The Vanguard US Total Market Shares Index ETF (ASX: VTS) delivered its highest returns to Australian investors in more than a decade last year.
According to Vanguard, investors enjoyed a 36.42% gross return (including dividends) from the Vanguard US Total Market Shares Index ETF over the 12 months.
The total return by net asset value (NAV) was 36.38%, comprised of 34.57% capital growth and 1.81% distributions (or dividends). This is the strongest result since 2013.
The ASX VTS exchange-traded fund (ETF) outperformed Australia's most popular ETF, the Vanguard Australian Shares Index ETF (ASX: VAS), which tracks the S&P/ASX 300 Index (ASX: XKO), by more than 3:1. The ASX VAS delivered a total gross return of 11.4%, excluding franking credits, last year.
The VTS ETF provides exposure to more than 3,700 United States stocks, including the Magnificent Seven.
It seeks to track the performance of the CRSP US Total Market Index (NASDAQ: CRSPTM1) before fees. (ASX VTS investors pay a management expense ratio (MER) fee of 0.03%).
Vanguard says Australian investors ploughed more money into international ETFs, and particularly US-based ETFs, last year as it became clear that US stocks were growing faster than ASX shares.
In the September quarter, Australians invested $7.7 billion in ASX ETFs holding international shares, bringing the year-to-date total inflows to more than $13 billion, according to Vanguard data.
By comparison, people invested $2.09 billion in ASX ETFs holding Australian shares in the September quarter, bringing the year-to-date total inflows to $5.04 billion.
If you'd invested $10,000 in ASX VTS a year ago…
The closing value of the Vanguard US Total Market Shares Index ETF on the last day of trading for 2023 was $348.80 per unit.
During 2024, the ASX ETF reached a 52-week high of $494.70 per unit on 30 December.
It closed out the calendar year at $468.59 per unit.
If you invested $10,000 into the ASX VTS at the start of 2024 for $348.80 per unit, you would have received 28 units for $9,766.40.
At the end of the year, those units were worth $468.59 apiece.
That turned your initial $9,766.40 investment into $13,120.52.
What about dividend income?
In 2024, the Vanguard US Total Market Shares Index ETF paid out four distributions:
- On 24 January, it paid $1.5212 per unit
- On 24 April, it paid $1.4079 per unit
- On 26 July, it paid $1.4148 per unit
- On 24 October, it paid $1.2913 per unit
All up, ASX VTS investors received $5.6352 per unit in distributions during 2024.
If you held 28 units, then you received $157.79 in dividend income last year.
