General information only. Not financial advice. Always read the relevant PDS and consider speaking with a licensed financial adviser before making investment decisions.
Every week on Australian investing forums someone asks the same question: VDHG or DHHF? Both are diversified all-in-one ETFs that give you exposure to thousands of companies around the world in a single trade. But they are built differently, priced differently, and behave differently. This article breaks down what actually separates them.
What is VDHG?
VDHG is the Vanguard Diversified High Growth ETF. It holds a mix of Vanguard funds covering Australian shares, international developed markets (hedged and unhedged), emerging markets, and a 10% allocation to bonds. The annual management fee is 0.27%, which works out to $27 per year on a $10,000 investment. VDHG launched in 2017 and has around $3.7 billion in assets.
What is DHHF?
DHHF is the Betashares Diversified All Growth ETF. It holds four underlying ETFs covering Australian shares, US shares, international developed markets and emerging markets. There are no bonds. The underlying funds are A200, VTI, SPDW and VWO. The annual management fee is 0.19%, which works out to $19 per year on a $10,000 investment. DHHF launched in December 2019.
What is the key difference?
The most important structural difference is that VDHG holds 10% in bonds and DHHF holds 0%. Everything else flows from that. VDHG is technically a 90/10 growth-to-defensive portfolio. DHHF is 100% growth assets.
In practice this means DHHF will fall harder during market downturns and recover faster during rallies. VDHG's 10% bond allocation provides a small buffer during sharp falls but has historically cost returns over longer periods. In the 2022 downturn, when both stocks and bonds fell simultaneously, VDHG's bond allocation provided almost no protection.
The fee difference
On a $10,000 investment, here is what each fund costs per year:
That is an $8 annual difference on $10,000. Over longer timeframes the gap compounds. The ETFLens fee calculator lets you put in your own investment amount and see the exact dollar difference over 10, 20 and 30 years.
What about the VDHG tax drag issue?
For several years VDHG had a well-known tax efficiency issue. Because it held managed funds rather than ETFs as underlying investments, it was required to distribute capital gains each year — even if you had not sold any units. This could create unexpected tax bills for investors in higher tax brackets. DHHF did not have this problem because it holds ETFs directly.
In 2024 Vanguard restructured VDHG to hold ETFs rather than managed funds, which resolved the main source of the tax drag. The practical impact of this change is still playing out and investors should check the current Vanguard PDS and consider their own tax situation before drawing conclusions. A registered tax agent can help assess the implications for your specific circumstances.
How much do they overlap?
Both funds invest in Australian and international shares with similar geographic weightings. ETFLens calculates significant overlap between VDHG and DHHF because both hold broad exposure to the same global markets — Australian large caps, US shares, and international developed markets. The main differences are VDHG's bond allocation and the slightly different weighting methodology between the two funds. You can see the full holdings comparison on the ETFLens compare page.
See the full side by side breakdown — holdings, sector exposure, fee difference in real dollars.
Check VDHG vs DHHF on ETFLens →Investors considering making changes to an existing position may want to factor in capital gains tax before making any decisions. A registered tax agent can help assess the tax implications of your specific situation.
General information only. Not financial advice. Past performance is not indicative of future performance. Holdings data verified quarterly. Always read the relevant PDS and consider seeking advice from a licensed financial adviser before making investment decisions.