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Between VHY and the A200 Betashares. which one do you think is the better investment for growth and dividends?
A: Vanguard’s VHY (Vanguard Australian High Yield ETF) tracks the FTSE Australian High Dividend Yield index. This index comprises stocks that have higher forecast dividend yields relative to other ASX listed companies. There are 64 stocks.
The total return of the index in 2019 was 20.88%, underperforming against the S&P/ASX 200 by 2.52% (this returned 23.4%). Accordingly, the ETF returned 20.83%.
Betashares A200 ETF tracks the Solactive Australian 200 Index. A less well known index, this is an index of 200 shares. It is fairly similar to the S&P/ASX 200. In 2019, the index returned 23.33% and the ETF 23.19%.
In regard to index tracking investments, If your priority is income, I would go for VHY. If your priority is “growth and dividends”, I wouldn’t go for either of these ETFs but instead opt for Vanguard’s VAS, which tracks the broader S&P/ASX 300.
