VAS - Vanguard Australian Shares Index ETF

[Belli]

personally i prefer high growth and little to no yield, which is why i did consider, but ultimately passed on VAS and went for the IVV + VEU combo instead when i was converting from being primarily an options trader to becoming a long term index investor several years ago. that's just me though.

I did consider the total return position at one stage with a view to selling down over time due to the favourable CG aspect but went for moderate growth plus income. Prefer to buy my groceries with the cash in bank rather than worrying about which tranche of 5 units I'd need to sell. . I have avoided those products which generate a high yield by returning a large proportion of capital.

When I first started investing there wasn't much I could find listed which gave international exposure. Sure there were unlisted funds but I got burnt with them so after extracting myself from them stuck to LICs. Now, since I have a bucket load in LICs and in VAS, while I still invest in VAS and sometimes in LICs, a large portion of my funds are directed towards VGS which in itself has a large exposure to the US with which I am comfortable. Emerging markets would have been a possibility in the past but not for me now with the greater associated risk (as defined by me for me. )

But as you imply it's an individual thing.

Generally I feel if investors stick to broad based, relatively low cost entities and not jump for what may appear the "next best thing" as some apparently do, while they may not shoot the lights out they won't go far wrong either.

 

[divs4ever]

i am VERY CAREFULLY trying to increase my exposure to India , that is currently via 2 LICs ( PAI and EAI ) and one ETF ( IIND ) and also hold ASIA , but crikey India is a tough place to research

but mostly focused on Australia and NZ ( and a much lesser extent to PNG )

but looks like a time to be careful ( but not paralyzed with fear )

 

[Sharkman]

I did consider the total return position at one stage with a view to selling down over time due to the favourable CG aspect but went for moderate growth plus income. Prefer to buy my groceries with the cash in bank rather than worrying about which tranche of 5 units I'd need to sell.

that's fair enough, there's definitely a big drawcard to having the funds just appear in your account automatically, ready to be spent on living life. i'm still willing to go thru the hassle of selling units to raise cash as necessary though, i like the tax flexibility of being able to sell just enough units to suit the situation i'm in eg. being able to stop on a dime right before my trust beneficiaries creep into the next bracket, and get the 50% CGT discount on those units.

the other reason i'm not so keen on yield is that companies with a high payout ratio aren't reinvesting their profits to fuel their own growth. if a company is capable of a 20%+ ROE, i don't want them paying me a dividend, i'd rather they keep it and pump it back into growing their own business. of course nothing's ever guaranteed, but this should in theory generate better total return in the form of capital growth over the long term. investors in many developed nations, particularly the US, adopt this philosophy. but for some reason Aust investors in general are fixated on yield over total return (maybe it's the franking credit effect, i'm not sure).

 

[Belli]

the other reason i'm not so keen on yield is that companies with a high payout ratio aren't reinvesting their profits to fuel their own growth.

It's an interesting point. I don't know the payout ratio of individual companies in Australia although I was informed Macquarie's latest was below 60%. I do know that presently the ratio for the LICs I hold are above 100% due to using some reserves but LICs are a different beast so really not a comparison.

It's a fine balancing act I think for companies and sometimes too much cash goes to their head so they back up the B-Double and shovel the money into a furnace on some hair-brained scheme (Bunnings' O/S adventure, Woolworths & Masters, BHP & Magna.). In those cases I feel shareholders would have preferred to get the cash.

And of course you are in a different situation than I as I don't have a discretionary or family trust in operation and therefore no trust beneficiaries. I simply give my kids cash once in a while so it's tax-free in their hands. Hey, they're going to get the lot eventually so they may as well have some of it now.

