VAS vs VGS: Australian vs Global Shares (2026)

VAS and VGS are the two most widely held ETFs on the ASX. VAS gives you exposure to Australia's largest listed companies. VGS gives you exposure to the world's largest companies outside Australia. This article compares them across fees, holdings, distributions, franking credits and how they work together in a portfolio. General information only, not financial advice.

At a glance

	VAS	VGS
Full name	Vanguard Australian Shares Index ETF	Vanguard MSCI Index International Shares ETF
Index tracked	S&P/ASX 300	MSCI World ex-Australia
Holdings	~316	~1,412
MER	0.07% p.a.	0.18% p.a.
Fund size (Q2 2026)	$50.7B	$40.9B
Distribution yield	~3.3%	~1.6%
Distributions	Quarterly	Quarterly
Franking credits	Yes (Australian companies)	No (international companies)
Currency hedged	N/A (AUD assets)	No (unhedged)
Listed on ASX	2009	2014

What each fund holds

VAS tracks the S&P/ASX 300 Index. That means it holds the 300 largest companies listed on the ASX, weighted by market capitalisation. The top holdings are dominated by the big banks and miners: Commonwealth Bank, BHP, Westpac, NAB and ANZ. Financials make up around a third of the fund.

VGS tracks the MSCI World ex-Australia Index. It holds approximately 1,412 companies across developed markets globally, but excludes Australia entirely. The US makes up about 72% of the fund, followed by Japan, the UK and Europe. The top holdings are the global tech giants: Nvidia, Apple, Alphabet, Microsoft and Amazon.

Because VAS holds only Australian companies and VGS holds only international companies, there is zero holdings overlap between them. They cover entirely different parts of the global market.

Management fee

VAS charges a management expense ratio of 0.07% per year. VGS charges 0.18% per year. VAS is cheaper because tracking a single country's index is simpler and less costly than tracking 1,412 companies across multiple countries, currencies and regulatory environments.

In dollar terms:

• On a $10,000 holding: VAS costs approximately $7 per year, VGS costs approximately $18 per year
• On a $100,000 holding: VAS costs approximately $70, VGS costs approximately $180
• On a $500,000 holding: VAS costs approximately $350, VGS costs approximately $900

Both fees are low by industry standards. Many actively managed funds charge 0.50% to 1.50% per year for comparable exposure. The ETFLens Fee Calculator can be used to model how different MERs compound over time.

Distributions and income

Both VAS and VGS distribute quarterly. VAS has the higher distribution yield of the two -- approximately 3.3% compared to approximately 1.6% for VGS. This is because Australian companies generally pay out a larger proportion of their earnings as dividends than global companies do.

For investors focused on regular income, VAS delivers roughly twice the yield of VGS. For investors focused on long-term growth, the lower yield from VGS reflects that global companies tend to retain and reinvest more of their earnings.

Past distributions are not a reliable indicator of future distributions. The exact amount and timing vary each period. Check the current product disclosure statement for the most recent distribution history.

Franking credits

VAS distributions may include franking credits because the underlying companies are Australian and pay Australian company tax. For Australian resident taxpayers, franking credits can reduce the tax payable on distributions or result in a tax refund. The franking rate varies each distribution period.

VGS distributions do not include franking credits because the underlying companies are based outside Australia and pay tax in their home countries. International companies may have withholding tax deducted before distributions reach the fund.

The after-tax return difference depends on the investor's marginal tax rate. At lower tax rates, franking credits have a larger proportional benefit. This is a general explanation only. Tax outcomes depend on individual circumstances and investors should consult a registered tax agent for advice specific to their situation.

Currency exposure

VAS holds Australian companies priced in Australian dollars. There is no foreign currency exposure.

VGS is unhedged, meaning it holds international companies in their local currencies (primarily US dollars, euros, yen and pounds) without converting back to AUD. When the Australian dollar falls against those currencies, VGS returns increase in AUD terms. When the Australian dollar rises, VGS returns decrease in AUD terms.

Over long periods, currency movements tend to average out, but they can create significant short-term volatility. Investors who want international exposure without currency risk may consider the hedged version, VGAD. Currency hedging adds a small cost and is not always beneficial. This is general information only.

Sector exposure

The sector makeup of VAS and VGS is almost entirely different:

• VAS is heavily concentrated in Financials (around 33.7%) and Materials (around 25.1%). These two sectors alone make up the bulk of the fund. Technology is a small allocation in the Australian market.
• VGS is led by Information Technology (around 25.3%), followed by Financials (around 10.8%) and Health Care (around 6.7%). It provides exposure to sectors that barely exist on the ASX, including global tech, pharma and consumer brands.

Holding both VAS and VGS together gives an investor broader sector diversification than either fund alone. The Australian market is concentrated in banks and miners. The global market is concentrated in technology and healthcare. Together they reduce single-sector risk.

Fund size and liquidity

VAS is the largest ETF on the ASX with approximately $50.7 billion in assets as of Q2 2026. VGS is the second largest with approximately $40.9 billion. Both are among the most heavily traded ETFs in Australia with tight bid-ask spreads.

For most retail transaction sizes, both funds can be bought or sold without meaningful market impact. Current spreads should be checked with a broker before transacting.

How investors use VAS and VGS together

A common approach among Australian investors is to hold both VAS and VGS. Because they have no holdings overlap, combining them provides exposure to both the Australian and global share markets through just two funds.

Some investors split equally (50/50). Others overweight VGS for greater global diversification, or overweight VAS for the higher yield and franking credits. There is no single correct allocation -- it depends on investment objectives, time horizon and personal circumstances.

Investors holding both may want to check their combined sector exposure. The ETFLens Portfolio Builder shows combined sector weightings and total fee cost in dollars for any combination of ETFs.

General information only. Not financial advice. This article does not consider your personal financial situation, objectives or needs. Past performance is not a reliable indicator of future performance. Distribution yields are approximate and vary each period. MER and fund size data reported from fund manager disclosures, reviewed quarterly. Always check the current PDS for the most recent fee, holdings and distribution information before investing. ETFLens does not hold an Australian Financial Services Licence. Consider seeking advice from a licensed financial adviser (AFS licence holder) before making any investment decisions.