In fact, ASX small-cap shares outperformed the larger companies by almost 2.5 times in 2025. 

The S&P/ASX All Ords Index (ASX: XAO) delivered total returns (capital growth plus dividends) of 10.56% last year.

This index contains the 500 largest ASX listed companies, and accounts for roughly 84% of Australia's equity market. 

Meanwhile, the S&P/ASX Small Ords Index (ASX: XSO), which tracks companies ranked 101 to 300 by market cap, delivered a total return of 24.96%.

However, it appears the pendulum has now swung the other way in 2026. 

Since the start of the year, the Small Ords Index has dropped approximately 12%. 

This fall is significantly further than the All Ords Index which is down roughly 3% in the same period. 

Why are they struggling in 2026?

A small-cap stock typically has a market capitalisation ranging from a few hundred million to $2 billion.

Subsequently, these companies are much more sensitive to interest rates than bigger companies.

One reason for this is that these stocks rely more on debt and external funding. 

Additionally, many are not yet profitable, which means valuations depend heavily on future growth.

In 2026, Australia has seen elevated inflation, causing the RBA to deliver two interest rate hikes.

It seems markets are now repricing for tighter financial conditions, causing smaller companies to be hit disproportionately. 

In essence, the Small Ords Index isn't falling because "small caps are broken" – it's falling because:

• Macro conditions are flipping against them
• Liquidity is tightening
• Risk appetite dropped suddenly.

Is there any upside?

With many small-caps falling throughout the start of 2026, investors might be considering swooping in on what could appear to be a relative value. 

Some notable ASX small-caps that have fallen include: 

• Web Travel Group Ltd (ASX: WEB)
• Catapult Sports Ltd (ASX: CAT)
• Elders Ltd (ASX: ELD). 

These companies have drawn some positive outlooks from brokers, however it's important to consider that in the short term, returns could be minimal, if these economic conditions persist.

Alternatively, if investors are aiming for a more broad, diversified entry into the small-cap market, there are several ASX ETFs to consider: 

• iShares S&P/ASX Small Ordinaries ETF (ASX: ISO) – designed to track the performance of small-capitalisation Australian equities included in the S&P/ASX 300 index, but not in the S&P/ASX 100 index.
• Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) – Tracks the MSCI Australian Shares Small Cap Index. 
• VanEck Vectors Small Companies Masters ETF (ASX: MVS) – offers exposure to a diversified portfolio of roughly 61 ASX-listed small companies. 

The post What's happened to ASX small-caps in 2026? appeared first on The Motley Fool Australia.

That was a 75% increase on net inflows in 2024, according to Betashares data.

There is now $331 billion invested across 423 ETFs on the market.

There was a net increase of 56 ETFs launched on the ASX last year, with the three major issuers being Vanguard, Betashares, and iShares.

Aussies have fallen in love with ASX ETFs for their simplicity and low cost.

They provide great diversification, and are an easy vehicle for investing in international shares through the ASX.

The Australian Securities Exchange has just released the full-year performance data for ASX ETFs in 2025.

Here, we look at the six ETFs holding ASX shares that delivered the best total returns (that's capital growth plus dividends) for investors.

6 top ASX ETFs for total returns in 2025

Two key themes are evident in the top six ETFs of 2025.

They are rising commodities and ASX mining shares, and turbocharged growth for small-cap companies.

The ASX 200 materials sector was the top performer of 2025 due to fast-rising mining shares buoyed by stronger commodity values.

S&P/ASX 200 Materials (ASX: XMJ) returned 36.21% in 2025 compared to 10.32% for the benchmark S&P/ASX 200 Index (ASX: XJO).

ASX small-cap shares also had a fantastic year due to interest rate cuts and staggering share price growth for junior gold miners.

The S&P/ASX Small Ords Index (ASX: XSO), which tracks companies ranked 101 to 300 by market cap, gave a total return of 24.96% last year compared to a 10.56% return for the S&P/ASX All Ords Index (ASX: XAO), which tracks the 500 largest companies on the market.

Let's take a look at those ETFs.

1. VanEck Australian Resources ETF (ASX: MVR)

The No. 1 ETF for total returns was the VanEck Australian Resources ETF.

MVR ETF delivered a total one-year return of 40.53%. The historical distribution yield is 2.57%.

The ETF closed at $45.96 per unit on Tuesday.

2. Betashares Australian Small Companies Select ETF (ASX: SMLL)

The SMLL ETF delivered a total one-year return of 36.39%. The historical distribution yield is 2.26%.

SMLL ETF closed at $4.92 per unit yesterday.

3. SPDR S&P/ASX 200 Resources ETF (ASX: OZR)

The OZR ETF delivered a total one-year return of 35.73%. The historical distribution yield is 2.62%.

The OZR ETF closed at $16.05 per unit yesterday.

4. Betashares Australian Resources Sector ETF (ASX: QRE)

The QRE ETF delivered a total one-year return of 35.42%. The historical distribution yield is 2.36%.

QRE ETF closed at $9.20 per unit yesterday.

Learn more about this ETF here.

5. Firetrail Aust Small Companies Fund — Active ETF (ASX: FSML)

This active ETF delivered a total one-year return of 35.2%. The historical distribution yield is 0.22%.

FSML ETF closed at $2.37 per unit yesterday.

6. Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

VSO ETF delivered a total one-year return of 25.11%. The historical distribution yield is 6.75%.

The VSO closed at $80.01 per unit on Tuesday.

The post 6 best-performing ASX ETFs holding Aussie shares in 2025 appeared first on The Motley Fool Australia.

This includes the market's largest ETF, the Vanguard Australian Shares Index ETF (ASX: VAS).

Aussie investors have $22.58 billion invested in ASX VAS, which seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO).

VAS ETF delivered a total gross return of 10.07% last year, made up of 7.05% in capital growth and a dividend yield of 3.02%.

The ETF closed out the year at $108.90 per unit on 31 December after retracing a little from its 52-week high of $113.18 on 16 October.

On Friday, VAS closed the week at $110.50 per unit, up 0.53%.

Let's recap the dividends to be paid out today for investors in VAS and other Vanguard ETFs.

How much will Vanguard ETF investors receive?

Here is a summary of the dividends that Vanguard will pay to investors today.

The Vanguard Australian Shares Index ETF (ASX: VAS) will pay a dividend of 82.08 cents per unit.

Vanguard Australian Shares High Yield ETF (ASX: VHY), which tracks the FTSE Australia High Dividend Yield Index, will pay 65.83 cents per unit.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) will pay a dividend of 47.36 cents per unit.

The Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) will pay 129.60 cents per unit. The VSO tracks the MSCI Australian Shares Small Cap Index.

Vanguard FTSE Europe Shares ETF (ASX: VEQ), which tracks the FTSE Developed Europe All Cap Index (with net dividends reinvested) in Australian dollars before fees, will pay 61.60 cents per unit.

The Vanguard Australian Fixed Interest Index ETF (ASX: VAF) will pay a dividend of 42.44 cents per unit.

Vanguard Australian Property Securities Index ETF (ASX: VAP), which tracks the performance of the S&P/ASX 300 A-REIT Index before fees, will pay 45.61 cents per unit.

The Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE), which tracks the FTSE Emerging Markets All Cap China A Inclusion Index (with net dividends reinvested) in Australian dollars before fees, will pay 132.88 cents per unit.

Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH), which tracks the FTSE Australia 300 Choice Index before fees, will pay 55.39 cents per unit.

The Vanguard MSCI International Small Companies Index ETF (ASX: VISM) will pay 85.44 cents per unit.

Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) will pay a dividend of 63.34 cents per unit.

The post Vanguard will pay ASX ETF dividends today appeared first on The Motley Fool Australia.

The ETF provider will pay investors next Monday, 19 January.

Let's take a look.

Next round of dividends for Vanguard ASX ETF investors

Here is a summary of the dividends that Vanguard will pay to investors holding some of its most popular products on 19 January.

The Vanguard Australian Shares Index ETF (ASX: VAS), which seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO) before fees, will pay a dividend of 82.08 AU cents per unit.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) tracks the FTSE Australia High Dividend Yield Index. The ASX VHY will pay 65.83 AU cents per unit.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) provides exposure to about 1,500 businesses in developed nations outside Australia. This ETF will pay a dividend of 47.36 AU cents per unit.

The Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) will pay 129.60 AU cents per unit. The VSO tracks the MSCI Australian Shares Small Cap Index.

The Vanguard FTSE Europe Shares ETF (ASX: VEQ) provides exposure to about 1,300 companies listed in major European markets. It tracks the FTSE Developed Europe All Cap Index (with net dividends reinvested) in Australian dollars before fees. It will pay 61.60 AU cents per unit.

The Vanguard Australian Fixed Interest Index ETF (ASX: VAF) tracks the Bloomberg AusBond Composite 0+ Yr Index before fees. It will pay a dividend of 42.44 AU cents per unit.

The Vanguard Australian Property Securities Index ETF (ASX: VAP) tracks the performance of the S&P/ASX 300 A-REIT Index before fees. It will pay 45.61 AU cents per unit.

The Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE), which tracks the FTSE Emerging Markets All Cap China A Inclusion Index (with net dividends reinvested) in Australian dollars before fees, will pay 132.88 AU cents per unit.

The Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH) tracks the FTSE Australia 300 Choice Index before fees. It will pay 55.39 AU cents per unit.

The Vanguard MSCI International Small Companies Index ETF (ASX: VISM) will pay a dividend of 85.44 AU cents per unit. The VISM ETF tracks the MSCI World ex-Australia Small Cap Index (with net dividends reinvested) in Australian dollars before fees.

Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC), which tracks the MSCI Australian Shares Large Cap Index, will pay a dividend of 63.34 AU cents per unit.

The post Vanguard reveals next lot of dividends for VAS and other ASX ETFs appeared first on The Motley Fool Australia.

This has been reflected in the investor activity throughout November. Data shows there has been a surge in small-cap investing amongst ETF investors. 

Outperforming the blue-chips

The Global X Market Scoop report stated that Australian equity ETFs with a size-tilt experienced a notable surge in net flows during November. This reflects growing investor interest in diversifying beyond the large-cap-dominated landscape.

According to the report, after several years in which large caps, such as banks, led market returns, attention is increasingly shifting to smaller and mid-sized companies.

These can offer potential for outsized growth and portfolio broadening. 

Global X said the trend underscores that investors may be looking to capture opportunities across the full spectrum of the Australian equity market rather than concentrating solely on the mega-cap heavyweights.

Whether investors are aiming for the top 300 Australian companies rather than just the top 200, or focusing exclusively on smaller companies, small-caps could be making a comeback.

So far in 2025, these shares have outperformed their large-cap counterparts by 14%. This marks the best relative outperformance in nearly 16 years.

Attracting investor capital 

Global X said this renewed focus has coincided with the launch of several new, more active ETFs targeting small and mid segments. 

This provides investors with targeted exposure and more flexible management strategies. 

For example, the Global X Australia 300 ETF (ASX: A300) was launched in August this year. 

As these products gain traction, small and mid-cap ETFs are beginning to attract capital, suggesting the potential for a rotation or at least a complementary role alongside traditional large-cap allocations.

In November 2025, record inflows of approximately $272 million were seen into Australian small-cap ETFs, underscoring a growing investor appetite for the segment.

How to target small-caps

There are funds that track the 300 largest companies on the ASX, like the previously mentioned Global X Australia 300 ETF or the Vanguard Australian Shares Index ETF (ASX: VAS). 

These give you more access to mid and smaller companies outside the top 200.

However, they do still include a large weighting towards blue-chip stocks. 

For a more specific focus and to avoid crossover into large-cap stocks, there are other ASX ETFs to consider: 

• Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) – Tracks roughly 180 small-cap companies
• BetaShares Australian Small Companies Select Fund (ASX: SMLL) – Invests in a portfolio typically between 50-100 small-cap stocks that are generally within the 91-350 largest by market cap

The post Why Australian small-cap shares are shining appeared first on The Motley Fool Australia.

That's because analysts at Catapult Wealth have revealed one ASX exchanged traded fund (ETF) to buy and one blue chip ASX 200 share to hold, courtesy of The Bull.

Let's see what it is recommending to its clients this week:

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

The ASX ETF that is being tipped as a buy by Catapult Wealth is the Vanguard MSCI Australian Small Companies Index ETF.

As you might have guessed from its name, this ASX ETF provides Aussie investors with low-cost, broadly diversified exposure to small cap shares listed on the Australian share market.

It is currently invested in around 170 Australian shares, with holdings diversified across both small and mid-sized companies which make up about 14% of the Australian market.

Among its holdings are retailer JB Hi-Fi Ltd (ASX: JBH), rare earths producer Lynas Rare Earths Ltd (ASX: LYC), and enterprise technology provider TechnologyOne Ltd (ASX: TNE).

