Guess what average annual return the ASX Vanguard Australian Shares Index ETF (VAS) has delivered over the past 3 years

The VAS ETF tracks the top 300 shares on the Australian share market.

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The Vanguard Australian Shares Index ETF (ASX: VAS) is one of the most popular shares on the market.

The exchange-traded fund (ETF) tracks the S&P/ASX 300 Index (ASX: XKO). This means it seeks to mirror the returns of the top 300 ASX shares on the market.

These include household names like BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC).

The ASX VAS stock is the largest ETF in Australia with more than $12 billion in assets under management. 

It’s a simple and easy way of generating steady passive income via dividends as well as capital growth.

Newly-released data from the ASX quantifies its performance for the year ended 30 June.

How did VAS perform over the past 3 years?

According to the data, the VAS ETF has returned an average of 12.32% per annum over the past three financial years.

That’s capital growth combined with reinvested dividends, which historically average 4.07%.

The ASX VAS fund has averaged 8.45% returns over five years, which of course takes into account most of the pandemic era.

Over the past 12 months, the total return has been 15.54%.

As stated earlier, the ASX VAS captures the performance of the top 300 shares.

But what if you limited your investment to an ETF that tracks only the S&P/ASX 200 Index (ASX: XJO), which is considered the benchmark index for measuring the market’s health?

Does tracking 300 companies give VAS an edge?

For the purposes of this exercise, let’s use the BetaShares Australia 200 ETF (ASX: A200) to compare with the ASX VAS.

To be clear, the BetaShares Australia 200 ETF tracks the performance of the top 200 shares on the market.

According to the data, the BetaShares Australia 200 ETF has returned an average of 12.91% per annum over the past three financial years.

The A200 has averaged 8.6% returns over five years and 16.74% over the past 12 months.

Historically, the A200 ETF has delivered a dividend of 4.1% per annum.

Should you buy ASX VAS shares?

Shares like the Vanguard Australian Shares ETF make investing pretty easy.

An extra benefit is that the ASX VAS ETF pays its dividends out four times per year.

Most ASX shares pay dividends only twice a year, so this can be handy for income investors‘ cash flow.

In terms of fees, the ASX VAS charges a tiny fund management fee of 0.07%.

The A200 charges an even tinier 0.04%, and also pays dividends quarterly.

Motley Fool contributor Bronwyn Allen has positions in BHP Group, CSL, Commonwealth Bank Of Australia, Vanguard Australian Shares Index ETF, and Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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