It's been a relatively rough 12 months for ASX shares and the share market. In 2022, the S&P/ASX 200 Index (ASX: XJO) went backwards by around 5.5%. As such, it was always going to be a tough year for ASX exchange-traded funds (ETFs), such as those run by provider Vanguard. 

So let's look at the best-performing Vanguard ETFs over the past 12 months.

Of all Vanguard's ETFs, only four managed a positive return in the 12 months to 31 December 2022. Let's see which ones they were.  

Four Vanguard ETFs that delivered a positive return last year

Vanguard Infrastructure Index ETF (ASX: VBLD)

This infrastructure-based ETF managed to eke out a gain of 0.2% in 2022, including fees and dividend distributions. The Vanguard Infrastructure ETF holds companies such as power generators, railway companies, pipeline operators and telcos.

It's heavily weighted towards the US markets, with almost 70% of its holdings hailing from America. These include NextEra Energy Inc, Union Pacific Corp and Canadian National Railway Co.

This ETF has returned an average of 8.16% per annum since its inception in 2018. It charges a management fee of 0.47% per annum:

Vanguard Global Value Equity Active ETF (ASX: VVLU)

This ETF is a bit of a different beast, being an active ETF rather than an index fund. It uses modelling to build a portfolio of undervalued shares from around the world.

Again, the US is the most dominant market in this fund, but shares are drawn from countries as diverse as Japan, Canada, Israel and Hong Kong. Some of its current holdings include AT&T Inc, Meta Platforms Inc and Exxon Mobil Corp.

The Vanguard Global Value ETF returned 1.34% over 2022, after charging the annual management fee of 0.28%. Since its inception in 2018, this ETF has delivered an average annual return of 7.1% per annum.

Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC)

Back to an index fund now, and this ASX-based ETF tracks the largest 20 companies on the Australian share market.

Naturally, banks and miners like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are dominant here, with financials and materials shares accounting for more than 63% of the total portfolio.

Even so, this ETF was able to give investors a decent return of 4.53% last year, thanks in most part to some hefty dividend distributions. This ETF charges 0.2% per annum and has returned an average of 8.01% per annum since its inception in 2011.

Vanguard Australian Shares High Yield ETF (ASX: VHY) 

Last but certainly not least in terms of performance in 2022, we have the Vanguard High Yield ETF.

This fund invests in a basket of dividend-paying shares from the ASX, with the ETF currently invested in 74 income shares. These come from most corners of the ASX, but banks and miners are still quite dominant.

The Vanguard High Yield ETF hit it out of the park last year, delivering investors a dividend-driven return of 8.6% in 2022. This makes it Vanguard's most successful ASX ETF of last year.

This fund charges a fee of 0.25% per annum and has given investors an average return of 8.76% per annum since its inception in 2011. 

The post Which of the Vanguard ASX ETFs has performed best over the past year? appeared first on The Motley Fool Australia.

ETFs enable investors to buy into a portfolio of shares or assets with just one trade.

It would certainly be possible for investors to buy into a broad ETF which just follows an index like BetaShares Australia 200 ETF (ASX: A200) and Vanguard Australian Shares Index ETF (ASX: VAS).

But, I think there are some specialised ETFs that can provide more focused investments for retiree investors. A mixture of dividends and growth could be attractive.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY)

This fund is about creating a diversified portfolio of dividend-paying quality ASX-listed companies, chosen by Morningstar. It intends to capture the performance of the 25 highest dividend-paying ASX-listed shares, excluding real estate investment trusts (REITs), that meet Morningstar's required criteria. This combines a share's 'economic moat' and 'distance to default' qualities.

An economic moat refers to a company's ability to maintain its competitive advantages and defend its long-term profitability, such as intangible assets (like brand recognition and patents) or cost advantages.

The distance to default measure is used to predict the likelihood of bankruptcy which, the fund says, has "also proven an effective predictor of dividend cuts".

I think a portfolio of quality ASX dividend-paying shares can be a solid ETF choice for a retirement portfolio.