Commenting on the ASX ETF, Catapult Wealth said:

VSO invests in small to medium sized companies listed on the ASX. Given many of Australia's largest listed companies are considered either overvalued, or with limited upside, we see more growth opportunities in companies within the small to mid-sized sectors. Top VSO holdings included JB Hi-Fi and Technology One at August 31. What also appeals about VSO is exposure to a diversified portfolio, which spreads risk.

ResMed Inc. (ASX: RMD)

ResMed could be an ASX 200 blue chip share to hold right now according to Catapult Wealth.

It is a leading sleep disorder treatment company which has been growing at a strong rate for well over a decade.

While the broker thinks it is one of the highest quality companies on the local market, it isn't trading at a level that is inviting enough to label it a buy. It said:

ResMed makes medical devices to treat sleep disordered breathing, such as sleep apnoea. Many sleep disordered sufferers are yet to be diagnosed, which paints a brighter outlook for sales growth. Growing awareness, aided by new technologies and health trends, could further support demand for treating sleep disordered breathing. The stock is regarded as one of the highest quality healthcare companies and appears attractively valued after retreating from $45.07 on August 25 to trade at $40.85 on October 2.

The post Buy this ASX ETF and hold this popular blue chip ASX 200 share appeared first on The Motley Fool Australia.

That's because exchange traded funds (ETFs) are here to save the day by allowing you to purchase large groups of shares with a single click of the button.

And to narrow things down for you, the team at Bell Potter has picked out two Australian ETFs that it thinks would be great picks for investors looking for domestic share market coverage.

Let's see which funds it is recommending to clients:

Vanguard Australian Shares Index ETF (ASX: VAS)

The first Australian ETF for investors to consider is the Vanguard Australian Shares Index ETF.

This popular fund offers exposure to the ASX 300 index, which is home to 300 of the largest and most liquid shares on the Australian share market.

This means that you would be buying a slice of giants like BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), as well as smaller names like Universal Store Holdings Ltd (ASX: UNI) and Tyro Payments Ltd (ASX: TYR).

The beauty of this is that you get a good representation of the Australian share market and its dividend culture. For example, at the last count, it was trading with a dividend yield of 3.1%. That's better than some savings accounts these days.

Commenting on why it thinks this ASX ETF is one of the best to buy, Bell Potter said:

We like VAS as a method of gaining broad market exposure to the ASX. Vanguard is a best-in-class ETF issuer in our view, ensuring optimal portfolio replication, high liquidity and reputable corporate action management.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Another Australian ETF that the broker is positive on is the Vanguard MSCI Australian Small Companies Index ETF.

As you might have guessed from its name, this fund targets the smaller end of the share market.

Bell Potter highlights that the ETF is invested in a portfolio of Australian small cap companies, which creates an efficient mechanism to capture their long term performance. It points out that the index it tracks captures the smallest 14% of the Australian equity universe by free float market capitalisation.

Given how some analysts believe that small caps are set for a strong period as interest rates rise, it could be a good time to consider this fund. Bell Potter concludes:

VSO provides a simple, low-cost method to develop an allocation to small and mid cap equities. [..] Smaller companies typically have greater growth potential than large caps given they are often in an earlier stage of their growth cycle. Growth in these companies can enhance overall portfolio returns.

The post Bell Potter names 2 of the best Australian ETFs to buy appeared first on The Motley Fool Australia.

Traditionally, small-cap stocks have a market capitalisation ranging from a few hundred million to $2 billion.

The upside can be greater for these companies that still are largely unproven or are perhaps yet to generate profit.

But they also tend to be more volatile than larger-cap stocks.

The dust settles after earnings season

The report from VanEck shows the market reaction to earnings season was more intense than in years gone by. 

According to the ETF provider, most companies (62%) reported in-line results, with 22% delivering beats and slightly outpacing misses (16%).

However, VanEck suggests market reactions did not reflect this 'solid' result. 

One in five reporting companies moved more than 10% after they announced their results. 

Analysing the results on a market-weighted basis, mid-cap companies, as represented by the S&P/ASX MidCap 50 Index, led earnings beats this season, with a net-beat rate of 2.9% versus the S&P/ASX 200 Index's 1.15%.

Small caps battered but not beaten

VanEck also said that small caps, as represented by the companies in the S&P/ASX Small Ordinaries Index (ASX: XSO), performed the worst from an earnings per share (EPS) surprise perspective.

What is interesting is that after the earnings season, an analysis of the consensus 12-month price targets shows that small caps sit highest.

The outlook for small companies is brighter. The RBA is starting to cut rates, lowering capital costs. The economic outlook has led to small companies having the highest price-target revisions, signalling the market's conviction in Australian small caps.

VanEck said that historically, during this type of cycle, small caps have offered more upside than large caps because they have fallen further or not kept pace with large caps as GDP growth slowed. 

Importantly, the provider did also reinforce that the Small Ords has delivered lower cumulative returns relative to the broader, large-cap dominated S&P/ASX 200 Index (ASX: XJO) over the long term.

This reflects the volatility that may come with this investment class compared to blue-chip stocks.

How do investors gain exposure?

Based on the research from VanEck, investors who have been eyeing specific small caps may be well-positioned to buy the dip, with economic tailwinds potentially coming in the short term. 

Alternatively, there are ASX ETFs that offer more diversified exposure to the small-cap sector. 

For example, the VanEck Vectors Small Companies Masters ETF (ASX: MVS). 

It tracks an index consisting of 60 small-cap ASX-listed companies domiciled in Australia or New Zealand with strong growth characteristics and sound fundamental indicators of quality.

It has a very evenly distributed portfolio, with its largest exposure representing just 2.7% of the fund. 

The fund has risen more than 17% YTD. 

Other ASX ETFs tracking small-caps include: 

• SPDR S&P/ASX Small Ordinaries Fund (ASX: SSO) – Tracks the returns of the Small Ordinaries Index, which are companies included in the S&P/ASX 300 Index (ASX: XKO), but not in the S&P/ASX 100 Index (ASX: XTO).
• iShares S&P/ASX Small Ordinaries ETF (ASX: ISO) – Also measures the performance of small-capitalisation Australian equities included in the ASX 300 Index, but not in the ASX 100 Index.
• Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO). 

The post Why now is a good time to turn to small-cap ASX ETFs appeared first on The Motley Fool Australia.

While it's true your ETF isn't going to double in value in one day like a speculative penny stock, funds can still far outpace indexes like the S&P/ASX 200 Index (ASX: XJO). 

To prove this point, here are three fundamental ASX ETFs that have beaten the ASX 200 so far this year. For context, the ASX 200 is up 7.95% YTD. 

iShares S&P/ASX Small Ordinaries ETF (ASX: ISO)

The first ASX ETF with strong returns so far in 2025 is ISO ETF. 

