VDHG vs DHHF is the most debated diversified ETF comparison in Australia. Both are all-in-one funds providing global diversification in a single ASX trade — but they differ on bonds, cost, distributions, and tax efficiency. This article covers every meaningful difference so you can make an informed decision.
VDHG vs DHHF — Side-by-Side Comparison
| Feature | VDHG | DHHF |
|---|---|---|
| Provider | Vanguard | BetaShares |
| ASX code | VDHG | DHHF |
| Shares allocation | ~90% | 100% |
| Bonds/cash allocation | ~10% | 0% |
| MER | 0.27% | 0.19% |
| Annual cost on $100,000 | $270 | $190 |
| Annual cost on $500,000 | $1,350 | $950 |
| Holdings | ~14,000 | ~8,000 |
| Distribution frequency | Annually | Half-yearly |
| Inception | 2017 | 2020 |
| AUM | $6B+ | $2B+ |
| Underlying fund structure | Vanguard index funds | 4 BetaShares ETFs |
The Bonds Question
This is the most important structural difference:
VDHG (~90% shares, ~10% bonds):
- Bonds provide a defensive cushion — the fund falls less in share market crashes
- Lower long-term expected returns (bonds historically underperform shares)
- Automatic rebalancing — the fund buys shares (relatively cheaper) during crashes
- Suits investors who want modest volatility reduction built in
DHHF (100% shares):
- No defensive buffer — it falls further than VDHG in sharp market downturns
- Higher long-term expected returns (100% exposure to growth assets)
- No internal bond/share rebalancing needed
- Suits investors with long time horizons and high tolerance for short-term losses
Example: March 2020 COVID crash (ASX fell ~35%):
- DHHF-style portfolio (100% shares) would have fallen approximately 30–35%
- VDHG-style (90/10) would have fallen approximately 27–31%
- The difference is real but not enormous — the bonds did provide some cushion
Fee Difference
The 0.08% MER difference between VDHG (0.27%) and DHHF (0.19%) amounts to:
| Portfolio | Annual saving with DHHF |
|---|---|
| $50,000 | $40 |
| $100,000 | $80 |
| $250,000 | $200 |
| $500,000 | $400 |
Compounded over 30 years on a growing portfolio, this difference becomes significant. However, the bonds allocation difference will likely have a larger impact on long-term returns than the MER difference.
Tax Efficiency — An Important Consideration
VDHG’s tax concern: VDHG distributes annually and can pass through significant capital gains distributions when its underlying Vanguard funds rebalance (selling and buying assets to maintain target weights). Investors in high tax brackets may prefer to manage their own rebalancing — which is one reason why some experienced investors choose a do-it-yourself 2–3 ETF portfolio (VAS + VGS) instead.
DHHF’s tax position: DHHF’s fund of funds structure using ETFs (not unlisted funds like VDHG’s underlying assets) may create different rebalancing mechanics. Some investors argue DHHF is more tax-efficient in practice than VDHG, though both are structurally similar as fund-of-fund approaches.
Both vs a 3-ETF portfolio: Many experienced investors argue that a simple 3-ETF portfolio (e.g., VAS + VGS + VAF) gives similar diversification with lower total MER, greater tax control, and more flexibility — at the cost of needing to manually rebalance periodically.
Performance Comparison
Both funds were significantly shaped by COVID and the subsequent tech rally. DHHF’s 100% shares allocation outperformed VDHG during strong bull market periods; VDHG’s bonds cushioned some downturns.
Since both have different asset allocations, direct performance comparison is not like-for-like. Over very long periods, 100% shares portfolios (DHHF’s approach) have historically outperformed 90/10 portfolios (VDHG’s approach) — but with higher volatility.
Past performance is not a reliable indicator of future performance.
Which Should You Choose?
| Situation | Consider |
|---|---|
| Long time horizon (10+ years), comfortable with volatility | DHHF (100% shares, lower cost) |
| Slightly shorter horizon or want built-in defensive buffer | VDHG (90/10, Vanguard brand) |
| Cost-sensitive, high income bracket | DHHF (lower MER) |
| Prefer Vanguard | VDHG |
| Want 14,000+ underlying securities | VDHG (broader coverage) |
| Very long horizon, maximum growth focus | DHHF |
| Just want to “set and forget” | Either — both require minimal ongoing management |
Related Articles
- VDHG ETF Review
- DHHF ETF Review
- Best ETF for Beginners Australia
- Diversified ETFs Australia
- ETF Portfolio Australia
- ETFs hub
Frequently Asked Questions
Can I switch from VDHG to DHHF? You can sell VDHG and buy DHHF, but selling VDHG triggers a CGT event on any accumulated capital gain. For investors with significant unrealised gains, the CGT cost may outweigh the benefit of switching. Many investors simply stop adding to the original fund and invest future contributions into the new fund.
Is there a DHHF equivalent with bonds? Not exactly. BetaShares offers DZZF (BetaShares Diversified Growth) with a 70/30 shares/bonds allocation, but DHHF’s 100% shares approach has no direct BetaShares equivalent with bonds. If you want Vanguard diversified funds with different risk levels, consider VDGR (70/30), VDBA (50/50), or VDCO (30/70).
Can I hold VDHG or DHHF in a super fund? Yes, if your super fund allows ETF investing (e.g., SMSF or some retail super platforms). VDHG and DHHF are ASX-listed ETFs and can be held in any investment account that allows ASX shares — including SMSFs.
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.