Is VAE a good ETF?
VAE is the Vanguard FTSE Asia ex Japan Shares Index ETF from Vanguard. It tracks the FTSE Asia Pacific ex Japan, Australia and New Zealand Index. We classify it under Asia, EM, and Market-Cap. With about $760 million in assets it is a solidly established fund. Listed on the ASX since 2015-11-11 (almost 11 years ago).
On a total-return basis, VAE has delivered 10.24% a year over 10 years (ranked 39th of 108 ETFs we track), 8.85% a year over 5 years (ranked 69th of 188 ETFs we track), 17.71% a year over 3 years (ranked 37th of 226 ETFs we track), and 24.14% a year over 1 year (ranked 33rd of 308 ETFs we track). Its strongest showing is over 1 year, where it sits in the top 11% of all ETFs we track.
The management fee of 0.4% is reasonable. For comparison, similar ETFs average around 0.3%. If cost is your priority, VEU (0.04%) and IAA (0.29%) cover similar ground for less. It pays a low 1.4% yield, so most of its return must come from capital growth.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 12.49%), meaning the kind of swings you'd expect from a diversified equity fund. Its 10-year Sharpe ratio of 0.67 is reasonable — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is very low at about 5% a year — the portfolio barely changes from year to year, much like a classic buy-and-hold index fund. Very little of its return is lost to trading or to capital gains being realised early, making it highly tax-efficient.
Strengths
- Top-11% returns over 1 year (33rd of 308 ETFs we track).
- Low-cost: a 0.4% management fee keeps more of the return in your pocket.
Things to watch
- Pricier than similar ETFs, which average around 0.3%.
- Cheaper alternatives exist: VEU and IAA.
Good to know
- Low 1.4% yield — this is a growth-oriented fund, not an income play.
What VAE's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Equities across Asian markets (often ex-Japan, frequently weighted to China, India, Taiwan and Korea). Exposure to faster-growing economies, with extra political, currency and governance risk.
- Market regime
- Tends to lead during global risk-on phases and when the US dollar is weak; lags badly in risk-off, flight-to-safety episodes.
- In a portfolio
- Best used as a satellite position to add growth and diversification, not as a core holding. Long horizon and tolerance for big swings required.
Emerging markets — developing economies such as China, India, Brazil and Taiwan. High growth potential with materially higher volatility, currency and political risk.
- Market regime
- Often trades at cheaper valuations than developed markets and performs well in global risk-on phases and when the US dollar is weak. Can endure long stretches of underperformance.
- In a portfolio
- A satellite growth allocation for patient investors with a long horizon and tolerance for big swings.
Holdings are weighted by company size, so the largest companies carry the most weight. These funds are cheap, tax-efficient and self-rebalancing.
- Market regime
- Works in almost any regime as a low-maintenance core. The trade-off is concentration — you automatically own more of whatever has already become expensive at the top of a bull market.
- In a portfolio
- The classic buy-and-hold core of most portfolios. Well suited to long-term, hands-off investing.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.