There’s a wide variety of exchange-traded funds (ETFs) out there that investors can choose. The Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular ASX-listed ETF, and for good reason, in my opinion.

When I say it’s the most popular, I’m talking about how much money is currently invested in the ETF.

At the end of August 2026, $26.9 billion was invested in the VAS ETF, a significant sum that has grown substantially over the last few years as more investors allocate money to ETFs.

Easy way to invest in the ASX 300

ETF investing has made it very easy for everyday Australians to gain access to the stock market without needing an advanced understanding of shares to gain access to the market average return.

You don’t need to make gigantic returns to see pleasing financial results thanks to the power of compounding. If an investment delivers an 8% return per year, it will double in value in approximately nine years.

Investing in the VAS ETF gives investors exposure to the S&P/ASX 300 Index (ASX: XKO), an index of 300 of the largest and most impressive ASX shares.

The biggest businesses get the largest allocation in the portfolio. For the Vanguard Australian Shares Index ETF, the largest 10 holdings represent 47.5% of the total ETF. Those 10 holdings are:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Wesfarmers Ltd (ASX: WES)
• Macquarie Group Ltd (ASX: MQG)
• CSL Ltd (ASX: CSL)
• Rio Tinto Ltd (ASX: RIO)
• Woodside Energy Group Ltd (ASX: WDS)

Another underrated aspect of investing in the VAS ETF (and others like it) is that the portfolio regularly updates. We don’t need to think about which stocks to buy and sell – the ETF does that for us and simply holds the names that correspond with where they fit in the index.

If a current holding suffers, it will drop down the holding list and play a smaller part in the ETF’s future returns. If there’s a newcomer that is soaring, it will play a bigger part in the ETF’s holdings as time goes on.

Passive income

One advantage the ASX share market offers, compared with many other share markets, is the scale of passive income it provides.

The ASX 300 has a pleasingly high dividend yield thanks to the fact that the largest businesses have a high dividend payout ratio and a relatively low price/earnings (P/E) ratio compared to other sectors like technology and healthcare.

According to Vanguard, at the end of August, the VAS ETF had a dividend yield of 3.1%, excluding franking credits. Compared to most share markets, that’s a solid level of dividend income.

It’s a good idea to re-invest dividends for long-term compounding, but investors can also enjoy the passive income payments for their life spending.

Low costs

One of the best reasons to invest in the VAS ETF is the very cheap management costs. The lower the fees, the more of the net returns stay in the hands of the investor.

According to Vanguard, the VAS ETF has an annual management fee of just 0.07%. That’s extremely low and means we can virtually match the ASX 300 return.

Of course, it’s important to note that the VAS ETF does provide a lot of exposure to the largest holdings, so it could be a good idea to balance with other investments.

For example, an investor could utilise the VanEck Australian Equal Weight ETF (ASX: MVW) or pick market-beating individual ASX stocks to boost their portfolio’s overall return.

The post 3 reasons why the Vanguard Australian Shares Index ETF (VAS) is a solid buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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, Macquarie Group, and Wesfarmers. The Motley Fool Australia has recommended BHP Group, CSL, Macquarie Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The analysts at Barrenjoey are tipping significant upside for Navigator Global Investments Ltd (ASX: NGI) shares following the company’s sale of its stake in Invictus Capital.

Strong return on investment

Earlier this week, Navigator said New York Life Investment Management would acquire a 60% stake in Invictus Capital Partners from Navigator and other shareholders, with the remaining interest to be purchased in 2031.

Navigator said the deal delivered it material upfront proceeds of US$40 million to US$43 million, with a potential earn-out of up to US$32 million in 2030.

An additional consideration would be determined by Invictus’ future business growth, Navigator added.

The company said the transaction implied a materially higher valuation for Invictus compared to its initial investment in 2022.

