at $462.78 per unit on Friday, up 0.54%.
It's up 14.88% over the past year compared to a 9.72% gain for the S&P/ASX 200 Index (ASX: XJO).
