Has the Vanguard Australian Shares ETF (VAS) been a worthwhile investment over the past decade?

A smiling woman with a satisfied look on her face lies on a rug in her home with her laptop open and a large cup on the floor nearby, gazing at the screen. researching new ETFsA smiling woman with a satisfied look on her face lies on a rug in her home with her laptop open and a large cup on the floor nearby, gazing at the screen. researching new ETFs

It’s been a rough year so far for the Vanguard Australian Shares Index ETF (ASX: VAS). The exchange-traded fund (ETF) has fallen nearly 7% year to date.

But looking longer-term, say, over the last 10 years, has it proven a worthwhile investment? Let’s take a look.

Right now, units in the Vanguard Australian Shares ETF are swapping hands for $90.40.

Has Vanguard Australian Shares ETF been a good 10-year buy?

Those invested in the Vangaurd Australian Shares ETF will likely have been slightly disappointed this year as the fund underperforms the index it’s intended to track.

The ETF is designed to reflect the return of the S&P/ASX 300 Index (ASX: XKO). Indeed, they appear very similar in most measures.

The ETF holds 307 stocks right now, compared to the index’s aptly-named, 300. They both offer a 4.5% dividend yield and focus most of their holdings in Australia.

However, the ETF has fallen 6.9% this year while the index is down 4.8%. Looking longer-term, the same applies. The ETF’s share price has gained around 61% over the last 10 years while the index has lifted 67%.

However, the true benefits of investing come into play when we factor in dividends.

According to Vanguard, the Australian Shares ETF boasts a cumulative 10-year return of around 130% – that’s certainly nothing to scoff at.

Indeed, a $10,000 investment in the fund on 31 October 2012 would have been worth $22,861.27 at the end of last month. That’s not a bad return for a single decade.

The ETF boasts $28 billion of assets under management. 9% of that is tied to BHP Group Ltd (ASX: BHP) shares. Another 8.5% is invested in Commonwealth Bank of Australia while CSL Limited (ASX: CSL) makes up 6.4%. It commands a 0.1% annual management fee.

The post Has the Vanguard Australian Shares ETF (VAS) been a worthwhile investment over the past decade? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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