The fund aims to provide investors with the performance of the S&P/ASX Small Ordinaries Accumulation Index, before fees and expenses. 

The index is designed to measure the performance of small-capitalisation Australian equities included in the S&P/ASX 300 index, but not in the S&P/ASX 100 index.

It is a very balanced ETF, made up of roughly 200 holdings, with none representing more than 1.85%. 

It has risen an impressive 15.72% so far in 2025 – almost doubling the returns of the ASX 200. 

Vanguard Ethically Conscious Australian Shares Fund (ASX: VETH)

As the name suggests, this fund provides exposure to the FTSE Australia 300 Choice Index. 

The index excludes the securities of companies that have a specified level of business involvement in fossil fuels, nuclear power, alcohol, tobacco, cannabis, gambling, adult entertainment or weapons. 

The index also excludes companies that the index provider determines are involved in controversial conduct related to principles of the United Nations Global Compact.

The fund has risen 11.43% YTD. 

It has a significant exposure (more than 27%) to the big four bank shares. At the time of writing is made up of 234 total holdings. 

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

This fund provides exposure to small companies listed on the Australian Securities Exchange. 

The sectors in which the ETF invests include industrials, materials and consumer discretionary. 

VSO ETF offers potential long-term capital growth, which can be typical of the small company market sector.

So far in 2025, the fund has risen 12.98%, far ahead of the ASX 200 index. 

Since its inception in 2011, it has provided more than 10% annualised returns. 

It is currently made up of 184 holdings, with no holding representing more than 2.35% of the fund. 

The post 3 Australian focused ASX ETFs racing ahead of the ASX 200 this year appeared first on The Motley Fool Australia.

After all, the ASX is home to so many individual shares that are famous for paying out fat, fully franked dividends that investors often don't look any further. Why experiment when you can just own BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), or Telstra Group Ltd (ASX: TLS)?

Well, to answer that rhetorical question, the dividend yields from these famous income payers are currently at the lowest levels investors have seen for many years. Just take CBA. It would have been unthinkable even a few years ago, for CBA to trade at well under a 3% dividend yield. Yet here we are at 2.74% today.

Considering this, it might be a good opportunity to turn to ASX ETFs if you are seeking to up your passive income stream from ASX shares.

Two ASX ETFs to buy for easy dividend income today

If I were in this boat, there would be two ASX ETFs that I would consider buying today for a diversified dividend income boost.

First up is the Vanguard MSCI Index Australian Small Companies Index ETF (ASX: VSO). This index fund holds around 170 ASX shares that lie outside the largest 100 stocks on our market. Instead of BHP and CBA, VSO holds stocks like JB Hi-Fi Ltd (ASX: JBH) and Seek Ltd (ASX: SEK) as its most significant investments.

As an index fund, this ETF's dividend distribution payments tend to fluctuate quite a lot from year to year. But even so, investors often get showered with income. As a case in point, VSO investors have enjoyed a total of $5.37 per unit in dividend distributions over the past 12 months. That works out to be a trailing yield of over 7.7%.

Again, investors shouldn't expect that every year. But even so, this index fund could be worth a look for income seekers today.

Another ASX ETF worth checking out is the Vanguard Australian Shares High Yield ETF (ASX: VHY).

This fund holds around 75 individual ASX stocks, all selected based on their dividend history and potential. These stocks include the usual suspects listed above, as well as names like Macquarie Group Ltd (ASX: MQG), Transurban Group (ASX: TCL), and Woodside Energy Group Ltd (ASX: WDS).

As you might expect, this ASX ETF has the ability to pass on some of the best dividends the ASX has to offer. Its last four quarterly dividend distributions came to a total of $6.51 per unit, giving VHY a trailing yield of 8.68% at current pricing. Again, investors shouldn't expect that kind of windfall every year. But there is a lot of income potential here nonetheless.

The post 2 ASX ETFs yielding above 7.7% to buy for easy income today appeared first on The Motley Fool Australia.

Well, today's a great day for you and other Vanguard ETF investors because it's dividend payday!

Vanguard will pay your distributions today. Here's how much you'll receive.

Own VAS or VGS ETFs? Here's how much you'll get today…

VAS is Australia's biggest ETF with $20.75 billion in funds under management (FUM), according to June data from the ASX.

VAS seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO) before fees.

The VAS ETF will pay a dividend of 65.1416 AU cents per unit.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) is the second biggest ETF on the Australian share market.

The VGS ETF tracks the MSCI World ex-Australia (with net dividends reinvested) in Australian dollars Index.

This ETF will pay a dividend of 128.4107 AU cents per unit.

Dividends for other Vanguard ETFs…

Here is a summary of the dividend amounts investors in these Vanguard ETFs will receive on Wednesday.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) tracks the FTSE Australia High Dividend Yield Index. The ASX VHY will pay 201.0911 AU cents per unit.

The Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) will pay 398.3168 AU cents per unit. The VSO tracks the MSCI Australian Shares Small Cap Index.

The Vanguard FTSE Europe Shares ETF (ASX: VEQ) tracks the FTSE Developed Europe All Cap Index (with net dividends reinvested) in Australian dollars before fees. It will pay 104.3118 AU cents per unit.

The Vanguard Australian Fixed Interest Index ETF (ASX: VAF) tracks the Bloomberg AusBond Composite 0+ Yr Index before fees. It will pay a dividend of 53.6889 AU cents per unit.

The Vanguard Australian Property Securities Index ETF (ASX: VAP) tracks the performance of the S&P/ASX 300 A-REIT Index before fees. It will pay 161.2115 AU cents per unit.

The Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE), which tracks the FTSE Emerging Markets All Cap China A Inclusion Index (with net dividends reinvested) in Australian dollars before fees, will pay 20.1612 AU cents per unit.

The Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH) tracks the FTSE Australia 300 Choice Index before fees. It will pay 41.7466 AU cents per unit.

The Vanguard MSCI International Small Companies Index ETF (ASX: VISM) will pay a dividend of 154.1283 AU cents per unit. The VISM ETF tracks the MSCI World ex-Australia Small Cap Index (with net dividends reinvested) in Australian dollars before fees.

What about the ASX VTS?

Investors in the Vanguard US Total Market Shares Index ETF (ASX: VTS) will receive their dividend on 28 July.

Vanguard will pay VTS ETF investors 91.32 US cents per unit.

Vanguard will convert the dividend into Australian currency on 22 July and advise investors of the final amount to be paid.