Some of the names in the portfolio include Ansell Limited (ASX: ANN), IPH Ltd (ASX: IPH), AUB Group Ltd (ASX: AUB), National Australia Bank Ltd (ASX: NAB), Iress Ltd (ASX: IRE), and Wesfarmers Ltd (ASX: WES).

Over the year to 31 July 2022, the income part of the return was 5.65%.

Vanguard Global Infrastructure Index ETF (ASX: VBLD)

Another area that could fit well into a retirement portfolio is infrastructure.

Infrastructure can be a good investment because of its typically consistent, and perhaps growing, earnings and distributions.

One of the advantages of this portfolio from Vanguard is that it's globally based. While just over two-thirds of the ETF is invested in the US, there are multiple other countries that have a weighting of more than 0.5% — Canada (14.6%), Japan (3.6%), UK (3.2%), Spain (2.2%), Australia (2.1%), Hong Kong (1.9%), Italy (1.6%), and France (0.7%).

In terms of sector allocation, at 31 July 2022, 'conventional electricity' made up 34% of the ETF, 'railroads' were 19.6% of the portfolio, 'pipelines' were 14% of the portfolio, 'multi-utilities' were 10.7% of the portfolio, and infrastructure REITs were 9.7% of the portfolio. Other smaller sectors include transportation services, water, telecommunication services, and telecommunications equipment.

According to Vanguard, the equity yield is 2.9%. That's not a bad starting yield.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The first ETF I wrote about was focused on dividends from Australian businesses.

However, the VanEck Morningstar Wide Moat ETF is invested in a portfolio of US shares that are viewed as strong, long-term businesses with wide economic moats.

The Morningstar investment team only choose shares that are seen as good value compared to how much they think the business is actually worth.

For a company to earn the status of having a wide economic moat, according to Morningstar, excess normalised profit must, with near certainty, be positive a decade from now. On top of that, excess normalised profit must, more likely than not, be positive 20 years from now. In other words, chosen investments could be solid picks for at least 20 years. But, the portfolio may move on from those holdings, depending on factors like valuation changes.

While this ETF isn't likely to pay much of a dividend, the total returns have been good in my opinion. The VanEck Morningstar Wide Moat ETF has made an average return per annum of 15.1% since June 2015. But, of course, past performance is no guarantee of future performance.

The post How I'd invest for retirement using just 3 ASX ETFs appeared first on The Motley Fool Australia.

Many ASX investors would be familiar with some of Vanguard's popular exchange-traded funds (ETFs). Indeed, the Vanguard Australian Shares Index ETF (ASX: VAS) remains the most popular ASX ETF on our share market today.

But until now, Vanguard has not been directly involved in the Australian superannuation industry. Until a few years ago, the company did offer its products indirectly through other super providers. But the company has ditched these avenues in preparation for its entry into the market itself.   

Vanguard primed to announce new superannuation products

This may have just gotten one step closer too. According to reporting in The Australian today, Vanguard has just received regulatory approval to "launch a suite of superannuation products" in the Australian market from the Australian Prudential Regulation Authority (APRA).

Vanguard's Australian chief executive, Daniel Shrimski, told The Australian that "our journey is just beginning… We think the simplicity, the low cost and the (investment) expertise that we will provide will resonate".

As a well-known provider of ETFs, many investors might assume that these ETFs may play a major role in what Vanguard will offer super customers.  

That would be a safe assumption, according to Shrimski. He said that Vanguard's products will be "more fund-based but we think ETFs will certainly be a part of the longer-term solution".

So what ETFs might Aussies be able to invest in under a Vanguard superannuation product? Well, the Vanguard Australian shares ETF would be a good start.

As Vanguard's most popular product, and the only one that covers either the S&P/ASX 200 Index (ASX: XJO) or the S&P/ASX 300 Index (ASX: XKO), it would be a safe bet that VAS is among the flagship ETFs that Vanguard will offer up.

Which Vanguard ETFs could be on offer?

