The Vanguard Australian Shares High Yield ETF (ASX: VHY) is a popular choice for passive ASX investors seeking high passive dividend income on the share market.
This Vanguard exchange-traded fund (ETF) specialises in providing passive income to dividend-hungry investors. Instead of the hundreds of shares you'll find in broader index funds like the Vanguard Australian Shares Index ETF (ASX: VAS), the VHY fund currently invests in only 76 individual companies.
According to Vanguard, these are selected based on their perceived ability to fund generous, "higher forecast dividends relative to other ASX-listed companies".
As such, it's no surprise to see the Vanguard High Yield ETF's current top holdings dominated by the likes of BHP Group Ltd (ASX: BHP), the big four ASX banks, Wesfarmers Ltd (ASX: WES) and Woodside Energy Group Ltd (ASX: WDS).
But exactly how much passive income have dividend investors enjoyed from this ETF over the past three years? That's what we'll be looking at today.
Image source: The Motley Fool
How much passive income has the Vanguard VHY ETF yielded in three years?
Let's assume that a hypothetical investor had invested $3,000 into VHY units three years ago. Back in early September 2020, VHY units were asking around $51.50 each. At this unit price, a $3,000 investment would have secured roughly 58 VHY units, with a little change left over.
Now, this ETF pays out passive income in the form of dividend distributions every quarter. The payments that a Vanguard investor would have received since September 2020 are as follows:
| VHY distribution per unit | Payment date |
| $0.57 | 16 October 2020 |
| $0.43 | 19 January 2021 |
| $0.83 | 20 April 2021 |
| $0.33 | 16 July 2021 |
| $1.59 | 18 October 2021 |
| $0.48 | 19 January 2022 |
| $0.83 | 20 April 2022 |
| $1.25 | 18 July 2022 |
| $1.28 | 18 October 2022 |
| $0.79 | 18 January 2023 |
| $0.56 | 20 April 2023 |
| $0.77 | 18 July 2023 |
So since September 2020, VHY investors would have enjoyed a total of $9.71 in dividend distributions per share.
If our investor held their 58 units of this ETF over this entire period, they would have bagged a total of $562.97 in total passive dividend income. That represents a raw yield on cost of 18.77%, or roughly 6.26% per annum.
As such, it appears that the Vanguard Australian Shares High Yield ETF has lived up to its name and provided ASX investors with meaningful passive income, at least over the past three years.
The Vanguard Australian Shares High Yield ETF charges a management fee of 0.25% per annum. Over the three years to 31 July 2023, this ETF has averaged a total return (share price growth plus dividend distributions) of 15.66% per annum.
