VHY ETF Review: Dividend Yield, Holdings and Fees (2026)

VHY is the Vanguard Australian Shares High Yield ETF and the most-held dividend-focused ETF on the ASX. It targets companies with higher forecast dividend yields than the broad market, packaged in a single, low-cost trade. The trailing distribution yield is approximately 4.1% as at Q2 2026, materially higher than the broad Australian market via VAS at approximately 3.3%. Whether that yield tilt is appropriate for any individual depends on personal circumstances. This article is general information only, not financial advice.

This review walks through what VHY actually holds, how it generates its yield, what the franking implications look like for Australian resident taxpayers (with the tax disclaimer that applies to every figure here), its fees, its historical returns, and how it compares to three other dividend-focused options: VAS (the broad Australian market), IHD (the iShares yield-focused alternative) and SYI (the SPDR yield-focused alternative).

At a glance

Full name	Vanguard Australian Shares High Yield ETF
Provider	Vanguard
Index tracked	FTSE Australia High Dividend Yield
Annual fee (MER)	0.25% p.a.
Fee per $10,000	$25/yr per $10,000
Fund size	$8.9B
Holdings	79
Trailing distribution yield	4.1%
Distribution frequency	Quarterly
Industry cap	40% maximum per industry
Single-stock cap	10% maximum per company
Listed since	2011
Data vintage	Q2 2026

Fee, fund size, yield and holdings data is reported from fund manager disclosures, reviewed quarterly. Past performance is not a reliable indicator of future performance. Tax treatment depends on your individual circumstances. Speak with a registered tax adviser.

What is VHY?

VHY is the Vanguard Australian Shares High Yield ETF, listed on the ASX in 2011. It tracks the FTSE Australia High Dividend Yield Index, which selects ASX-listed companies based on forecast (rather than trailing) dividend yields. The result is a subset of the broad Australian market that tilts toward higher-dividend-paying companies, primarily banks, materials and consumer staples.

The methodology is more disciplined than simply ranking by yield. The index excludes Australian Real Estate Investment Trusts (A-REITs) and applies two important caps: no single industry can exceed 40% of the fund and no single company can exceed 10%. Those caps matter in the Australian context, where the four major banks alone often make up around 30% of the broad market, and where without a cap the four-bank concentration on a yield screen could easily exceed 50%.

VHY charges a management expense ratio of 0.25% per year. On a $10,000 holding that is $25/yr per $10,000. As at Q2 2026, VHY held approximately $8.9 billion in assets and approximately 79 positions.

What does VHY hold?

VHY's top holdings as at Q2 2026 are BHP Group Ltd (11.91%), Commonwealth Bank of Australia (10.18%), Westpac Banking Corp (6.92%), National Australia Bank Ltd (6.41%), Woodside Energy Group Ltd (6.15%), Rio Tinto Ltd (5.99%), ANZ Group Holdings Ltd (5.81%), Telstra Group Ltd (5.78%), Macquarie Group Ltd (4.23%), Transurban Group (4.2%). The composition is dominated by the major Australian banks, large miners and selected industrials with established dividend track records. By sector, the fund is heavily concentrated in Financials (around 39.4%), Materials (around 24.7%) and Consumer Staples / Energy / Communication Services making up most of the remainder.

Compared with VAS, which holds 316 companies across the entire ASX 300, VHY holds 79 companies selected for yield. The top 10 holdings represent approximately 68% of the fund, materially more concentrated than VAS's top 10 weight of 47%. That concentration is the central feature of VHY, not a bug: the index is designed to tilt deliberately toward higher-yielding names.

Full live holdings, sector and country breakdowns are on the VHY page. Holdings data is reported from fund manager disclosures, reviewed quarterly.

VHY dividend yield and distributions

VHY's trailing distribution yield as at Q2 2026 is approximately 4.1%, paid quarterly. This is materially higher than the broad ASX 300 via VAS (approximately 3.3%), which is the central reason investors hold VHY in the first place. Distributions vary each period based on the dividends received from the underlying companies and are not guaranteed. Past performance is not indicative of future returns.

Two things to understand about that yield. First, the index targets forecast yield, not realised yield, so it does not guarantee that the distribution paid in any given quarter matches the index's headline level. Second, the methodology screens for companies that have paid higher dividends recently; this is not a guarantee that those payout rates are sustainable in future periods. A "yield trap" is when a stock's headline yield rises because the price has fallen on bad news, not because the company has lifted its payout. The index methodology helps but does not fully eliminate this risk.

Franking credits

For Australian resident taxpayers, VHY distributions can include franking credits because many of the underlying companies (particularly the banks) pay fully franked dividends. The franking percentage varies each distribution. Franking credits may reduce the tax payable on the distribution depending on an individual's tax position, marginal rate and entity type (individual, super fund, company). For a rough estimate of the franking-credit boost on a given pre-tax yield, use the Franking Credit Calculator.

Tax treatment depends on your individual circumstances. Speak with a registered tax adviser before relying on any franking estimate.

VHY fees

VHY's management expense ratio is 0.25% per year. On a $10,000 holding that is $25/yr per $10,000. On a $100,000 holding, the headline cost is approximately $250 per year. By comparison, the broad ASX 300 ETF VAS charges 0.07% p.a. and the alternatives IHD and SYI charge 0.3% p.a. and 0.2% p.a. respectively. VHY sits between the broad-market option and the actively-tilted alternatives on fees.