 

[Sharkman]

It's a fine balancing act I think for companies and sometimes too much cash goes to their head so they back up the B-Double and shovel the money into a furnace on some hair-brained scheme (Bunnings' O/S adventure, Woolworths & Masters, BHP & Magna.). In those cases I feel shareholders would have preferred to get the cash.

yeah there's going to be a few cases of that across the broader market, and it sure doesn't feel great when you've directly invested in a company that fritters away capital like that (i got burned a bit by the Masters fiasco myself, i bought some WOW back in the early 2000s as a buy & hold position when i first started working, before i set up my trust, got into options trading and well before i switched to index investing).

but if investing in an entire index, i don't think it has that much of an impact, the weighting of such companies shrinks over time as a result of their misadventures, and the fund should end up buying more and more of the companies who continue to reinvest their profits well and produce better and better products, so it works itself out in the long run.

behemoths like Microsoft, Apple, Nvidia etc. probably don't become what they are today if they'd paid out a 5% dividend instead of paying the zero or sub-1% that they did, and retaining the rest to ensure they had the capital to fund product R&D. closer to home i guess our closest equivalent would be CSL, which also pays a yield of around 1%, and has done for many years.

 

[Belli]

Yes, the home country bias. The concept has been around for a long time. Here is a recent blog opinion on the subject; there are many more.

Home Country Bias Investing And Why It Can Be A Big Problem

All of us are patriots to some degree. However, it's good to beware of home country bias to protect ourselves from unexpected risk. Home country bias refers to investors' tendency to favor companies from their own country over those from other countries or regions. After all, it's usually better...

www.financialsamurai.com

 

[divs4ever]

i would counter that with Buffet's ' invest in what you understand '

yes i have some international ( focus ) exposure ( although ASX listed ) VUK and JHG and a lesser extent PDL for the UK , a collection of NZ based companies , KSL for PNG a few LICs and ETFs that invest in Asia , ZIM operating in Africa , but i am looking at the geopolitics and am not seeing a compelling picture the go into distant shores , add FX rate risk , i am very wary

maybe after the war ( that is coming )

 

[Belli]

VAS announced an estimated distribution for the September quarter of $1.44794 ($1.407 for pcp) payable on 18 October.

 

[Belli]

VAS has announced an estimated distribution of $0.746624 for the December quarter. PCP was $0.696.

 

[Belli]

The share registry for Vanguard is starting to get its act together. If holding say VGS & VAS, both are included on one distribution statement although that statement is in each folder for VAS & VGS.

Funds should hit my accounts cleared and available around mid-morning.

 

[Belli]

Vanguard advises estimated distribution for VAS is $0.576988 (pcp $1.9985.) Payable 20 April.

 

[divs4ever]

reduced my holding yesterday

i see dividends ( in the share portfolio ) being under pressure ( in general not every company )

 

[Belli]

That's going to be interesting for the June distribution.

 

[divs4ever]

That's going to be interesting for the June distribution.

View attachment 156552

well the passive index funds should all benefit , where things should differ are the various 'high yield ' ETFs , the 'high yield' strategies varied quite a bit

don't ignore the impact of BKL if that take-over crosses the line in time for the June distribution , although some ETFs might be crystallizing a loss on BKL , if they bought in late in the initial big spike a few years back

 

[Belli]

That is a dumb statement which displays your ignorance of how indexing actually works.

 

[frugal.rock]

i hold VAS ( basically my DRP shares left running , and still participating in the DRP , but maybe

I find the problem here being the share price restricting smaller holdings participating in the DRP, otherwise, I might have a holding.

 

[frugal.rock]

computers have their moments as well

Old people have more moments, now where was I ?
Why am I in a shopping centre in my pyjamas and slippers?

 

[sptrawler]

I find the problem here being the share price restricting smaller holdings participating in the DRP, otherwise, I might have a holding.

How much of a holding do you need to have to participate? I've been sitting on a stash and waiting for armageddon, to enter.

 

[frugal.rock]

It's the price of each share being around $90 each being restrictive on the DRP.
Need a fair size holding to start off with.

 

[Belli]

How much of a holding do you need to have to participate? I've been sitting on a stash and waiting for armageddon, to enter.

One unit.

However, you will not be allocated any additional units under the DRP until the carry-forward balance is sufficient for that to occur.

That's if you're buying on market. If you're doing it through one of those stake type of brokerages, you appear to be allocated a fraction of a unit but really all you have is "an interest in" a portion of a unit.