Is VHY a good ETF?
VHY is the Vanguard Australian Shares High Yield ETF from Vanguard. It tracks the FTSE Australia High Dividend Yield Index. We classify it under AU and Dividend. With about $8.2 billion in assets it is a large, highly liquid fund. Listed on the ASX since 2011-05-23 (over 15 years ago).
On a total-return basis, VHY has delivered 10.21% a year over 10 years (ranked 41st of 110 ETFs we track), 11.91% a year over 5 years (ranked 37th of 189 ETFs we track), 14.83% a year over 3 years (ranked 85th of 236 ETFs we track), and 12.28% a year over 1 year (ranked 81st of 318 ETFs we track). Its strongest showing is over 5 years, where it sits in the top 20% of all ETFs we track.
The management fee of 0.25% is reasonable. That's cheaper than the typical 0.34% for similar ETFs. If cost is your priority, IOZ (0.05%), VAS (0.07%), and SYI (0.2%) cover similar ground for less. It pays a healthy 3.51% yield, attractive if you want regular income. Bear in mind distributions are taxed each year at your marginal rate, so a high yield is less tax-efficient for higher earners and during the accumulation phase, though 85% franking softens the blow for Australian residents.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 13.38%), 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 modest at about 20% a year — it reshuffles a meaningful but still limited part of the portfolio annually, which keeps the tax and trading drag manageable.
Strengths
- Top-20% returns over 5 years (37th of 189 ETFs we track).
- Low-cost: a 0.25% management fee keeps more of the return in your pocket.
- Pays a useful 3.51% income yield.
Things to watch
- Cheaper alternatives exist: IOZ, VAS, and SYI.
Good to know
- Distributions are 85% franked, a tax bonus for Australian residents.
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What VHY'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.
Targets higher-yielding, cash-generative companies. Popular with retirees and income investors, and in Australia often comes with valuable franking credits.
- Market regime
- Tilts toward 'value' sectors such as banks, resources and utilities. Can lag in growth-led bull markets and concentrate risk, but tends to be more defensive when markets fall.
- In a portfolio
- Good for investors who want income now. Note the higher distributions are taxable each year, which is less efficient for those in higher brackets and in the accumulation phase.
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.