VAS ETF: The Complete Australian Investor's Guide
A plain-English deep dive into VAS, Vanguard's Australian shares ETF: what it holds, the 0.07% fee, franking credits, and how it compares to A200 and VGS.
By Timothy Hirou GaschereauPublished 13 min read
Try it yourself
VAS is the default Australian shares holding for a whole generation of Aussie investors. One trade on the ASX buys you a slice of roughly 300 of the country's biggest listed companies, for a fee of just 0.07% a year, with a stream of franked dividends attached. Simple, cheap, and quietly effective.
This guide assumes you already know what an ETF is. Here we go deep on what VAS actually holds (and the concentration hiding behind “300 companies”), how the franking credits work, and how it stacks up against A200 and VGS. General information only, not financial advice.
🎯 The essential: VAS is the Vanguard Australian Shares Index ETF (ASX: VAS), tracking the S&P/ASX 300 for a 0.07% fee. It is the classic Australian slice of a portfolio, prized for its fully-and-partly franked dividends, which are a real tax perk for Australian residents. The catch: it is heavily concentrated in banks and miners (nearly 60% of the fund), and Australia is only about 2% of the world market, so VAS is not a complete portfolio on its own. Pair it with an international ETF like VGS.
What VAS actually is
VAS is the Vanguard Australian Shares Index ETF, listed on the ASX since May 2009. It has grown into one of Australia's largest ETFs, with a fund size north of $26 billion. Its job is simple: track the S&P/ASX 300 index, holding around 300 of the biggest ASX companies weighted by size. No stock picking, no active manager. When the ASX 300 rises, VAS rises; when it falls, VAS falls.
It is Australian-domiciled, so no W-8BEN form and simple tax reporting, unlike US-domiciled ETFs. As an index fund it will never beat the market, and never dramatically underperform it. That is the deal, and for most investors it is a good one.
What it holds, and the concentration nobody mentions
Here is the thing “300 companies” hides: the Australian market is lopsided. Two sectors dominate.
The top 10 holdings alone are roughly 40% to 45% of the fund, led by Commonwealth Bank, BHP and CSL. So when you buy VAS, you are making a meaningful bet on Australian banks and miners whether you notice or not. That is not necessarily bad, it is just worth understanding, and it is the core reason to pair VAS with global exposure.
The 0.07% fee, in real dollars
VAS's management fee is 0.07% per year, deducted from the fund's value, never billed to you.
| Portfolio size | Annual fee at 0.07% |
|---|---|
| $10,000 | ~$7 |
| $50,000 | ~$35 |
| $100,000 | ~$70 |
| $500,000 | ~$350 |
A typical actively managed Australian shares fund charges 0.5% to 1.5% a year. On $100,000 that is $500 to $1,500 versus $70. That gap compounds enormously over decades, and it is the whole appeal of index ETFs: boring, low-cost, brutally efficient.
Dividends and franking credits
This is where VAS gets genuinely exciting for Australians, especially on the FIRE path. It pays quarterly distributions (March, June, September, December), and historically the grossed-up yield (cash plus franking credits) has sat in the 4% to 6% range, cash alone nearer 3% to 4%. Treat those as historical ranges, not promises.
The magic is franking credits. Under Australia's dividend imputation system, a company pays 30% tax on its profit, then attaches a credit for that tax to the dividend. At tax time those credits offset your personal tax bill, and if they exceed what you owe, the ATO refunds the difference in cash. VAS distributions are typically around 80% franked, so a big chunk carries this benefit. Our guide to franking credits walks through the mechanics.
Franking credits are only valuable to Australian tax residents with a tax liability to offset (or a low enough rate to get a refund). They are worth the most to retirees, low-bracket earners, and super funds in accumulation phase (taxed at 15%). International ETFs like VGS carry no franking, which is a key part of the VAS vs VGS trade-off. A Distribution Reinvestment Plan (DRP) is available to compound automatically.
Performance, honestly
VAS is not a get-rich-quick vehicle, it is a slow, steady, boring wealth-builder, and that is a compliment. Because it tracks the ASX 300, it delivers the Australian market return minus the tiny 0.07% fee. Over multi-decade periods the ASX has historically returned somewhere around 8% to 10% a year including dividends, but that average hides big swings: up 20% one year, down 30% the next.
One honest caveat: the Australian market has lagged global markets over the past decade, largely because it has almost no exposure to the US tech companies that drove world returns. That is the heart of the VAS vs VGS debate below. Past performance guarantees nothing.
VAS vs A200
One of the most-argued questions in Australian investing, and the honest answer is: it barely matters. Both are excellent.
| Feature | VAS | A200 |
|---|---|---|
| Index | S&P/ASX 300 | Solactive Australia 200 |
| Holdings | ~300 | ~200 |
| MER | 0.07% | 0.04% |
| Manager | Vanguard | Betashares |
| Franking | Yes | Yes |
A200 is cheaper (saving about $30 a year on $100,000). VAS adds 100 smaller companies (a slight small-cap tilt that barely moves returns) and the Vanguard brand. If you already hold one, stay put. Starting fresh and want the lowest cost, A200 edges it; prefer Vanguard and broader coverage, VAS. The long-run difference is negligible. (Full A200 breakdown in our ETF guides.)
VAS vs VGS: the classic Aussie portfolio
This one is not really a versus at all: VAS and VGS are designed to work together. VGS is Vanguard's international shares ETF (developed markets ex-Australia, roughly 1,500 companies). Because Australia is only about 2% of the global market, holding VAS alone is a huge home-country bet. Adding VGS gives you the world.
| Split (VAS / VGS) | Character |
|---|---|
| 30 / 70 | Growth-tilted, less home bias |
| 20 / 80 | Maximum global diversification, less franking |
| 50 / 50 | More franked income, more home bias |
VAS gives you franking credits VGS cannot; VGS has delivered stronger growth this past decade (US tech) and true global spread. The right split depends on your tax situation and how you feel about home bias. Any sensible split will serve you well.
