Here's what $10,000 invested in the Vanguard Australian Shares Index ETF (VAS) at the start of 2023 is worth now

Could this be a good way to gain income through capital appreciation and dividends?

| More on:
A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.

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

Global share markets have been on a tear lately. Bloomberg reported last week that 14 of the world's largest stock markets were currently "at or near their peaks" — Australia included. In fact, the S&P/ASX 300 index (ASX: XKO) hit an all-time high in March and has climbed 10% since January last year.

The Vanguard Australian Shares Index ETF (ASX: VAS) tracks the performance of the 300 companies listed on the ASX 300. And Aussie investors have long been drawn to the VAS ETF as a low-fuss investment option for growing their wealth.

Winding back the clock, here's a look at how a $10,000 investment in the VAS ETF at the start of January 2023 has fared up until the close on Monday.

The ASX VAS ETF at a glance

The Vanguard Australian Shares Index ETF is an exchange-traded fund (ETF) launched in 2009. It provides exposure to the top 300 companies listed on the ASX, offering a combination of long-term capital growth potential and regular income through dividends.

When you buy this fund, you are backing the long-term outlook of Australia.

At the latest count, the VAS ETF has $14.7 billion in funds under management – more than the market capitalisation of some ASX large-cap companies.

And what does it cost to own a piece of Australia's largest 300 listed companies in one share? Well, the VAS ETF charges just 0.07% per annum on all funds invested. That's more attractive than the performance fee charged by some active managers.

$10,000 investment in VAS ETF in 2023

If you had invested $10,000 in the VAS ETF at the start of 2023, you would have purchased units at $85.80 each on 3rd January. This investment would have secured you approximately 117 units of the ETF.

Fast-forward to today. With VAS trading at $97.92 apiece, your initial investment would now be worth $11,452. That's a reasonable capital gain of about $1,450, or 14.5%, excluding dividends.

Created with Highcharts 11.4.3Vanguard Australian Shares Index ETF PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

What about dividend income?

But the story doesn't end with capital appreciation. VAS also provides regular income through dividends. Since January 2023, VAS has paid total dividends of $4.31 per share. Given the original unit price, this means you would have received a dividend yield of 5% to date when including all distributions paid.

This amounts to an additional $502.55 in dividend income for your 116.53 units. Combined with your capital gains, the total return on your $10,000 investment would be around $1,952.55, or 19.5%.

This return excludes the 74.97 cents per share dividend received on 8 January, as the ex-entitlement date fell on 3 January. Including this, total dividends are $5.07 per share.

Why consider the ASX VAS ETF?

VAS offers diversified exposure to the Australian market, featuring major players like BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), CSL Limited (ASX: CSL), and ANZ Group Holdings Ltd (ASX: ANZ), just naming a select few.

In my opinion, this diversification can help mitigate risk while providing access to the growth potential of these top Australian companies.

Plus, as you saw earlier, the dividend income adds another source of return to consider. Who doesn't like passive income?

Foolish takeaway

Investing in the ASX VAS ETF has proven rewarding over the past year, delivering both capital growth and steady income.

Whether you're a seasoned investor or just starting out, the fund offers a balanced way to participate in the Australian share market.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

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

5 excellent ASX ETFs to buy with $10,000

Let's see what these top funds offer Aussie investors.

Read more »

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

2 compelling ASX ETFs I'd buy for income and growth

I think both of these ASX ETFs have a lot to offer.

Read more »

A businessman holding a world globe in one hand, representing global investment.
ETFs

The best ASX ETFs to buy for international diversification in FY 2026

These funds offer exposure to many of the best stocks in the world.

Read more »

ETF written in yellow with a yellow underline and the full word spelt out in white underneath.
ETFs

Why these 3 ASX ETFs could be strong buys

Let's see why these funds could be among the best to buy right now.

Read more »

ETF with different images around it on top of a tablet.
ETFs

Best performing iShares ASX ETFs in the last year

These funds have brought strong returns in the last 12 months

Read more »

ETF spelt out with a rising green arrow.
ETFs

Top 6 ETFs holding ASX shares that produced the best returns in FY25

Of the 425 exchange-traded funds listed on the ASX and CBOE, these were the best performers of FY25.

Read more »

Exchange-traded fund spelt out with ETF in red and a person pointing their finger at it.
ETFs

The best ASX ETFs to buy and hold with $20,000

Let's see what sets these funds apart from the rest.

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
ETFs

3 top ASX ETFs that could be perfect for beginners

Let's see why these funds could be good picks if you're starting your investment journey.

Read more »