Spotlight: Vanguard Australian Shares High Yield ETF (ASX: VHY)
Over the past 18 months, we've been using our Spotlight series to shine a light on our ETF portfolios. We're now expanding the series to focus on the individual ETFs that help power those portfolios - or are available through InvestSMART Custom.
This time, we're focusing on the Vanguard Australian Shares High Yield ETF (ASX: VHY), which is part of our Custom offering. Here's what you need to know.
About the Vanguard Australian Shares High Yield ETF (ASX: VHY)
The Vanguard Australian Shares High Yield ETF (ASX: VHY) provides investors with exposure to a diversified portfolio of Australian companies that have higher forecast dividends relative to other ASX-listed companies.
Vanguard says the ETF suits investors seeking regular income and long-term capital growth, who are comfortable with share market volatility. The minimum suggested investment timeframe is seven years.
Here are a few quick facts about VHY:
- Investment manager: Vanguard
- Inception date: 23 May 2011
- Size: $5.76 billion
- Management fee: 0.25% p.a.
- Benchmark index: FTSE Australia High Dividend Yield Index
- InvestSMART rating: 5 stars
- Distribution frequency: Quarterly
Where is VHY invested?
The top 10 holdings, which make up 63.6% of the portfolio, are listed below.
Top 10 holdings
|
Company |
% of net assets |
|
BHP Group Ltd |
10.34% |
|
Commonwealth Bank of Australia |
8.82% |
|
Westpac Banking Corp |
7.14% |
|
National Australia Bank Ltd |
7.08% |
|
Telstra Group Ltd |
5.95% |
|
ANZ Group Holdings Ltd |
5.42% |
|
Woodside Energy Group Ltd |
5.31% |
|
Transurban Group |
4.80% |
|
Rio Tinto Ltd |
4.52% |
|
Macquarie Group Ltd |
4.17% |
Source: Vanguard. Holdings as of 31 August 2025.
From a sector perspective, as of 31 August 2025, VHY's holdings include Financials (39.5%), Basic Materials (20.7%), Energy (10.8%), Telecommunications (6.0%), Consumer Discretionary (5.7%) and Consumer Staples (5.2%).
How has VHY performed?
VHY has delivered strong long-term results, returning an average of 9.58% a year since it launched in May 2011. In the 12 months to the end of September 2025, it was up 12.50%.
The returns include both capital growth and distributions and VHY delivers a healthy income stream.
VHY performance
|
1 year |
3 years (p.a.) |
5 years (p.a.) |
10 years (p.a.) |
SI p.a.1 |
|
|
Total return |
12.50% |
16.08% |
16.08% |
9.86% |
9.58% |
|
Benchmark |
12.69% |
16.35% |
16.35% |
10.13% |
9.81% |
Source: Vanguard. Returns for the period ending 30 September 2025. 1Since inception on 23 May 2011.
Key takeouts
VHY offers investors exposure to high-dividend-paying Australian companies across sectors such as financials, resources, and telecommunications. It can be a useful option for those seeking regular income and access to franking credits, which can enhance after-tax returns. The ETF has a strong track record of delivering steady distributions, though its focus on income can mean less diversification than broad market ETFs like IOZ.
Want to compare ETFs? Check out our handy online ETF filter tool. It can help you narrow down your options based on filters such as investment category or InvestSMART's star rating.
InvestSMART also has a range of diversified portfolios that all come with a capped management fee. If you'd like help selecting the right style of portfolio for you check out our free statement of advice quiz. It will show you which InvestSMART ETF portfolio may best suit your goals and investment timeframe.
Frequently Asked Questions about this Article…
The Vanguard Australian Shares High Yield ETF (ASX: VHY) is an exchange-traded fund that gives investors exposure to a diversified portfolio of ASX-listed companies with higher forecast dividends. Managed by Vanguard, it’s aimed at investors seeking regular income and long-term capital growth who are comfortable with share market volatility. Vanguard’s minimum suggested investment timeframe for VHY is seven years.
As of 31 August 2025 the top 10 holdings make up 63.6% of VHY. The largest holdings are BHP Group (10.34%), Commonwealth Bank (8.82%), Westpac (7.14%), National Australia Bank (7.08%), Telstra (5.95%), ANZ (5.42%), Woodside Energy (5.31%), Transurban (4.80%), Rio Tinto (4.52%) and Macquarie Group (4.17%). (Source: Vanguard, holdings as at 31 Aug 2025.)
As of 31 August 2025 VHY’s sector exposure is tilted toward Financials (39.5%), Basic Materials (20.7%), Energy (10.8%), Telecommunications (6.0%), Consumer Discretionary (5.7%) and Consumer Staples (5.2%). This sector mix reflects VHY’s focus on higher-dividend-paying Australian companies.
VHY has delivered strong long-term returns since inception. For the period ending 30 September 2025, VHY’s total returns were 12.50% for the last year and an annualised 9.58% since inception (23 May 2011). Returns include both capital growth and distributions. Past performance is not a guarantee of future results, but these figures show VHY’s historical track record.
VHY pays distributions quarterly and is positioned to provide a healthy income stream. The ETF offers investors access to franking credits from Australian dividend payers, which can help enhance after-tax returns depending on your tax situation.
Key facts for VHY: investment manager Vanguard, inception date 23 May 2011, fund size about $5.76 billion, management fee 0.25% p.a., benchmark is the FTSE Australia High Dividend Yield Index, and InvestSMART gives it a 5-star rating. Distribution frequency is quarterly.
VHY can be a useful option for income-focused investors because it targets high-dividend Australian companies and delivers steady distributions and franking credits. However, its income focus means it can be less diversified than broad market ETFs (the article cites IOZ as an example of a broader alternative), and investors should be comfortable with share market volatility and consider the suggested minimum timeframe of seven years.
InvestSMART offers an online ETF filter tool to compare ETFs by category, InvestSMART star rating and other filters. If you want help selecting a portfolio, InvestSMART also provides a range of diversified ETF portfolios with capped management fees and a free statement-of-advice quiz to suggest which InvestSMART ETF portfolio may best suit your goals and timeframe.
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