Image source: Getty Images
Vanguard Ethically Conscious Australian Equity ETF (ASX: VETH) is a diversified exchange-traded fund (ETF) that uses an ethics screen on the top 300 stocks listed on ASX.
While the ETF underperformed the S & P / ASX 300 Index (ASX: XKO) over the past year it still managed to deliver 15.3% before dividends.
So, let’s grab an understanding of what exactly this ETF is.
Investing in ASX stocks without the baggage
ETFs are a popular way for investors to gain exposure to a specific sector, index or theme in a single trade. Ethical investing is an increasingly popular topic.
There are many options available when it comes to ethical investing ETF providers, however, today we are reviewing Vanguard’s Ethically Conscious Australian Shares ETF.
This considers the top 300 companies listed on the ASX with an additional filter. Specifically, the fund excludes companies with significant business activities involving fossil fuels, nuclear power, alcohol, tobacco, gambling, weapons, adult entertainment, and driving related screen. based on serious controversies.
As a result, the fund owns 238 ASX-listed companies with a median market capitalization of $ 35.9 billion. According to the fund, the ETF’s price / earnings (P / E) ratio was 20.5 times as of May 31, 2021.
Passive income investors would also be happy to know that VETH ASX currently has a 2.6% dividend yield.
What are the companies of VETH ASX?
For most investors, you want to know exactly what your hard earned money is used for in the financial product. For that reason, here are the top 10 holdings of the Vanguard Ethically Conscious Australian Shares ETF:
- Commonwealth of Australia Bank (ASX: ABC)
- CSL Limited (ASX: CSL)
- Westpac banking company (ASX: WBC)
- National Australia Bank Ltd (ASX: NAB)
- Australia and New Zealand Banking Grp Ltd (ASX: ANZ)
- Wesfarmers Ltd (ASX: WES)
- Fortescue Metal Group Ltd. (ASX: FMG)
- Macquarie Group Ltd. (ASX: MQG)
- Telstra Corp Ltd (ASX: TLS)
- Transurban Group (ASX: TCL)
These top 10 holdings represent 48.9% of the ETF’s total. But how does VETH’s top 10 differ from the unfiltered ASX 300? Well the notable exclusions include BHP Group Ltd. (ASX: BHP) and Woolworths Group Ltd. (ASX: WOW).
However, the latter could be considered now that Woolies has separated from his alcohol business, Endeavor Group Ltd. (ASX: EDV)
Finally, one of the most important considerations for an ETF… costs. Investors can expect 0.16% per annum management fees in addition to 0.01% of indirect costs.
At the time of writing this article, ASX-listed VETH is trading at $ 58.93 per unit.