Is VGB a good ETF?
VGB is the Vanguard Australian Government Bond Index ETF from Vanguard. It tracks the Bloomberg AusBond Govt 0+ Yr Index. We classify it under AU and Bonds. With about $1.4 billion in assets it is a large, highly liquid fund. Listed on the ASX since 2012-10-15 (about 14 years ago).
On a total-return basis, VGB has delivered 1.13% a year over 10 years (ranked 104th of 110 ETFs we track), -0.53% a year over 5 years (ranked 167th of 189 ETFs we track), 3.17% a year over 3 years (ranked 214th of 236 ETFs we track), and -0.93% a year over 1 year (ranked 232nd of 318 ETFs we track). It has trailed most comparable ETFs over the periods we measure, so look closely at whether its strategy fits what you're after.
The management fee of 0.16% is reasonable. That's cheaper than the typical 0.32% for similar ETFs. If cost is your priority, VAF (0.1%) and IAF (0.1%) cover similar ground for less. It pays a moderate 3.32% yield.
Over the past 10 years its volatility has been low (annualised standard deviation around 4.85%), meaning a relatively smooth ride.
Portfolio turnover is modest at about 25% a year — it reshuffles a meaningful but still limited part of the portfolio annually, which keeps the tax and trading drag manageable.
Strengths
- Low-cost: a 0.16% management fee keeps more of the return in your pocket.
- Low volatility (4.85% over 10 years) for a smoother ride.
Things to watch
- Has lagged most peers over 10 years (104th of 110).
- Cheaper alternatives exist: VAF and IAF.
Good to know
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What VGB's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
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.