Is VLC a good ETF?
VLC is the Vanguard MSCI Australian Large Companies Index ETF from Vanguard. It tracks the MSCI Australian Shares Large Cap Index. We classify it under AU, Large-Cap, and Market-Cap. With about $323 million in assets it is a solidly established fund. Listed on the ASX since 2011-05-23 (over 15 years ago).
On a total-return basis, VLC has delivered 9.8% a year over 10 years (ranked 44th of 108 ETFs we track), 9.41% a year over 5 years (ranked 62nd of 188 ETFs we track), 12.54% a year over 3 years (ranked 92nd of 226 ETFs we track), and 10.87% a year over 1 year (ranked 116th of 308 ETFs we track).
The management fee of 0.2% is reasonable. That's cheaper than the typical 0.32% for similar ETFs. If cost is your priority, IOZ (0.05%) and VAS (0.07%) cover similar ground for less. It pays a moderate 3.05% yield.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 13.2%), meaning the kind of swings you'd expect from a diversified equity fund. Its 10-year Sharpe ratio of 0.61 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
- Low-cost: a 0.2% management fee keeps more of the return in your pocket.
Things to watch
- Cheaper alternatives exist: IOZ and VAS.
Good to know
- Distributions are 80% franked, a tax bonus for Australian residents.
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What VLC'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.
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.