Key takeaways:

• VDHG and DHHF are high growth ETFs that comprise multiple ETFs, with net assets in the former being more than nine times that of its junior rival

• Management fees are less expensive for DHHF, and its performance since inception comes out ahead of VDHG, which has traded for three more years and offers a small amount of exposure to income asset classes

Last time around, we compared some of the most popular ASX-listed ETFs that offer exposure to the United States, home of the world largest stock market.This time around, we're taking a look at two of the market favourite high growth ETFs. The Vanguard Diversified High Growth Index ETF (ASX: VDHG) and BetaShares Diversified All Growth ETF (ASX: DHHF) are almost in a category of their own, with both funds effectively representing an ETF of ETFs.

If you're looking at investing in either of these ETFs, here is a breakdown of the main points to consider.

Fund Objective

Vanguard Diversified High Growth Index ETF seeks to track the weighted average return of the various indices of the underlying funds in which it invests, in proportion to the Strategic Asset Allocation', before taking into account fees, expenses and tax.

VDHG is made up of various funds, offering broad diversification across multiple asset classes, mainly with a growth focus, but also offering some exposure to income asset assets.

Similarly, the BetaShares Diversified All Growth ETF aims to provide low-cost exposure to a diversified portfolio with high growth potential, which the fund manager states may suit investors with a high tolerance for risk.

DHHF is a blend of cost-effective ETFs traded on the ASX and other global exchanges, but unlike VDHG, this fund is fully-invested in shares. It is marketed as an all-cap, all-world' share portfolio, designed to provide investors with exposure to long-term high growth potential.

Fund Profiles and Holdings

Since its admission to the ASX in late 2017, the Vanguard Diversified High Growth Index ETF has grown to roughly $1.9 billion in funds under management. At the time of writing, VDHG is the second most held ETF within the Selfwealth community, as measured by the value of all units held.

Two years after VDHG hit the market, BetaShares launched its own high growth ETF. Initially, the fund offered 90% exposure to growth assets and 10% exposure to defensive assets, but changes occurred in December, 2020, which saw the fund renamed, as well as a change in its investment strategy and risk-return profile to focus 100% on growth assets. 

While DHHF is a popular name in the Selfwealth community, ranking 10th for ETF holdings by value, its total size is dwarfed by its more established peer. Net assets within the fund total $218.9 million. 

Based on the funds data on the ASX website at the time of writing, VDHG recorded a gain of $5.8 million in funds under management throughout February, including $6.1 million in fund inflows. There were nearly 10,300 trades involving VDHG shares across all market participants.

Over the same period, trading in DHHF was less prominent. There were almost 2,400 trades involving the ETF, and while the fund recorded an improvement in funds under management to the tune of $4.4 million, fund inflows were just $2.8 million.

The above data suggests that not only is VDHG still the most popular mixed asset' ETF on the ASX, but the fund is also expanding its lead. 

Both funds have a unique structure, which is due to the fact they are both a blend of ETFs. That means they hold other funds within their net assets, which of course feature hundreds of underlying holdings. VDHG offers exposure to multiple asset classes, including bonds and fixed income, whereas DHHF, other than a negligible level of cash, focuses exclusively on local and international equities.

At a high level, however, the pair hold the following assets.

VDHG^DHHF*Vanguard Australian SharesIndex Fund (ASX: VAS)

 35.9% 

Vanguard Total Stock Market ETF(NYSE: VTI)

 36.4% 

Vanguard International SharesIndex Fund (ASX: VGS)

26.7%

BetaShares Australia 200 ETF(ASX: A200)

35.9%

Vanguard International SharesIndex Fund (Hedged) - AUD Class (ASX: VGAD)

15.9%

SPDR Portfolio Developed Worldex-US ETF (NYSE: SPDW)

20.4%

Vanguard Global Aggregate BondIndex Fund (ASX: VBND)

7.0%

SPDR Portfolio Emerging Markets ETF(NYSE: SPEM)

6.7%

Vanguard International Small CompaniesIndex Fund (ASX: VISM)

6.6%

AUD (cash)

0.5%

Vanguard Emerging Markets SharesIndex Fund (ASX: VEMS)

4.9%

USD (cash)

0.1%

Vanguard Australian Fixed InterestIndex Fund (ASX: VAF)

3.0%

^ = as at Feb 28, 2023; * = as at April 11, 2023

Performance and Distributions

Since inception, VDHG has achieved a gross return of 7.69% p.a., and a total return of 7.4% p.a. The latter result is after the deduction of relevant costs including management fees.

As mentioned earlier, DHHF changed its investment strategy and management fees a little over a year after its high growth fund was first admitted to the ASX. 

As such, performance data for BetaShares' All Growth fund is only available from December, 2020. Nonetheless, since inception, the fund has returned 7.58% p.a.

It may be unwise to compare or assess funds over a short period of time, in which case, investors could choose to look at the underlying ETFs held within these products to form a better understanding as to how these funds have performed.

As always, it is important to remember that past performance is not indicative of future performance, so the above results are merely a picture of how these funds fared in the past.

Both the Vanguard Diversified High Growth Index ETF and BetaShares Diversified All Growth ETF offer quarterly distributions to unitholders, albeit the amount and timing of distributions will vary from period to period, and there may even be periods where no distributions are made.

Fees

In terms of fees, BetaShares' Diversified All Growth ETF edges out its opponent. With management fees of 0.19% per annum, the fund manager claims that DHHF offers the lowest fee amongst all-in-one diversified ETFs currently available on the Australian market. 

Based on the previous financial year, BetaShares estimates that DHHF recoverable expenses, indirect costs, and transaction costs are 0.0% per annum of the fund Net Asset Value.

By way of comparison, the Vanguard Diversified High Growth Index ETF has an ongoing management fee of 0.27% per annum. Vanguard advises prospective buyers that there are no indirect costs or net transaction costs associated with VDHG.

Keep in mind, because both funds are blended ETFs, investors may wish to look into fees associated with the ETFs held within each fund. 

Please refer to the relevant Product Disclosure Statements for up-to-date details on costs and expenses, which may be deducted from the fund assets as and when they are incurred. 

Summary

Both VDHG and DHHF are unique in that they comprise multiple ETFs. They are funds that offer exposure to a number of different funds, and each ETF pays unitholders distributions on a quarterly basis.

In the case of Vanguard Diversified High Growth Index ETF, this fund also spans multiple asset classes, so not only do you receive exposure to local and international equities, but the ETF includes exposure to bonds and fixed interest. On the other hand, BetaShares' DHHF ETF is more or less exclusively focused on equities.

With more history behind it, VDHG is also the larger of the pair, with net assets more than nine times the size of DHHF. The latter charges a more economical management fee, and on a performance basis, DHHF has slightly outperformed VDHG since inception in terms of total returns after fees.

VDHG

DHHF

Exposure

Equities

Bonds

Fixed Interest

Equities

Cash

Net Assets

$1.9 billion

$218.9 million

Number of ETFs in Fund

7

4

Performance since inception (p.a.)

7.40%

7.58%

Distributions

Quarterly

Quarterly

Management Fees (p.a.)

0.27%

0.19%