The three-ETF portfolio takes the widely held VAS + VGS two-fund core and adds a third fund for emerging-markets exposure, usually VGE (Vanguard FTSE Emerging Markets Shares ETF). Equally weighted, the three funds carry a blended management fee of approximately 0.24% per year.
General information only, not financial advice. Figures are approximate and as at Q2 2026. ETFLens does not hold an Australian Financial Services Licence (AFSL).
What each fund holds
VAS tracks the S&P/ASX 300, giving broad exposure to large and mid-sized Australian companies at 0.07% p.a.. VGS tracks developed markets outside Australia (the United States, Japan, the United Kingdom, Europe and more) at 0.18% p.a.. VGE adds the regions the first two funds leave out: emerging markets such as China, India, Taiwan, Brazil and South Africa, at 0.48% p.a..
Together the three funds split global share coverage into three slices: home (VAS), developed world (VGS) and emerging world (VGE). Because VGS deliberately excludes Australia and VGE covers only emerging markets, the three funds hold almost entirely different companies. VGS and VGE share approximately 0% of their holdings, as they track different market segments; you can confirm this for any pair with the free ETF overlap checker.
Why add VGE?
Emerging markets make up a meaningful share of global economic activity but only a small share of a developed-markets fund such as VGS. An investor who wants their portfolio's geographic mix to look more like the whole world, rather than developed economies alone, may add an emerging-markets fund to close that gap. The trade-off is that emerging markets have historically been more volatile than developed markets, and VGE's fee (0.48% p.a.) is higher than VAS or VGS. Past performance is not a reliable indicator of future returns.
How much to allocate to VGE is an individual decision. Some investors weight the three funds equally; others hold only a small emerging-markets slice. ETFLens does not assess what allocation suits any person.
Who this suits
The three-ETF portfolio is commonly used by investors who are comfortable managing three holdings rather than two and who want explicit emerging-markets exposure. An investor who prefers maximum simplicity may stay with the two-fund VAS + VGS core, while an investor who wants a growth tilt rather than emerging markets might consider a different third fund. Whether any approach is appropriate depends on your goals, time horizon and circumstances, which ETFLens cannot assess.
How much to hold in each
There is no single correct split. A common starting point weights the three funds roughly in line with each region's share of global share markets, which gives Australia a larger slice than its global weight (a "home bias" many Australian investors accept for franking and currency reasons) and emerging markets a smaller slice. Others simply hold the three equally for simplicity. VGE is the most widely held emerging-markets choice on the ASX, but it is not the only one; funds from other issuers track similar indices at different fees, which you can compare on the lowest-cost global shares ranking. Whatever the split, rebalancing back to your target weights from time to time keeps the portfolio from drifting as one region runs ahead of another. Past performance is not a reliable indicator of future returns.
Next steps
- VGS vs VGE: developed versus emerging markets, side by side.
- ETF overlap checker: confirm how little the three funds share.
- Lowest-cost global shares ETFs: alternatives to VGS and VGE ranked by fee.