VHY historical returns

Historical total returns reported by Vanguard as at Q2 2026 are approximately 22.3% over one year, 14.9% p.a. over three years and 11.9% p.a. over five years (annualised, total return including distributions, after the stated MER). Past performance is not indicative of future returns. Total return figures include both price appreciation and reinvested distributions.

Two observations on those numbers. First, total returns are not the same as headline yield, the total return reflects both the dividends paid and the price movement of the underlying companies. Second, the yield-tilted methodology has historically produced different return outcomes from the broad market depending on which sectors were in favour at the time. Past performance is not indicative of future returns. General information only, not financial advice.

VHY vs VAS

VAS and VHY are commonly compared because they are both Vanguard's Australian shares ETFs. The difference is the index. VAS tracks the broad S&P/ASX 300, which is market-cap weighted and includes A-REITs. VHY tracks the FTSE Australia High Dividend Yield Index, which selects for forecast yield, excludes A-REITs and caps any single industry at 40% and any single company at 10%.

	VHY	VAS
Index	FTSE Australia High Dividend Yield	S&P/ASX 300
Annual fee	0.25% p.a.	0.07% p.a.
Fund size	$8.9B	$50.7B
Holdings	79	316
Trailing distribution yield	4.1%	3.3%
Distribution frequency	Quarterly	Quarterly
A-REIT exposure	Excluded	Included
Top 10 concentration	68%	47%

ETFLens calculates approximately 87% holdings overlap between VHY and VAS based on top holdings. This is meaningful: VHY's top holdings are a tilted subset of VAS's top holdings, weighted toward yield. Past performance is not indicative of future returns. Yield figures are trailing distribution yields based on recent distributions. Whether VHY's higher headline yield, more concentrated sector exposure and exclusion of A-REITs is appropriate for any individual depends on their objectives, time horizon and tax position. General information only, not a recommendation.

VHY vs IHD vs SYI

There are three other widely held Australian high-yield ETFs commonly compared with VHY. Each takes a different methodological angle on the same broad question (how to select higher-yielding ASX companies) and the differences show up in concentration, fees and historical yield.

	VHY	IHD	SYI
Provider	Vanguard	iShares	SPDR (State Street)
Annual fee	0.25% p.a.	0.3% p.a.	0.2% p.a.
Fund size	$8.9B	$387.9M	$290M
Holdings	79	50	57
Trailing distribution yield	4.1%	5.1%	4.8%
Distribution frequency	Quarterly	Semi-annually	Quarterly

IHD applies an ESG screen on top of its yield methodology, which excludes a small number of companies common in other yield indices. SYI uses MSCI's selection methodology and is the smallest of the three by fund size. ETFLens calculates approximately 69% holdings overlap between VHY and IHD, and approximately 67% between VHY and SYI. Past performance is not indicative of future returns. General information only, not financial advice.

Who might consider VHY

VHY is often discussed in plain-English investor commentary by Australian resident taxpayers who want a tilt toward income generation from Australian shares, who value the franking credit treatment available on franked dividends, and who are comfortable holding a more concentrated Australian shares portfolio than the broad market. These are descriptions of how the fund is typically positioned, not recommendations. The right product for any individual depends on their objectives, financial situation, time horizon, tax position and risk tolerance.

VHY is sometimes used in a portfolio context as a "satellite" position alongside a broad-market core (such as VAS or A200), in a deliberate income tilt that an investor wants to apply on top of broad-market exposure. Whether that is appropriate depends entirely on the individual. ETFLens does not provide financial advice.

Things to consider before investing

• Yield is not return: a high headline distribution yield does not necessarily mean a high total return. Total return includes price movement, and yield-screened funds can underperform the broad market in periods when high-growth (lower-yielding) sectors lead.
• Concentration in banks and materials: the cap structure helps but VHY remains heavily concentrated in Financials and Materials. Investors who are uncomfortable with the four-pillar bank concentration should look at the holdings carefully.
• No A-REIT exposure: the FTSE index methodology excludes A-REITs. Investors who want a real-estate income component would need a separate ETF such as VAP.
• Franking is variable: the franking percentage attached to distributions varies each period. Past franking rates are not a guarantee of future franking. Tax treatment depends on your individual circumstances. Speak with a registered tax adviser.
• Yield trap risk: a stock can appear high-yielding because its price has fallen on bad news rather than because management has increased the payout. The methodology helps screen this but does not fully eliminate it.
• Overlap with broad-market holdings: holding both VHY and VAS means paying two fees for partially overlapping exposure. The ETF Overlap Checker shows the duplicated portion.

The VHY Product Disclosure Statement (PDS) and Target Market Determination (TMD) are available at vanguard.com.au. Reading the PDS before investing is the most direct way to understand exactly what the fund is, how it is structured, and what risks it carries.

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. Fee, fund size, yield, franking and holdings data is reported from fund manager disclosures, reviewed quarterly. Always check the current PDS for the most recent fee and holdings information before investing. Tax treatment depends on your individual circumstances. Franking credit estimates are not guaranteed and vary each distribution. Speak with a registered tax adviser. ETFLens does not hold an Australian Financial Services Licence. Always read the relevant PDS and consider seeking advice from a licensed financial adviser (AFS licence holder) before making any investment decisions.