Own VTS ETF? It’s a great day for you!

Vanguard will pay dividends to investors in the Vanguard US Total Market Shares Index ETF (ASX: VTS) today.

The official dividend amount is 95.08 US cents per unit.

Vanguard did the currency conversion last Friday, and the AUD payment today will be $1.4155 per unit.

What is the VTS ETF?

The Vanguard US Total Market Shares Index ETF provides exposure to the full US stock market, or about 3,500 companies.

VTS seeks to mirror 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 companies.

They include the Mag 7 stocks — Nvidia Corp (NASDAQ: NVDA), Apple Inc (NASDAQ: AAPL), Microsoft Corp (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class A (NASDAQ: GOOGL), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META), and Tesla Inc (NASDAQ: TSLA).

There’s also two new favourites among Aussie investors, AI and defence software company Palantir Technologies Inc (NASDAQ: PLTR) and semiconductor stock Advanced Micro Devices Inc (NASDAQ: AMD).

There’s also Warren Buffett’s Berkshire Hathaway Inc Class A (NYSE: BRK.A) and Berkshire Hathaway Inc Class B (NYSE: BRK.B).

How did VTS perform in 2025?

US stocks outperformed ASX 200 shares for a third consecutive year in 2025.

At the time of writing, the Center for Research in Security Prices (CRSP) has not yet released total return data for the CRSPTM1 index.

However, we can use other US stock indices to get an idea of how the total US market, which is what VTS captures, performed.

The US benchmark index, the S&P 500 Index (SP: INX), soared 16.39% and delivered total returns of 17.88%.

The Nasdaq Composite Index (NASDAQ: .IXIC) did even better, rising 20.36% with total returns of 21.33%.

The Dow Jones Industrial Average Index (DJX: .DJI), which tracks 30 S&P 500 stocks, rose 12.97% and gave a total return of 14.92%.

By comparison, S&P/ASX 200 Index (ASX: XJO) shares rose 6.8% and produced total returns of 10.32%.

So, there was a clear outperformance of US stocks vs. ASX shares.

However, those stronger returns did not translate directly to VTS holders because the stronger AUD against the USD diluted them.

After conversion into AUD, the VTS returned 8.79% to Aussie investors last year, or 8.76% after the 0.03% management fee.

That’s less than the ASX 200’s total return of 10.32%.

This highlights the role of the currency exchange in ASX ETF returns.

For the past few years, the currency exchange magnified the returns for VTS investors, but things have now changed.

In 2025, the Aussie dollar rose from about 62 US cents in January to about 67 US cents by December.

Investors may wish to consider hedged ETF options if they believe the AUD is likely to remain stronger than the USD for a prolonged period.

Vanguard does not offer a hedged version of the VTS ETF.

The post Own VTS ETF? It’s a great day for you! appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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 Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.