The post Why it's a great day for Vanguard ASX ETF investors! appeared first on The Motley Fool Australia.

Most ASX stocks are required to report their financials to investors every six months. This typically occurs in February and March, and then again in August and September.

Earnings season is a great time for ASX investors. We get to see what our companies have been doing and see if the lofty promises that management teams make are living up to reality.

Buying and selling ASX stocks during earnings season is always a little tricky. Share prices tend to fluctuate wildly around the time a company's earnings are publicly released.

As such, I typically do most of my buying and selling outside this busy time. So today, let's talk about two ASX stocks I've been buying recently in the lead-up to this year's second earnings period.

Two ASX stocks I've been buying

MFF Capital Investments Ltd (ASX: MFF)

First up, we have the listed investment company (LIC), MFF Capital Investments. Like most LICs, MFF owns and manages a portfolio of underlying shares on behalf of its shareholders. In this case, these are not ASX stocks, but US shares.

MFF follows a Warren Buffett playbook of buying high-quality businesses at reasonable prices, and then holding them for long periods of time. Many of its largest holdings, which include the likes of Amazon, Mastercard, Visa, Alphabet, and Bank of America, have been in its portfolio for years.

Whilst the prices of these US stocks don't exactly look cheap right now (with the exception of Alphabet), MFF does. Yesterday, the company informed us that the net tangible assets per share stood at $4.982 on a pre-tax basis. That's as of 11 July. Despite this, MFF currently trades at a significant discount to that of $4.43 a share.

As such, I'd be more than happy to add to this position today, in addition to the recent investments I've already made.

Vanguard Australian Small Companies Index ETF (ASX: VSO)

This next investment isn't really an ASX stock, but represents dozens of underlying shares. The Vanguard Australian Small Companies Index ETF is an exchange-traded fund (ETF) that focuses on the ASX stocks outside of the largest 100.

Rather than Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), or BHP Group Ltd (ASX: BHP), VSO's top holdings include names like TechnologyOne Ltd (ASX: TNE), JB Hi-Fi Ltd (ASX: JBH), and Lynas Rare Earths Ltd (ASX: LYC).

I like the diversification this brings to my portfolio, complementing my investment in the large-cap-focused Vanguard Australian Shares Index ETF (ASX: VAS).

In the lead-up to earnings season, we've seen ASX stocks like CBA, Telstra, and Wesfarmers Ltd (ASX: WES) increase in value substantially. But VSO has been far more muted.

As such, I think it's a great time to buy some more of this quality ETF.

The post Why I'm buying more of these 2 ASX stocks ahead of earnings season appeared first on The Motley Fool Australia.

But even so, I still own quite a few shares that pay meaningful dividend income every year. As it happens, most of these investments have also delivered meaningful capital growth. Today, let's discuss the biggest dividend payers in my personal portfolio.

The three biggest dividend payers in my ASX share portfolio

MFF Capital Investments Ltd (ASX: MFF)

First up is the listed investment company (LIC), MFF Capital. MFF, like most LICs, invests in an underlying portfolio of shares. In this case, it is mostly American stocks. This LIC is run by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris McKay. I like Mackay's Buffett-esque habit of buying high-quality companies at decent prices, and holding them for as long as possible.

Some of MFF's entrenched tenants include Mastercard, Visa, Amazon and Bank of America.

What's great about MFF is that it pays a strong, fully franked and rising dividend, despite its low-yield portfolio. Between 2021 and 2024, the company raised its annual (fully franked) payouts from 6.5 cents to 13 cents per share. Today, the company trades with a dividend yield of just under 3.4%, although I am lucky to have a yield-on-cost far higher than that. As such, MFF is one of the largest dividend payers in my ASX portfolio today.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Next up, we have an entrant in this exchange-traded fund (ETF) from popular provider Vanguard. The Vanguard Australian Small Companies ETF. This index fund tracks around 170 shares from the smaller end of the ASX spectrum. I find it complements a classic index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) that I also hold rather well.

It might not seem like it, but this ETF has paid me some massive dividends in recent years. When this ETF pays out its next dividend distribution on 16 July later this month, investors will have enjoyed a total of $5.37 in dividend distributions per unit. At the current VSO price of $68.40, this equates to a monstrous yield of 7.85%.

Schwab US Dividend Equity ETF (NYSE: SCHD)

Finally, a US-based ETF rounds out my portfolio's most lucrative dividend stocks. The Schwab US Dividend Equity ETF is a fund that holds a large portfolio of US stocks that all demonstrate reliable and rising dividend income potential. It holds a range of shares in this endeavour, including Texas Instruments, Chevron, PepsiCo, Altria and Coca-Cola.

Since SCHD ETF tends to hold only stocks that raise their dividends like clockwork, it can offer the same to its investors. I've only owned this ETF for a year or so, but already, my dividend income has risen meaningfully. Today, thanks in part to its dividends coming in US dollars, it is a major, and welcome, income payer in my portfolio.

The post Here are the 3 biggest dividend payers in my ASX stock portfolio today appeared first on The Motley Fool Australia.

Investors will receive their dividends on 16 July.

According to the timetable, the ex-dividend date is tomorrow, 1 July, and the record date is 2 July.

How much will Vanguard ASX ETF investors get?

Here is a summary of the dividend amounts investors in some of the most popular Vanguard ETFs will receive on 16 July.

The Vanguard Australian Shares Index ETF (ASX: VAS), which seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO) before fees, will pay a dividend of 65.1416 AU cents per unit.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) tracks the FTSE Australia High Dividend Yield Index. The ASX VHY will pay 201.0911 AU cents per unit.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) provides exposure to about 1,500 businesses in developed nations outside Australia. This ETF will pay a dividend of 128.4107 AU cents per unit.

The Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) will pay 398.3168 AU cents per unit. The VSO tracks the MSCI Australian Shares Small Cap Index.

The Vanguard FTSE Europe Shares ETF (ASX: VEQ) provides exposure to about 1,300 companies listed in major European markets. It tracks the FTSE Developed Europe All Cap Index (with net dividends reinvested) in Australian dollars before fees. It will pay 104.3118 AU cents per unit.

The Vanguard Australian Fixed Interest Index ETF (ASX: VAF) tracks the Bloomberg AusBond Composite 0+ Yr Index before fees. It will pay a dividend of 53.6889 AU cents per unit.

The Vanguard Australian Property Securities Index ETF (ASX: VAP) tracks the performance of the S&P/ASX 300 A-REIT Index before fees. It will pay 161.2115 AU cents per unit.

The Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE), which tracks the FTSE Emerging Markets All Cap China A Inclusion Index (with net dividends reinvested) in Australian dollars before fees, will pay 20.1612 AU cents per unit.

The Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH) tracks the FTSE Australia 300 Choice Index before fees. It will pay 41.7466 AU cents per unit.

The Vanguard MSCI International Small Companies Index ETF (ASX: VISM) will pay a dividend of 154.1283 AU cents per unit. The VISM ETF tracks the MSCI World ex-Australia Small Cap Index (with net dividends reinvested) in Australian dollars before fees.

Want to reinvest your dividends?

A distribution reinvestment plan (DRP) is available for all of these Vanguard ETFs.

DRP elections must be made by 5pm on the record date, which is 2 July.

Recent research by Vanguard shows ETFs are more resilient during market turbulence than individual shares.

The post Own Vanguard ASX ETFs? Here's your next dividend and when it's coming appeared first on The Motley Fool Australia.

As I went through last weekend, although ASX shares and ETFs were my first and, for a long time, only investments, my portfolio now contains more US shares and ETFs than ASX ones.

But even so, there are several ASX ETFs that I currently own now.

The index funds

First and foremost amongst these is the Vanguard Australian Shares Index ETF (ASX: VAS).

VAS is the quintessential ASX index fund. It represents an investment in the largest 300 Australian shares listed on the ASX. That's everything from BHP Group Ltd (ASX: BHP) and National Australia Bank Ltd (ASX: NAB) to Ampol Ltd (ASX: ALD) and Aussie Broadband Ltd (ASX: ABB).

I like VAS for its simple and cheap exposure to the Australian stock market. I'm happy to pay VAS' management fee of 0.08% per annum for this access. Given its decent long-term historical return of 9.15% per annum (as of 31 December) and the hefty dividends this ETF habitually pays out, I am happy to hold this position for the long term, just in case my individual share choices don't end up being market-beaters.

In addition to VAS, I also own the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO). This ASX ETF complements the Vanguard Australian Shares ETF with its portfolio of around 180 smaller companies on the ASX. Instead of BHP and NAB, VSO's largest holdings are stocks like JB Hi-Fi Ltd (ASX: JBH) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

I think this ETF nicely balances out VAS. Together, these two funds offer a more well-rounded exposure to the Australian markets than either one individually.

The other index fund in my portfolio is the BetaShares Nasdaq 100 Currency Hedged ETF (ASX: HNDQ).

This ETF covers the largest 100 non-financial shares listed on the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) Index. It's a great way to easily add exposure to American tech giants like Apple, Amazon, Tesla and NVIDIA, as well as other tech heavyweights like Airbnb, Netflix, PayPal and Texas Instruments.

Other ASX ETFs

There are another two ASX ETFs in my portfolio that are worth mentioning. Neither are the broad-based market index funds that we see above.

Firstly, there's the iShares Global Consumer Staples ETF (ASX: IXI). I love consumer staples shares for their defensive nature and ability to ring in profits during all kinds of economic weather. The ASX doesn't have too many global consumer staples companies, so this ETF is a great way to get exposure to the likes of Walmart, Costco, Unilever, Procter & Gamble, Colgate-Palmolive and Coca-Cola.

I like the defensiveness and stability that this ETF adds to my portfolio.

Secondly, there's the VanEck Morningstar Wide Moat ETF (ASX: MOAT). This is a peculiar ETF in that it holds an actively managed portfolio of US shares selected based on business characteristics. In this case, those characteristics are the perceived possession of a wide economic moat.

This Warren Buffett term refers to a company's inbuilt competitive advantage over its competition. Buffett himself has said he likes to look for it in a new investment.

MOAT has been an exceptional performer in my portfolio for a number of years. Since this ETF's inception in 2015, it has managed an average performance of 16.16% per annum (as of 31 December). As long as this ASX ETF is bringing home those kinds of returns, it has a place in my investing house.

The post The only Australian ETFs I own at the start of 2025 appeared first on The Motley Fool Australia.

While I still believe that buying a conventional stock market index fund is a great long-term investment, the VAS ETF is no longer my top choice in today's market.

As most investors would be aware, the S&P/ASX 200 Index (ASX: XJO) continued to push into even higher record territory over November, driven mostly by the big four ASX banks. Commonwealth Bank of Australia (ASX: CBA), for example, continued to hit new record highs last month, crossing $160 a share for the first time ever.

As these big banks have continued to rise in value, their presence in ASX index funds like VAS has also swelled. Today, the big four make up a whopping 23.7% of the ASX 200's weighting, and CBA alone accounts for more than 10.5%.

This is the primary reason behind my view that the best investment in the current market is no longer an ASX index fund like VAS but an alternative called the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO).

One ASX stock to buy right now

VSO is an index fund that tracks the Australian share markets. However, as its name implies, it forgoes exposure to the largest stocks on the ASX, instead offering investors a broad portfolio consisting of around 170 of the market's mid and small-cap shares.

This portfolio's larger holdings include names like JB Hi-Fi Ltd (ASX: JBH) and TechnologyOne Ltd (ASX: TNE), but go all the way down to smaller companies like Vulcan Steel Ltd (ASX: VSL) and Mader Group Ltd (ASX: MAD).

Crucially, the largest stocks in this portfolio account for no more than 3% each in weighting terms. That means that, unlike an ASX 200 fund, you won't be potentially overexposed to a single company.

This index fund has proven to be a solid investment over long periods of time. As of 31 October, the Vanguard Small Companies Index ETF has delivered an average return of 8.75% per annum over the past ten years.

Although past performance is no guarantee of future returns, that healthy figure gives me confidence that this index fund will continue to be a great long-term investment.

In today's expensive market, the VSO ETF offers investors many potential positives. As such, if I could only buy and hold a single ASX stock right now, this would be it.

The post If I could only buy and hold a single ASX stock right now, this would be it appeared first on The Motley Fool Australia.

Small-cap companies tend to do better when rates are lower because this reduces the cost of the debt they need to carry to keep on investing in their growth and development.

ETF issuer Vanguard says small-cap options are already more popular with US investors following the Federal Reserve's two interest rate cuts this year.

There was the bigger-than-expected first rate cut of 50 basis points in September, followed by a second rate cut of 25 basis points this month.

In the latest quarterly Vanguard ETF Industry Perspectives newsletter, equity index senior investment product manager, Andrey Kotlyarenko said money flows into small-cap US ETFs have been increasing.

Historically, he said this was a pattern that usually coincided with interest rate cuts.

