Vanguard Diversified High Growth (VDHG) is an Exchange Traded Fund (ETF) that provides low fee access to a diversified group of asset classes.
VDHG aims to invest for growth and targets 90% of its allocation into growth assets and 10% of its allocation into income assets.
VDHG has become a popular investment choice for people who want a simple and low-cost investment and it’s gained a certain notoriety in the Financial Independence Retire Early community.
Many in the FIRE community have an investment strategy that is as simple as investing only in VDHG, regular, over a long period and getting on with their life.
The theory behind this approach is that VDHG does all the diversification for you.
What makes up VDHG
VDHG contains the following funds:
- Vanguard Australian Shares Index Fund (Wholesale) – 35.60%
- Vanguard International Shares Index Fund (Wholesale) – 26.70%
- Vanguard International Shares Index Fund (Hedged) – AUD Class (Wholesale) – 16.20%
- Vanguard Global Aggregate Bond Index Fund (Hedged) – 7.00%
- Vanguard International Small Companies Index Fund (Wholesale) – 6.50%
- Vanguard Emerging Markets Shares Index Fund (Wholesale) – 5.00%
- Vanguard Australian Fixed Interest Index Fund (Wholesale) – 3.00%
VDHG has a management fee of 0.27% per annum and dividends are distributed quarterly. You can purchase VDHG through your broker on the Australian Stock Exchange (ASX).
VDHG offers a simple and diversified approach to investing and is great if you don’t want to spend your time re-balancing your portfolio. You do lose a degree of control with the allocation of your funds as the investment is set.
The management fee of 0.27% is a slight premium to the other Vanguard products. For example, Vanguard Australian Shares (VAS) charges a 0.1% management fee.
You can find out more about VDHG from Vanguards website.
Disclaimer time: This article is for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions and consider speaking to a licensed financial advisor.