But the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) would be another strong candidate. VSO covers around 210 of the smaller shares on the ASX.

Forget BHP Group Ltd (ASX: BHP) and the big four banks. VSO's largest holdings include companies like Lynas Rare Earths Ltd (ASX: LYC), Carsales.com Ltd (ASX: CAR) and Bendigo and Adelaide Bank Ltd (ASX: BEN).  

That could complement Vanguard's other ASX offer, the Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) nicely. VLC is an ETF that covers only the top 20 largest companies on the ASX.

Income investors might appreciate the inclusion of the Vanguard Australian Shares High Yield ETF (ASX: VHY).

But Vanguard has many other ETFs that look to shares beyond our shores.

The Vanguard MSCI International Shares Index ETF (ASX: VGS) is another probable shoo-in. This is Vanguard's flagship international shares ETF. VGS covers almost 1,500 individual shares hailing from more than 20 different advanced economies.   

These include Canada, France, Japan, the United Kingdom and Germany. Saying that, it is heavily dominated by US tech giants like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN).

Looking outside the ASX and the US

But we could also see the Vanguard FTSE All-World ex-US ETF (ASX: VEU) offered as well. This fund is similar to VGS, but excludes US shares. In their place, many emerging economies are represented, including India, Brazil, and Saudi Arabia. Overall, this ETF has more than 3,500 individuals holding within it.  

Ethically-minded investors might appreciate if there was the option to select the Vanguard Ethically Conscious International Shares Index ETF (ASX: VESG).

More regionally specific ETFs from Vanguard are also possibilities for inclusion in its superannuation offerings. This includes the Vanguard FTSE Europe Shares ETF (ASX: VEQ), the Vanguard FTSE Asia ex-Japan Index ETF (ASX: VAE) and the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE).

Other Vanguard ETFs covering different asset classes outside shares could also be potentially available. These might be the Vanguard Global Infrastructure Index ETF (ASX: VBLD). As well as the Vanguard Australian Fixed Interest Index ETF (ASX: VAF) for access to fixed-interest bond investments.  

So it's likely that new Vanguard super customers will have a plethora of ETFs to choose from when the company eventually brings its new superannuation products online. We don't yet know when this will be. But with Vanguard now gaining regulatory approval, it's probably going to be sooner rather than later.  

The post Could these ASX ETFs soon play a bigger role in Aussie super funds? appeared first on The Motley Fool Australia.

The share prices of most infrastructure companies, both on the ASX and global exchanges, have been among the hardest hit from the coronavirus fallout.

And unlike technology shares, most infrastructure shares are still well below their February 2020 highs. For investors with a longer-term horizon (2 or more years), this spells opportunity.

Why infrastructure share prices could be heading much higher

Social distancing, lockdowns and border closures put into place to control the pandemic have seen developed nations around the world fall deeply into recession. That includes the United States — the world's biggest economy — and most nations across Europe.

Australia is on that list as well, with gross domestic product (GDP) plummeting 7% relative to the previous 3 months in the quarter ending 30 June, the biggest fall on record. Since GDP also contracted 0.3% the previous quarter, that makes it an official recession. The first since mid-1990 to early 1991 for Australia.

To lift their economies out of recession (and keep their jobs), politicians across developed nations are proposing massive government spending on infrastructure projects, possibly reaching into the trillions of dollars globally.

The stimulus plans would sound quite familiar to former US President, Franklin D Roosevelt. He was the one who pioneered the 'New Deal' in the 1930s. This opened up the government's purse strings to fund road, bridge, and construction projects that put millions of people back to work and put an end to the Great Depression.

1 ASX infrastructure share with built in diversification

There are many different global infrastructure shares that stand to gain as government building booms gets underway.

One way to invest across many of these with a single ASX share is through the Vanguard Global Infrastructure Index ETF (ASX: VBLD). This exchange-traded fund (ETF) holds 139 infrastructure shares across the globe.