Kotlyarenko commented:

The Fed's 50-basis-point rate cut—its first cut since before the Fed began raising rates in response to the inflationary spike driven by the COVID-19 pandemic—created a fresh opportunity to look closely at small-cap equities, which historically have outperformed the broader market after rate cuts.

The lower cost of capital that has followed rate cuts has correlated with investors showing greater interest in smaller companies, whose growth prospects can be hampered when borrowing costs are high.

Historical link between small-cap ETFs and interest rates

With further rate cuts expected in many countries next year, including Australia, Kotlyarenko said investors appeared more bullish on small-cap stocks now.

Kotlyarenko said Q3 inflows into small-cap ETFs in the US had leapt to $16.5 billion. This was higher than the inflows over the previous six months, which only totalled $9.4 billion.

The trend of small-cap ETFs performing better when rates are lower or falling is universal across the most recent historical rate-cutting cycles, Kotlyarenko said.

He commented:

During other rate-cutting cycles—such as the dot-com bubble, the global financial crisis, and the post-COVID pandemic recovery—interest in small-caps spiked.

In the 12 months following those initial rate cuts, returns of the four main US small-cap indexes performed strongly.

More to the point, each of these indexes outperformed the broad equity market during those past rate-cutting cycles.

But crucially, each small-cap index isn't built quite the same as another, so their performances can diverge.

For example, during the first year of COVID-19, when central banks worldwide slashed interest rates, the four main US small-cap indexes soared.

However, there was a 6.66% disparity in performance between the No. 1 performing index, the Russell 2000, and the No. 4 performing index, the CRSP US Small Cap Index.

Let's examine some of the ASX ETFs available to Aussie investors that track small-cap stocks either here or overseas, and review how they are performing in the year-to-date (YTD) and over the past 12 months.

How are small-cap ASX ETFs performing?

In 2024, we have indeed seen an increase in the unit price of several ASX small-cap ETFs.

Not only that, but some of them are outperforming ASX ETFs that track the ASX 200 or ASX 300, which incorporate large-caps like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

Below are four examples of ASX ETFs tracking small-cap shares. Take note of their year-to-date and 12-month growth rates compared to those of two peers that track the ASX 200 and ASX 300.

The iShares Core S&P/ASX 200 ETF (ASX: IOZ) tracks the S&P/ASX 200 Index (ASX: XJO). On Tuesday, it is trading for $33.84 per unit, up 9.7% YTD and 19.84% over 12 months.

The Vanguard Australian Shares Index ETF (ASX: VAS) tracks the S&P/ASX 300 Index (ASX: XKO). Today, it is trading for $104.26 per unit, up 10.69% YTD and 20.12% over 12 months.

ASX ETFs tracking Aussie small-cap shares

iShares S&P/ASX Small Ordinaries ETF (ASX: ISO)

The iShares S&P/ASX Small Ordinaries ETF is trading at $4.85 per unit. It's up 6.59% in 2024 and up 17.15% over the past 12 months.

The ISO ETF aims to track the performance of the S&P/ASX Small Ordinaries Accumulation Index, before fees.

The index measures the performance of small-cap ASX shares in the ASX 300, excluding the S&P/ASX 100 Index (ASX: XTO).

The ETF's top three underlying holdings are Life 360 Ltd (ASX 360), Alcoa Corporation CDI (ASX: AAI), and Zip Co Ltd (ASX: ZIP). The management fee is 0.55%.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

The Vanguard MSCI Australian Small Companies Index ETF is trading at $69.76 per unit. It's up 9.86% in 2024 and up 18.44% over the past 12 months.

The VSO ETF aims to track the performance of the MSCI Australian Shares Small Cap Index before fees. The index includes stocks that pass certain liquidity and market capitalisation criteria.

Its top three holdings are Evolution Mining Ltd (ASX: EVN), NextDC Ltd (ASX: NXT), and JB Hi-Fi Ltd (ASX: JBH). The management fee is 0.3%.

ASX ETFs tracking US or international small-cap shares

iShares S&P Small-Cap ETF (ASX: IJR)

The iShares S&P Small-Cap ETF is trading at $196 per unit. It's up 22.68% in 2024 and up 33.79% over the past 12 months.

The IJR ETF aims to track the performance of the S&P Small-Cap 600, before fees.

The index measures the performance of the small-cap segment of the US stock market. It is comprised of 600 companies with a market capitalisation of between US$1 billion and US$6.7 billion.

The ETF's top three equity holdings are Mueller Industries Inc (NYSE: MLI), Carpenter Technology Corporation (NYSE: CRS), and Comerica Inc (NYSE: CMA). The management fee is 0.07%.

Vanguard MSCI International Small Companies Index ETF (ASX: VISM)

The Vanguard MSCI International Small Companies Index ETF is trading at $70.31 per unit. It's up 17.84% in 2024 and up 25.06% over the past 12 months.

The VISM ETF seeks to track the returns of the MSCI World ex-Australia Small Cap Index (with net dividends reinvested) in Australian dollars before fees.

The index tracks the performance of small-cap companies in 22 developed countries (excluding Australia). They include the United States, Canada, Japan, and Europe.

Its top three holdings are Carvana Co (NYSE: CVNA), Interactive Brokers Group, Inc. (NASDAQ: IBKR), and Nutanix Inc (NASDAQ: NTNX). The management fee is 0.32%.

The post Here's why small-cap ASX ETFs are on the rise appeared first on The Motley Fool Australia.

They provide investors with an easy way to buy a large and diverse group of shares through a single investment.

But which ASX ETFs could be top options for investors in December? Three that could be worth considering are listed below:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first ASX ETF that could be a great option for investors in December is the hugely popular BetaShares NASDAQ 100 ETF.

This ETF provides investors with access to 100 of the largest (non-financial) companies listed on the famous NASDAQ exchange.

Among the high quality shares that you'll be buying a slice of are global giants such as Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook), Microsoft, Netflix, Nvidia, and Tesla. BetaShares highlights that this provides investors with access to a high-growth potential sector that is under-represented on the Australian share market.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ASX ETF that could be a great option for investors in December is the VanEck Vectors Morningstar Wide Moat ETF.

This ETF could be particularly good if you're a fan of Warren Buffett and want to follow his investment style. That's because it gives investors access to a group of fairly valued companies that have sustainable competitive advantages (or moats). These are qualities that Buffett looks for when identifying investments.

There are approximately 50 shares included in the index that boast these qualities at present. This includes the likes of Adobe, Etsy, Nike, Starbucks, and Walt Disney.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

If small caps are more your thing then the Vanguard MSCI Australian Small Companies Index ETF could be worth considering.

