Best Vanguard ETFs Australia 2026: Fees & Returns Compared

Quick answer: For a single-fund portfolio, VDHG (0.27%) or the newer all-shares VDAL (0.27%). For a two-fund portfolio, VAS (0.07%) for Australian shares plus VGS (0.18%) for global shares. If you want the cheapest US exposure without US tax paperwork, Vanguard's Australian-domiciled V500 (0.07%) launched in March 2026. VHY (0.25%) suits income investors who accept a narrower portfolio.

Vanguard lists 36 ETFs on the ASX, but most long-term investors only need two or three of them. Which ones depends on whether you want one fund or several, how much you care about dividends, and whether you're comfortable holding a US-domiciled fund. All fees and fund sizes below come from Vanguard's ETFs at a glance (June quarter 2026). Returns come from Vanguard's ETF performance summary, to 31 August 2026, after management fees.

The best Vanguard ETFs at a glance

ETF	What it holds	Management fee	ETF size	5-yr return p.a.	10-yr return p.a.
VAS	~300 largest ASX companies	0.07%	$25.4b	7.56%	9.27%
VGS	~1,250 developed-market companies outside Australia	0.18%	$16.9b	11.76%	13.70%
VDHG	90% shares / 10% bonds, 7 Vanguard funds	0.27%	$4.0b	8.44%	n/a (2017 launch)
VDAL	100% shares, all-in-one	0.27%	$0.4b	n/a (2025 launch)	n/a
VHY	~90 high-dividend ASX companies	0.25%	$7.7b	11.70%	10.49%
VTS	Entire US share market (US-domiciled)	0.03%	$7.0b	12.14%	15.35%
VEU	All-world ex-US shares (US-domiciled)	0.04%	$6.2b	9.90%	10.32%
V500	S&P 500, Australian-domiciled	0.07%	$0.1b	n/a (2026 launch)	n/a

Vanguard ETF management fees

VTS0.03% p.a.

VEU0.04% p.a.

VAS0.07% p.a.

V5000.07% p.a.

VGS0.18% p.a.

VHY0.25% p.a.

VDHG0.27% p.a.

VDAL0.27% p.a.

Past returns mostly reflect what each market did, not fund quality. VGS and VTS beat VAS over 10 years because US technology stocks drove global markets, not because Vanguard managed them better. Don't pick a fund because it topped the last decade.

Best all-in-one Vanguard ETF: VDHG or VDAL

If you want one fund and never to rebalance, Vanguard has two high-growth options at the same 0.27% fee:

VDHG holds about 90% shares and 10% bonds, spread across Australian, international, hedged international, emerging market and small company funds. It returned 8.44% a year over five years after fees.
VDAL, launched in March 2025, drops the bonds and holds 100% shares. That's about 40% Australian, 30% international, 18% hedged international, plus emerging markets and small companies. It returned 10.69% in its first full year, compared with 9.63% for VDHG over the same period.

The choice is about behaviour, not maths. VDAL should grow faster over decades, but it will fall harder in a crash. If a 35% drop would tempt you to sell, VDHG's 10% bond buffer is worth the expected cost. For a comparison with BetaShares' all-shares rival, read DHHF vs VDHG.

Best Vanguard ETFs for a two- or three-fund portfolio

Building your own mix costs less than an all-in-one fund, but you have to rebalance it yourself.

VAS + VGS (the classic two-fund mix). A 40/60 split costs about 0.14% a year, against 0.27% for VDHG. On a $100,000 portfolio that's roughly $130 a year saved. VAS gives you franking credits; VGS gives you the global diversification the ASX lacks. See VAS vs VGS for how to choose the split.
VAS + VTS + VEU (the lowest-fee mix). Replacing VGS with VTS (0.03%) and VEU (0.04%) cuts the international fee to under 0.05%. It also adds emerging markets, which VGS excludes. The catch: VTS and VEU are US-domiciled, so you lodge a W-8BEN form and face potential US estate tax exposure on large holdings. Read IVV vs VGS vs VTS first.
Add V500 for Australian-domiciled US exposure. V500 tracks the S&P 500 for 0.07% without the US-domicile paperwork of VTS. A hedged version, V5AH, costs 0.09%. Both started trading on 4 March 2026, so they have no meaningful track record yet, and V500's $144 million size is small next to VTS.

Use our ETF Calculator to see how much a 0.13% fee difference compounds to over 20 or 30 years on your own contributions.

Best Vanguard ETF for income: VHY

VHY holds about 92 ASX companies with above-average dividend yields, weighted heavily to banks and miners. Commonwealth Bank alone was 10% of the fund at June 2026. It returned 11.70% a year over five years after fees, well ahead of VAS's 7.56%. But that reflects a strong period for banks and miners, and the fund is far less diversified.

VHY suits retirees and SMSFs who value franked income and can use the franking credits. For accumulators, VAS is usually the better core holding. You can add VHY on top if you want a higher income stream.

Buying Vanguard ETFs cheaply

Vanguard ETFs trade on the ASX, so you can buy them through any broker. Buying through Vanguard Personal Investor costs $0 brokerage on Vanguard ETF purchases and $9 per trade when you sell, with no account fee on Vanguard ETFs and managed funds (Vanguard Personal Investor Guide). If you also want BetaShares or iShares funds in the same account, a flat-fee broker may suit better — see Pearler vs Vanguard Personal Investor. If you're investing for a child, read Vanguard Kids vs Pearler vs investment bonds.

Frequently asked questions

What is the best Vanguard ETF for beginners in Australia?

VDHG is the simplest choice: one fund holding about 90% shares and 10% bonds across Australia and global markets, rebalanced automatically, for a 0.27% management fee. If you're comfortable with 100% shares, VDAL does the same job at the same fee without the bonds.

What is the cheapest Vanguard ETF in Australia?

VTS at 0.03% a year, followed by VEU at 0.04%. Both are US-domiciled and need a W-8BEN form. The cheapest Australian-domiciled Vanguard share ETFs are VAS and V500, both at 0.07%.

Is VDHG or VDAL better?

Both cost 0.27%. VDAL is 100% shares, so it should grow faster over the long run but fall harder in downturns. VDHG keeps 10% in bonds to soften falls. VDAL returned 10.69% in the year to August 2026 against 9.63% for VDHG.

Is VAS or VGS the better Vanguard ETF?

Most investors hold both. VAS (0.07%) gives you Australian shares and franking credits; VGS (0.18%) gives you about 1,250 global companies. Over 10 years to August 2026, VGS returned 13.70% a year against 9.27% for VAS, driven by US technology stocks.

What is Vanguard V500?

V500 is Vanguard's Australian-domiciled S&P 500 ETF, launched on the ASX on 4 March 2026 with a 0.07% management fee. Unlike the US-domiciled VTS, it doesn't require a W-8BEN form. A currency-hedged version, V5AH, costs 0.09%.

Do Vanguard ETFs pay dividends?

Yes. Most Vanguard share ETFs, including VAS, VGS, VDHG, VDAL and VHY, pay distributions quarterly. VGAD and V5AH pay semi-annually. Most offer a distribution reinvestment plan.

Related calculators and guides

ETF Calculator — project long-term growth and the cost of fees
Capital Gains Tax Calculator — estimate tax when you sell or rebalance
Vanguard vs BetaShares Australia
ETF and broker comparisons hub

Fees and fund sizes from Vanguard's ETFs at a glance, June quarter 2026; returns from Vanguard's ETF performance summary to 31 August 2026. Past performance is not an indication of future performance.

This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.