Its major holdings focus on railways as well as energy and communications infrastructure companies. Furthermore, 66% of its market allocation exposure is in the US with 14% in Canada and 6% in Japan.

The ETF had a great start to 2020, with the share price gaining 12% through to 21 February, while the All Ordinaries Index (ASX: XAO) gained 6% over the same period.

Then the virus hit. And the share price tanked 25% through to its low on 25 March. It has edged higher from that low, but it's still down 22% from the February highs.

With governments prepared to fund a building boom that could run several years or more, there's no reason the Vanguard Global Infrastructure ETF couldn't see a return to its February highs. That would represent a 28% upside from today's price of $52.65 per share.

The post 1 ASX share to buy today to capture the global 'New Deal' appeared first on The Motley Fool Australia.

Before 2020, infrastructure investments were all the rage for ASX dividend investors.

Cast your mind back to 2019 and interest rates were being dropped to (what was then) record lows. The ASX was exploding, partly as a result. Investors were beginning to gobble up dividend-paying ASX shares in an attempt to replace the government bonds and term deposits that were quickly becoming impotent as true, inflation-beating investments.

And among the favourite dividend shares being gobbled up were infrastructure companies. These companies were some of the 'safest' dividend shares on the market, or so many investors believed. As such, these were the shares in the hottest demand from dividend investors. These investors believed the kinds of cash flows these companies offered were far more robust than other ASX dividend shares like Commonwealth Bank of Australia (ASX: CBA). From end to end in 2019, Transurban Group (ASX: TCL) shares rose roughly 30%, as did Sydney Airport Holdings Pty Ltd's (ASX: SYD).

What kind of world would we live in where people weren't using Transurban's tolled-roads, or flying in and out of Sydney Airport, investors might have asked. I wrote an article back then describing how many investors saw these companies as 'bond proxies', or companies with dividends so safe they could be treated as a fixed-income investment.

Well, 2020 has given that answer and broken this thesis in the most brutal of fashions.

Dividend heroes to zeroes

The coronavirus pandemic has comprehensively destroyed the notion that any company's dividend can be regarded as 'safe' or bond-like. Transurban has been forced to slash its dividend payouts in 2020. Sydney Airport has cancelled its interim dividend entirely.

But that in turn begs the question: what role can infrastructure shares play at all in a 2020 dividend portfolio? After all, it's not just Transurban and Sydney Airport that have cut their dividend in 2020. A range of other former ASX dividend heavyweights have also slashed shareholders' payouts (as I alluded to earlier). That includes all four of the major ASX banks, Ramsay Health Care Limited (ASX: RHC), Woolworths Group Ltd (ASX: WOW), BHP Group Ltd (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL).

So it's not like infrastructure shares are alone in this conundrum. Still, investors have always been attracted to infrastructure companies because of the dividend safety discussed earlier, as well as the perception of these companies owning 'real assets' that offer additional perks like inflation-hedging.

Holding infrastructure investment shares in 2020

So what place do infrastructure investments have in a 2020 portfolio? Well, I think there's still merit in this area for a post-COVID world. Although many infrastructure companies have been buckling under the pandemic, others have been doing just fine. Gas pipeline owner APA Group (ASX: APA) is one such example. It has managed to deliver to its investors a dividend increase this year. That's not a feat many other companies can boast of.

If you'd like a well-rounded portfolio of infrastructure shares instead of trying to pick one or two winners, there's a couple of solutions. The Vanguard Global Infrastructure Index ETF (ASX: VBLD) is one such option. It's an exchange-traded fund (ETF) that holds 139 infrastructure shares from around the world. It offers a trailing dividend yield of 3.37% on current pricing and holds energy retailers, railroad companies, airports, and ports, among others.

The Magellan Infrastructure Fund (ASX: MICH) is another option. It's an actively managed fund that holds between 20 to 40 shares and offers a trailing yield of 4.19%.

If it's infrastructure investment you want, either of these funds would make a nice, balanced option, in my view.

The post The pitfalls of investing in infrastructure in 2020 appeared first on The Motley Fool Australia.