VAF AU
Vanguard Australian Fixed Interest INDEX ETF Guide (VAF) and Details
Price data last refreshed:
The VAF ETF, the Vanguard Australian Fixed Interest Index ETF, gives investors exposure to investment-grade Australian bonds, including Commonwealth Government bonds, semi-government debt and investment-grade corporate issuers. The key question is not just what the fund holds, but where it fits in a portfolio: defensive ballast, income support, or a lower-volatility alternative to shares.
What it does: Tracks a broad portfolio of investment-grade Australian bonds via the Bloomberg AusBond Composite 0+ Yr Index.
Who it may suit: Australian investors looking for a core defensive bond allocation rather than cash or credit-heavy yield chasing.
Main local issue for Australians: The key decision is less about access and more about choosing between broad composite bonds, government bonds, credit-heavy bonds, or cash ETFs.
Best Australian-listed alternative: IAF for a close like-for-like core bond exposure; VGB for a more government-bond-heavy defensive option.
Here are the basics you should know before considering this ETF:
- Where it is listed: ASX
- Fund domicile: Australia
- Whether there is an ASX equivalent: IAF is the closest like-for-like alternative; VGB is the cleaner government-bond alternative; AAA is the cash alternative
- Whether the exposure is hedged or unhedged to AUD: AUD exposure; no major foreign-currency issue in normal use
Unlike many offshore ETFs, VAF is already a local product. That means the usual Australian investor concerns are straightforward: local market access, local disclosure documents and local tax reporting.
The more important decision is whether you want composite bonds like VAF, government bonds like VGB, credit-heavy bonds like VACF or IAF-style broad bond exposure, or a cash ETF like AAA.
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VAF ETF at a glance
VAF is a bond ETF, so the key return drivers are coupon income, yield levels, duration and bond price movements as interest rates change. It is not designed to deliver equity-like growth.
Overview
Vanguard Australian Fixed Interest INDEX ETF (ASX: VAF) provides Australian fixed-interest exposure through a portfolio whose supplied top holdings include Commonwealth government bonds. The fund’s reported return history has differed across time horizons, while its displayed dividend yield is 3.096% and distributions are listed as quarterly.
Category
Australian fixed-interest ETFs provide exposure to bonds, which can contribute income and diversify a portfolio’s sources of return. Their value is not fixed: market rates, inflation expectations and bond-market conditions can affect both prices and distributions.
Fixed-interest returns reflect both income from bonds and changes in their market prices. Interest-rate movements, inflation expectations and credit conditions can therefore shape outcomes, and the return history shows that performance has varied across periods: the supplied figures are 0.585% year to date, -0.431% over one year, 3.688% over three years, -0.082% over five years and 1.422% over ten years.
Key facts
- Ticker
- VAF
- Exchange
- AU
- ISIN
- AU000000VAF8
- Provider
- Vanguard Investments Australia Ltd
- Domicile
- Australia
- Currency
- AUD
- Inception date
- 2012-10-29
- Use of income
- Quarterly
- UCITS
- No
- Holdings count
- 8
Costs
- TER
- 0.00%
- Ongoing charge
- 0.00%
- Net expense ratio
- 0.00%
- AUM
- 9.9B
The supplied data displays a 0% total expense ratio, 0% ongoing charge and 0% net expense ratio. These are the fund-cost figures provided; they do not describe every potential cost of buying or selling ETF units.
Performance
- YTD
- 0.6%
- 1 year
- -0.4%
- 3 years
- 3.7%
- 5 years
- -0.1%
- 10 years
- 1.4%
- Dividend yield
- 3.10%
- Top 10 concentration
- 22.3%
Holdings
-
Australia (Commonwealth of) 4.25%3.36%
-
Australia (Commonwealth of) 2.5%2.98%
-
Australia (Commonwealth of) 3.25%2.87%
-
Australia (Commonwealth of) 5.5%2.66%
-
Australia (Commonwealth of) 1%2.75%
-
Australia (Commonwealth of) 2.75%2.61%
-
Australia (Commonwealth of) 4.75%2.61%
-
Australia (Commonwealth of) 0.25%2.51%
Weights are percentages of the fund; bars use a 0–100% scale. Displayed entries may not cover the whole portfolio.
The supplied top holdings display lists eight Australian Commonwealth bonds with different coupon rates. The largest listed position is the 4.25% bond at 3.357% of assets, followed by the 2.5% bond at 2.978% and the 3.25% bond at 2.872%. The range of individual positions means no listed bond dominates the displayed holdings.
Risks
Who it may suit
VAF may interest investors researching Australian fixed-interest exposure and government bonds as part of a broader portfolio. Bond values and distributions can fluctuate, so the fund’s reported yield should not be treated as assured income.
Key risks
Bond prices generally respond to changes in market interest rates, while inflation can erode the purchasing power of income. Credit quality and market conditions may also affect bond values. Distributions and yields can change, and past returns do not establish future results.
FAQ
How often does VAF distribute income?
The supplied fund data lists quarterly distributions. Its displayed dividend yield is 3.096%; yield can change and does not guarantee future income.
What does VAF hold?
The supplied top holdings are Australian Commonwealth government bonds with different coupon rates. The largest listed position, a 4.25% Commonwealth bond, has a displayed weight of 3.357%.
What are the main risks of Australian fixed-interest exposure?
Bond prices can fall when market interest rates rise, and inflation can reduce the purchasing power of income. Credit conditions and changes in bond-market pricing can also affect returns.
*This content is aimed to provide general information only, and does not take your personal objectives, financial situation or needs into account.