How VAS fits in a portfolio
VAS is a building block, not a whole portfolio. The common shapes: a two-ETF VAS + VGS core; a three-ETF version adding a bond ETF for defensiveness; or skipping DIY entirely for an all-in-one fund like VDHG or DHHF (which hold VAS internally, for a slightly higher fee and less admin). VAS on its own is a concentrated bet on Australian banks and miners; most investors pair it with international exposure.
How to buy VAS
VAS trades on the ASX under the ticker VAS, just like a share. Open a broker (CommSec, Pearler, Superhero, Stake, SelfWealth), verify your ID and TFN, deposit AUD, search “VAS” and place a buy order (a limit order near the current price is sensible). Settlement is T+2. New to this? See how to buy shares in Australia and how to choose a broker. Pearler's auto-invest suits dollar-cost averaging; set up the DRP through Computershare to reinvest.
Common mistakes with VAS
- Going VAS-only. Australia is about 2% of global market cap. VAS alone is a massive home-country bias. Add international exposure.
- Ignoring concentration risk. Financials and materials are nearly 60% of the fund. If banks or miners have a rough decade, you will feel it.
- Chasing yield over total return. The franked dividends are attractive, but capital growth matters too. A high yield on a stagnant price is no bargain.
- Panic-selling in a crash. VAS fell hard in early 2020 and will fall again next time. Those who held were rewarded; those who sold at the bottom locked in the loss.
- Treating it like a savings account. VAS is a sharemarket investment with real volatility. Do not park money you need within 2 to 3 years in it.
❓ Frequently asked questions
Is VAS a good ETF for beginners?
+
Yes, VAS is one of the most beginner-friendly ETFs in Australia: simple, cheap and backed by Vanguard. The one thing to understand is that VAS alone is not a complete portfolio. Pairing it with an international ETF like VGS gives you proper diversification.
What is VAS's dividend yield?
+
The cash distribution yield has historically sat in the 3% to 4% range, with the grossed-up figure (including franking credits) higher. Yields move with market conditions and the underlying companies' payouts, so check current data on the ASX or Vanguard rather than a historical number.
How often does VAS pay dividends?
+
VAS pays quarterly distributions, usually in March, June, September and December. Exact dates vary each quarter; you can find the schedule on the ASX VAS page or through Vanguard.
Is VAS better than A200?
+
Neither is clearly better. A200 has a lower fee (0.04% vs 0.07%) and tracks the top 200. VAS holds 100 more companies and carries the Vanguard brand. The long-run performance difference is tiny. If you already hold one, stick with it; starting fresh, either is excellent.
Can I hold VAS in my SMSF?
+
Yes. VAS is a standard ASX-listed ETF and can be held in an SMSF. In accumulation phase an SMSF is taxed at 15%, which makes VAS's franking credits especially valuable and often results in refunds of excess credits.
Does VAS pay fully franked dividends?
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VAS distributions are typically around 80% franked, not 100%. The exact franking percentage varies each quarter with the underlying companies' tax positions, and you'll see it on your distribution statement.
What is the minimum investment for VAS?
+
Effectively one unit, which has been trading around $100 to $115 recently (check the current price). Some brokers set their own minimum trade sizes, so confirm before ordering.
Is VAS safe?
+
VAS is a sharemarket investment, not a savings account, and it is not covered by the Financial Claims Scheme. Your balance will rise and fall with the ASX. Over long horizons the market has historically delivered positive returns, but nothing is guaranteed. Only invest money you won't need for at least 5 to 7 years.
Keep reading
📚 Recommended reading
The Barefoot Investor
Scott Pape
The Barefoot Investor
Scott Pape
Australia's best-selling money book ever. A simple system for accounts, budgeting, debt and a real emergency fund in one.
Girls That Invest
Simran Kaur
Girls That Invest
Simran Kaur
A no-jargon crash course from the podcaster behind Girls That Invest that makes the sharemarket feel doable, written especially for women starting out. The perfect first step before you buy your first ETF.
The Bogleheads' Guide to Investing
Taylor Larimore, Mel Lindauer & Michael LeBoeuf
The Bogleheads' Guide to Investing
Taylor Larimore, Mel Lindauer & Michael LeBoeuf
The friendly community bible of low-cost, buy-and-hold index investing, written by everyday investors rather than salespeople. The core philosophy is timeless for Aussies, just read the tax-advantaged account bits as super.
Some links above are affiliate links. If you buy through them, Snowball Invest may earn a small commission at no extra cost to you. We only recommend books we'd suggest anyway.
Sources
This article is general information only, not financial or tax advice. It does not take into account your circumstances. ETF holdings, fees, yields and franking levels change over time, and figures here are indicative as of mid-2026. Check Vanguard's current product disclosure statement, the ATO, or a licensed adviser before investing. Past performance is not a reliable indicator of future performance.
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General information only. This article is educational and does not constitute personal financial advice. It does not account for your circumstances. Consider your own situation and seek advice from a licensed adviser before acting. Read our full disclaimer.
Timothy Hirou Gaschereau
Founder of Snowball Invest, not a financial adviser.
I write about what I'm learning myself, because nobody ever taught us how to take control of our own money. It's a skill, not a mystery, and it's never too late to learn it. The best day to start was yesterday, the second best is today.
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