Especially with interest rate cuts on the horizon and many analysts tipping the small side of the market to rally when the RBA takes action.

This ASX ETF gives investors access to almost 200 small-cap Australian shares. However, unlike many other small-cap focused ETFs, VSO has been designed to include a range of mid and small-caps and not just the tail end of the stock market.

Among its holdings are companies such as appliance manufacturer Breville Group Ltd (ASX: BRG), metal detector company Codan Ltd (ASX: CDA), lithium miner Liontown Resources Ltd (ASX: LTR), and property listings company Domain Holdings Australia Ltd (ASX: DHG).

The post 3 of the best ASX ETFs to buy in December appeared first on The Motley Fool Australia.

Unlike the vast majority of its competitors, Vanguard is a not-for-profit institution founded by the late, great Jack Bogle in the 1970s to prioritise the wealth of its clients.

We can see this ethos continue today, with Vanguard amongst the most widely trusted ETF providers on the ASX. Vanguard's ETFs and index funds also tend to be amongst the cheapest on offer, thanks to the lack of profit prioritisation.

I myself own two Vanguard products. I intend to hold these investments indefinitely and add to them whenever I can. Let me explain why I chose these funds.

Why I buy and own these two Vanguard ETFs

First, we have the Vanguard Australian Shares Index ETF (ASX: VAS). VAS is the most popular index fund and ETF on the ASX and by a mile.

It is a simple index fund that tracks the S&P/ASX 300 Index (ASX: XKO), which reflects the performance of the largest 300 stocks in the Australian share market.

I invest in this Vanguard ASX ETF for two primary reasons. The first is that VAS offers wonderful diversification. Holding 300 individual stocks spreads out risk and offers returns from a wide variety of different, high-quality stocks.

I enjoy investing in a fund that contains everything from Telstra Group Ltd (ASX: TLS) and Westpac Banking Corp (ASX: WBC) to AGL Energy Ltd (ASX: AGL) and Qantas Airways Ltd (ASX: QAN). VAS has also historically delivered a healthy mix of capital growth and dividend income.

The second reason I own VAS units is for insurance of sorts. In addition to buying ASX ETFs, I also invest in individual stocks. I'd like to think that these individual stock picks will outperform the Vanguard Australian Shares ETF over my lifetime. However, studies show that this is a difficult task to achieve. As such, I concurrently invest in this index fund in case my other stock picks don't deliver.

But I also own another Vanguard ETF that compliments VAS quite nicely. It's the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO).

Covering all bases with ASX ETFs

As the name implies, this index fund also covers ASX shares, but only those on the smaller end of the market.

The VAS ETF is heavily tilted towards the largest companies on the ASX – predominantly the banks and miners. This can be great for dividends but leaves an investor relatively underexposed to many of the ASX's up-and-comers.

That's where VSO comes in. It holds around 170 smaller stocks that offer a boatload of Australian diversification that I believe compliments VAS nicely. With these two Vanguard ASX ETFs, I think I have a perfectly balanced exposure to the best that our markets have to offer.

Foolish takeaway

To be fair, these two Vanguard ETFs are not the only funds that I own. Other providers offer products and markets that Vanguard doesn't.

That's why, in addition to VAS and VSO, you'll find the VanEck Morningstar Wide Moat ETF (ASX: MOAT) in my portfolio, as well as the iShares Global Consumer Staples ETF (ASX: IXI) and the BetaShares Nasdaq 100 Currency Hedged ETF (ASX: HNDQ).

Even so, Vanguard will always be my favourite ASX ETF provider.

The post I own 2 Vanguard ASX ETFs. Here's why I own each one appeared first on The Motley Fool Australia.

As such, I do not see too much value in many of the ASX's most popular shares right now. That particularly includes the big four banks like Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB). But also with other ASX blue chips like Woolworths Group Ltd (ASX: WOW) and CSL Ltd (ASX: CSL).

However, I do think there are some ASX shares worth considering today. Here are the four stocks I would most likely buy if I got an unexpected windfall of cash right now.

My top four ASX shares to buy right now

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is a listed investment company (LIC) that invests in a portfolio of underlying shares on behalf of its owners. These are usually American stocks and currently include the likes of Amazon, Meta Platforms, Mastercard and Home Depot.

MFF has a long history of delivering strong returns to its shareholders. It has also been increasing its dividend rapidly over the past few years. Currently, this LIC trades at a substantial discount to its underlying net asset value (NAV).

Earlier this week, the company confirmed that its pre-tax NTA was sitting at $4.33 a share, well over its current share price (at the time of writing) of $3.78. That effectively means you're buying $4.33 worth of assets for $3.78 right now. That's enough to make this stock a buy in the current market in my eyes.

Vanguard Australian Shares Index ETF (ASX: VAS)

My go-to buy when the market is hot is usually a simple index fund in the Vanguard Australian Shares ETF. Yes, it contains the stocks listed above, like CBA, NAB, and Woolies. But given the inherent diversification this ETF provides, as well as its long history of delivering solid returns, it makes a great all-weather investment.

With VAS, you are getting a slice of the entire ASX market. Well, a slice of the largest 300 stocks on the ASX, to be specific. This diversified index fund has historically offered decent capital growth, as well as hefty franked dividend income potential.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Another exchange-traded fund (ETF), VSO is a great index fund to hold if you want to buff up your exposure to the smaller end of the ASX (i.e. not the big banks and miners). Instead of holding the largest 300 stocks on the ASX, this ETF offers exposure to mid- and small-cap stocks. To illustrate, its current largest holdings are shares like NextDC Ltd (ASX: NXT) and Altium Ltd (ASX: ALU).

This ETF offers hefty dividend income potential as well, but I think it also has the potential to deliver higher capital growth than VAS over a long time horizon.

iShares Global Consumer Staples ETF (ASX: IXI)

Finally, let's talk about yet another ETF, this one with exposure to international stocks, rather than ASX shares.

The iShares Global Consumer Staples ETF is a thematic fund that invests in companies from all around the world, but only those within the consumer staples sector. These consumer staples stocks are usually companies that produce and sell food, drinks, alcohol and tobacco products, and household essentials.

Some examples of IXI's current holdings include Procter & Gamble, Walmart, Coca-Cola and L'Oreal.

I love investing in these kinds of companies, thanks to their defensive earnings bases. These tend to remain robust regardless of the economic weather, which is why this ETF is a go-to pick for me in this current red-hot market.

The post Here are my top 4 ASX shares to buy right now appeared first on The Motley Fool Australia.