What's the dividend yield of the Vanguard Diversified High Growth Index ETF (VDHG) in 2023?

This could be an excellent option for diversification.

| 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 Diversified High Growth Index ETF (ASX: VDHG) is one of the most diversified exchange-traded funds (ETF) on the ASX. In this article, I'm going to look at whether it's a potential option for passive income and what the dividend yield is.

For investors that haven't heard of this ETF, it's a fund of funds. Meaning, the VDHG's investments are other funds that, within those funds, own shares and bonds.

What funds is the Vanguard Diversified High Growth Index ETF invested in?

It's invested in seven different funds. I'll also mention how much of the VDHG ETF is invested in each fund at the end of June 2023.

Vanguard Australian Shares Index Fund (wholesale) – 35.5%

Vanguard International Shares Index Fund (wholesale) – 26.6%

Vanguard Shares Index Fund (hedged), Australian dollar class – 16.5%

Vanguard International Small Companies Index Fund (wholesale) – 6.5%

Vanguard Emerging Markets Shares Index Fund (wholesale) – 4.9%

Vanguard Global Aggregate Bond Index Fund (hedged) – 7%

Vanguard Australian Fixed Interest Index Fund (wholesale) – 3%

In total, 90% of it is invested in shares, while 10% is invested in bonds. The shares are described as growth assets, while the bonds were called income assets.

What is the dividend yield of the VDHG ETF?

The performance of an ETF is entirely decided by the underlying investments, so Vanguard Diversified High Growth Index ETF's performance reflects the performance of the funds, and those funds' performance is decided by the underlying shares' performance.

It's a similar thing for the dividends – the ETF just acts as a conduit to take the dividend from the shares to the ETF investors.

ETFs also pay any crystalised capital gains to investors, so the ETF distribution can be a combination of dividends (plus interest from bonds) and capital gains paid out.

The total return of the ASX ETF since it started in November 2017 has been an average per annum of 7.5%, with 5.17% of that being distributed to investors. I'm not sure how likely a dividend yield of more than 5% is going forward. In the last 12 months, the distribution yield amounted to 3.3%.

Is it a good option for passive income?

The VDHG may not be the best investment on the ASX for dividends, but it has a good enough yield to be attractive, particularly because it comes with strong diversification as well as bonds, ASX shares and international shares.

Should you invest $1,000 in Accent Group Limited right now?

Before you buy Accent Group Limited 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 Accent Group Limited 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 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 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.

More on ETFs

A young man punches the air in delight as he reacts to great news on his mobile phone.
ETFs

5 excellent ASX ETFs to buy now

Here are five funds that could be top picks for Aussie investors this month.

Read more »

Business people discussing project on digital tablet.
ETFs

Should you invest $3,000 into these top ASX ETFs this month?

Is now a good time to buy these funds? Let's find out.

Read more »

ETF spelt out with a piggybank.
ETFs

Is it too late to buy the VTS ETF and MOAT ETF after the rebound?

Was the best time to buy these ETFs last month?

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
ETFs

AI, cybersecurity, and defence: 3 megatrend ASX ETFs to watch now

Want to invest in some of the most exciting megatrends? Check out these funds.

Read more »

A business woman flexes her muscles overlooking a city scape below.
ETFs

3 ASX ETFs that could be strong buys in May

Looking for some investment ideas? Here are three to consider in May.

Read more »

Army man and woman on digital devices.
ETFs

3 reasons why Vaneck Global Defence ETF could beat the ASX 200 over the next year

Let's take a look at why this fund could be a top pick for investors.

Read more »

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

5 ASX ETFs to buy and hold until 2035

Check out these funds if you are looking to make buy and hold investments.

Read more »

Excited couple celebrating success while looking at smartphone.
ETFs

3 strong ASX ETFs to buy in May

These funds could be top picks for Aussie investors next month. Let's see why.

Read more »