VDHG — the Vanguard Diversified High Growth ETF — is one of Australia’s most widely held all-in-one ETFs. It holds approximately 90% shares and 10% bonds across thousands of companies worldwide, designed to be held as a complete long-term portfolio in a single ASX trade. This review covers VDHG’s structure, costs, distributions, and how it compares to DHHF.
VDHG at a Glance (2026)
| Feature | Detail |
|---|---|
| ASX code | VDHG |
| Full name | Vanguard Diversified High Growth Index ETF |
| Allocation | ~90% shares, ~10% bonds |
| MER | 0.27% per year |
| Distribution frequency | Annually (June) |
| Inception date | November 2017 |
| Fund size | $6B+ (AUM) |
| Provider | Vanguard Australia |
Verify current details at vanguard.com.au.
What Does VDHG Hold?
VDHG is a fund of funds — it holds multiple Vanguard funds:
| Component | Allocation | Coverage |
|---|---|---|
| Australian shares | ~36% | VAS (S&P/ASX 300) |
| International shares (unhedged) | ~26% | VGS (MSCI World ex-Australia) |
| International shares (hedged) | ~15% | VGAD |
| Emerging markets | ~5% | VGE |
| Global small companies | ~4% | VISM |
| Australian fixed income | ~6% | VAF |
| International fixed income (hedged) | ~4% | VIF |
| Cash | ~4% | — |
Total exposure: approximately 14,000+ securities across 50+ countries.
Allocations are approximate targets. Check vanguard.com.au for current holdings.
The 90/10 Split — Shares and Bonds
VDHG’s ~10% defensive allocation (bonds and cash) distinguishes it from DHHF:
- Smoother volatility — the bond cushion reduces the magnitude of drawdowns in market crashes
- Lower expected long-term return — bonds historically underperform shares over long periods
- Built-in rebalancing — the fund automatically rebalances back to target weights
The 90/10 allocation is described by Vanguard as “high growth” — it suits investors with a long time horizon who want some defensive buffer but maximum growth exposure.
VDHG MER — 0.27%
VDHG’s 0.27% MER is the total cost, covering both the ETF and proportional underlying fund fees. On $100,000 invested, the annual fee is $270.
At 0.27%, VDHG is more expensive than DHHF (0.19%) — a difference of $80 per year on $100,000. The reason for the higher MER is primarily the broader range of underlying funds (7 vs 4) and the Vanguard brand premium.
VDHG Annual Distributions
VDHG distributes annually, typically in June. This differs from DHHF (half-yearly) and most Australian share ETFs (quarterly). Annual distributions mean you receive income once per year.
Distributions include dividends, interest income, and potentially capital gains from the underlying funds. VDHG’s annual distributions tend to be larger than many investors expect — particularly if the international share allocation has realised capital gains during rebalancing. This is sometimes called the “VDHG tax problem” — internal rebalancing can trigger larger capital gains distributions than a three-ETF portfolio approach, making it potentially less tax-efficient for high-income investors.
VDHG vs DHHF — Key Differences
| Feature | VDHG | DHHF |
|---|---|---|
| Provider | Vanguard | BetaShares |
| Shares | ~90% | 100% |
| Bonds/cash | ~10% | 0% |
| MER | 0.27% | 0.19% |
| Holdings | ~14,000 | ~8,000 |
| Distribution | Annually | Half-yearly |
| Inception | 2017 | 2020 |
| Track record | 7+ years | 4+ years |
See the dedicated VDHG vs DHHF article for a full comparison.
Related Articles
- DHHF ETF Review
- VDHG vs DHHF
- VDGR ETF Review
- Vanguard ETFs Australia
- Best ETF for Beginners Australia
- ETFs hub
Frequently Asked Questions
Is VDHG good for long-term investing? VDHG is commonly used as a long-term, low-maintenance investment — a complete diversified portfolio in one fund. Its combination of Australian shares, international shares, and a small bonds allocation across 14,000 securities provides broad diversification. However, its 0.27% MER, annual distribution frequency, and potentially higher capital gains distributions mean some investors prefer to construct their own portfolio using separate ETFs (e.g., VAS + VGS) at lower total cost and better tax efficiency.
Is VDHG actively managed? No. VDHG is an index fund — it passively tracks a set of benchmark indices through its underlying Vanguard funds. No active security selection is involved. The fund manager (Vanguard) rebalances the portfolio back to target weights periodically.
Can I hold VDHG and VAS at the same time? Yes — but VAS is already approximately 36% of VDHG. Holding both increases your Australian shares concentration beyond VDHG’s target 36%. This is a deliberate choice some investors make to increase their home bias, but it changes the risk/return profile of the overall portfolio.
This article provides general financial information only. ETF mentions are for educational context. Past performance is not a reliable indicator of future performance. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.