Is VGS a good ETF?
VGS is the Vanguard MSCI Index International Shares ETF from Vanguard. It tracks the MSCI World ex Australia Index. We classify it under Intl, Large-Cap, and Market-Cap. With about $50.15 billion in assets it is a large, highly liquid fund. Listed on the ASX since 2014-11-18 (almost 12 years ago).
On a total-return basis, VGS has delivered 13.78% a year over 10 years (ranked 16th of 108 ETFs we track), 12.32% a year over 5 years (ranked 27th of 188 ETFs we track), 16.66% a year over 3 years (ranked 50th of 226 ETFs we track), and 10.45% a year over 1 year (ranked 122nd of 308 ETFs we track). Its strongest showing is over 5 years, where it sits in the top 14% of all ETFs we track.
The management fee of 0.18% is reasonable. That's cheaper than the typical 0.48% for similar ETFs. If cost is your priority, BGBL (0.08%) and IWLD (0.15%) cover similar ground for less. It pays a low 1.28% 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 10.85%), meaning the kind of swings you'd expect from a diversified equity fund. Its 10-year Sharpe ratio of 1.05 is strong — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is very low at about 3% 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-14% returns over 5 years (27th of 188 ETFs we track).
- Low-cost: a 0.18% management fee keeps more of the return in your pocket.
- Strong risk-adjusted returns (10-year Sharpe ratio 1.05).
Things to watch
- Cheaper alternatives exist: BGBL and IWLD.
Good to know
- Low 1.28% yield — this is a growth-oriented fund, not an income play.
What VGS'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.
The biggest, most established companies. More stable earnings, lower volatility and often steadier dividends than the broad market.
- Market regime
- Holds up comparatively well in downturns and uncertain markets; tends to lag small-caps and growth during the most aggressive bull runs.
- In a portfolio
- A dependable core building block suited to long-term holding.
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.