What's the forecast dividend yield for the Vanguard Australian Shares Index ETF (VAS)?

Will this Vanguard ETF bring home the dividend bacon in FY2024?

| More on:
A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Vanguard Australian Shares Index ETF (ASX: VAS) is a popular index fund on the ASX. Australian investors seem to love the exposure to the largest 300 ASX shares that this exchange-traded fund (ETF) offers.

But VAS units are also popular with dividend income investors.

As most ASX investors would know, the ASX is known for its hefty, fully-franked dividends. Most ASX blue-chip shares have a healthy history of providing substantial passive income to investors in the form of dividends. The ASX bank shares are famous for it, as are other names like BHP Group Ltd (ASX: BHP) and Telstra Group Ltd (ASX: TLS).

Because the Vanguard Australian Shares ETF holds all of those shares and more, it too has a high dividend income potential.

Unlike most ASX shares, the VAS ETF pays its dividends quarterly, rather than every six months.

Over the entirety of FY2023, the Vanguard Australian Shares ETF kept to this trend. The fund paid out $1.45 per unit for the quarter ending 30 September 2022, 74.98 cents per unit for the quarter ending 31 December, 57.7 cents per unit for the quarter ending 31 March 2023, and 88.9 cents per unit for the most recent quarter ended 30 June.

That's a total of $3.67 in dividend distributions per unit for FY2023.

So what will FY2024 hold for dividend income-minded Vanguard investors?

What kind of income will the ASX's VAS investors receive in FY2024?

Well, that's hard to answer. Because the VAS ETF holds 300 ASX shares within it, the dividend distributions it forks out are entirely dependent on the dividend income that all 300 of these shares will pay over the present financial year. That's a pretty hard metric to predict almost one year out.

That's why the income from this ETF appears so lumpy from year to year. For example, we had a total of $3.94 per unit in dividend distributions over FY2023. But FY2022 instead saw a total of $6.29 per unit. However, the year before that had a total of just $2.33.

But we can make some very rough predictions.

The VAS ETF may have 300 individual shares within it. But this ETF is also weighted by market capitalisation, meaning the largest ASX 300 shares command the most influence in this fund.

For example, the likes of BHP, Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ) together account for 28.9% of the weighted VAS portfolio at present.

So the dividends from these five shares alone will really make or break the income Vanguard Australian Shares ETF investors will bank over the coming 12 months.

Are higher dividends coming?

ASX bank investors, for one, should be looking forward to this financial year. As my Fool colleague Bronwyn covered earlier this month, a major ASX broker is predicting that most ASX bank shares will be raising their dividend payouts over FY2024.

For example, CBA shares are predicted to pay out a total of $4.35 in dividend income this financial year, up from $4.20 per share for FY2023.

If this indeed comes to pass, it bodes well for VAS's ASX dividends.

However, the outlook for BHP is a little less rosy. As my Fool colleague James discussed just this morning, one ASX broker reckons BHP might have trouble maintaining the $3.92 per share the miner doled out last financial year in FY2024.

This illustrates why it is so hard to make a prediction about the Vanguard Australian Shares ETF's future dividend potential today. But what ASX VAS investors can be sure of is this: whatever income the Australian share market spins off over FY2024, they will get a proportionate slice of it.

Should you invest $1,000 in Vanguard Australian Shares Index Etf right now?

Before you buy Vanguard Australian Shares Index Etf shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Vanguard Australian Shares Index Etf wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank, Telstra Group, and Vanguard Australian Shares Index ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

This appealing ASX ETF just hit a 52-week low, I think it's a buy

This fund has several compelling qualities.

Read more »

A man looking at his laptop and thinking.
ETFs

ASX ETF investors: Are you making this easy mistake?

It's easy to overlook this.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
ETFs

3 ASX ETFs to buy for passive income

Looking for income? Here are three ETFs to consider buying.

Read more »

a business person checks his mobile phone outside a Wall Street office with an American flag and other business people in the background.
ETFs

The pros and cons of buying the iShares S&P 500 ETF (IVV) this month

Is this the right time to invest in US shares?

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
ETFs

5 high-quality ASX ETFs to buy in March

These funds could be top picks for Aussie investors in March. Let's see why.

Read more »

A young well-dressed couple at a luxury resort celebrate successful life choices.
ETFs

Buy and hold these world class ASX ETFs for 5 years

Here's why it could pay to hold onto these funds for the next five years.

Read more »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

I think these 2 ASX ETFs are unmissable buys in this sell-off

These funds are now a lot cheaper.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
ETFs

Where to invest $10,000 into ASX ETFs

Let's take a look at three top picks for Aussie investors to consider buying.

Read more »