Navigator added:

For NGI, the Transaction represents a partial realisation at an attractive valuation, while retaining meaningful exposure to Invictus’ ongoing growth and performance over the multi-year period to 2030 through retained interests, existing carried interest and fund investments, and potential future consideration. The Initial Closing is expected to occur in the first quarter of 2027, subject to customary closing conditions and regulatory approvals. It is anticipated to deliver a significant return on NGI’s invested capital, with value realised through upfront proceeds at the Initial Closing, potential earn-out consideration and additional consideration at the Deferred Closing in 2031.

Navigator Chief Investment Officer Ross Zachary said the deal “serves as an example of how NGI’s partnership model can create value for all stakeholders of alternative investment management firms”.

Navigator added:

NGI first partnered with Invictus in August 2022, with total consideration of approximately US$115 million paid over three years. Since then, Invictus has more than tripled gross assets, generating strong outcomes for its investors and extending its leadership position in the U.S. residential mortgage credit market. The results of the partnership, including distributions received by NGI and the growth in the value of NGI’s interests before consideration of the Transaction, have exceeded NGI’s return targets and generated an attractive return for shareholders.

Analysts like the look of the deal

Barrenjoey analysts said in a note to clients that the deal highlights that the price for one of Navigator’s private market firms was well above the valuation it is trading on.

They added:

We estimate a PE for the sale in the high teens, perhaps into the 20s based on management fee-only profits.

Barrenjoey has a price target of $4.20 for Navigator shares, compared with the current $2.43.

Macquarie also issued a new research note on Navigator following the announcement, with a price target of $3.24.

Navigator is valued at $1.51 billion.

The post Barrenjoey tips this ASX financial stock to rise 73% appeared first on The Motley Fool Australia.

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• Why is the DroneShield share price surging 9% on Wednesday?

Motley Fool contributor Cameron England 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 Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DroneShield Ltd (ASX: DRO) shares are taking off on Wednesday morning.

The DroneShield share price is currently up 8.98% to $1.76, after closing yesterday at $1.615.

At one stage, the counter-drone stock climbed as high as $1.82 as investors reacted to an update released before market open.

It’s a welcome move for shareholders after a difficult year, with DroneShield shares still down more than 60% over the past 12 months.

So, what has the company announced today?

DroneShield lands huge US opportunity

According to the release, DroneShield’s US subsidiary has secured a new contract with the US Joint Interagency Task Force 401 (JIATF-401).

The 3-year Indefinite Delivery, Indefinite Quantity (IDIQ) contract has a ceiling value of US$500 million.

It gives DroneShield the opportunity to compete for future orders as the US rolls out more counter-drone systems across the country.

These systems will be used to protect military bases, critical infrastructure, and other high-priority locations from drone threats.

However, there is one thing investors need to keep in mind before getting too excited.

The US$500 million isn’t guaranteed revenue, and DroneShield said the contract doesn’t lock in any orders at this stage.

Still, I think this is a pretty big development.

DroneShield now has a way to compete for some potentially large US defence orders over the next 3 years.

US relationship continues to grow

It’s important to note this isn’t DroneShield’s first piece of work with JIATF-401.

Earlier this year, the company secured a $24.9 million contract to supply mobile and fixed-site counter-drone systems.

DroneShield has since delivered its DroneSentry-X Mk2 systems, completing installation, testing, and operator training in around 80 days.

Another 3 systems are also planned under a modification to the original contract.

Could short sellers add fuel to the rally?

There could also be another factor helping DroneShield shares today.

The latest data shows short interest in the company was sitting at 14.76% as of 23 September.

That puts DroneShield at the top of the list as the most shorted stock on the ASX, with plenty of traders betting its share price will fall.

Keep in mind, though, today’s announcement could put some of those short sellers under pressure.

DroneShield shares are already up almost 9%, and if the buying continues, some short sellers could decide it’s time to close their positions.

To do that, they need to buy DroneShield shares back on the market.

That could add more buying pressure and give the share price another boost.

I’d keep a close eye on this stock before the year’s end.

The post Why is the DroneShield share price surging 9% on Wednesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 DroneShield. 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.