Is VEQ a good ETF?
VEQ is the Vanguard FTSE Europe Shares ETF from Vanguard. It tracks the FTSE Developed Europe All Cap Index. We classify it under Intl and Market-Cap. With about $623 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, VEQ has delivered 9.56% a year over 10 years (ranked 50th of 110 ETFs we track), 9.24% a year over 5 years (ranked 68th of 189 ETFs we track), 14.28% a year over 3 years (ranked 93rd of 236 ETFs we track), and 6% a year over 1 year (ranked 139th of 318 ETFs we track).
The management fee of 0.35% is reasonable. That's cheaper than the typical 0.49% for similar ETFs. If cost is your priority, VEU (0.04%) and IVE (0.32%) cover similar ground for less. It pays a moderate 2.25% yield.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 12.2%), meaning the kind of swings you'd expect from a diversified equity fund. Its 10-year Sharpe ratio of 0.63 is reasonable — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is very low at about 4% 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
- Low-cost: a 0.35% management fee keeps more of the return in your pocket.
Things to watch
- Cheaper alternatives exist: VEU and IVE.
What VEQ's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Global and international shares from outside Australia — broadening you into thousands of companies and the sectors (tech, healthcare) the local market lacks.
- Market regime
- Essential diversification away from the bank-and-resources-heavy ASX. Unhedged versions carry currency risk; hedged versions remove it at a small cost.
- In a portfolio
- A core holding for almost every long-term Australian portfolio.
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.