Insights

How did the Vanguard Australian Shares Index ETF perform in June?

ASX blue chip shares had a tough time during June.
The post How did the Vanguard Australian Shares Index ETF perform in June? appeared first on The Motley Fool Australia. –

June was one of the toughest months in recent years for the Vanguard Australian Shares Index ETF (ASX: VAS).

In June 2022, the VAS ETF dropped by 8.7%. We haven’t seen a drop that hard since the COVID-19 crash in 2020.

Remember, an exchange-traded fund’s (ETF) return is decided by the returns of the underlying businesses.

The Vanguard Australian Shares Index ETF follows the S&P/ASX 300 Index (ASX: XKO), comprising 300 of the biggest businesses on the ASX.

This means, collectively, the ASX 300 fell by 8.7%. At the end of May 2022, these were the positions with a weighting over 3%: BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG).

As readers can see, a majority of the biggest holdings are banks. The big four banks accounted for almost 20% of the portfolio at the end of May 2022. Including Macquarie, it was around 23% of the portfolio. BHP by itself was 10.2% of the portfolio. These few ASX blue-chip shares account for more than a third of the portfolio.

Declines for ASX blue-chip shares

June was not a kind month for many of the VAS ETF holdings I just mentioned.

The BHP share price saw a 7.5% drop over June.

The CBA share price fell 13.4%.

The NAB share price dropped 12.4%.

The Westpac share price declined 18.3%.

The ANZ share price fell 12%.

I’m not going to list every ASX 300 share’s performance in June, but the above movements were some of the biggest contributors to the Vanguard Australian Shares Index ETF’s fall.

Why did they fall?

With BHP, movements in the iron ore price can have significant impacts on the BHP share price because that’s what generates a lot of the profit for the company. Over the month, the iron ore price fell by around US$20 per tonne.

With the banks, the move by the Reserve Bank of Australia (RBA) to increase the interest rate by 50 basis points, or 0.5%, in June may have stirred things up.

While a higher interest rate may assist the banks’ net interest margins (NIM), analysts think it could also cause problems for banks as well. For example, Morgan Stanley noted that higher interest rates could cause higher arrears and bigger loan losses.

Time will tell how low the iron ore price goes and how high the RBA interest rate is going to go. Another rate hike is expected later today by the RBA.

The post How did the Vanguard Australian Shares Index ETF perform in June? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of June 1 2022

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Here’s what happened to the CSL share price in June
Why ASX 200 value shares are surviving the sell-off better than growth shares
5 things to watch on the ASX 200 on Tuesday
3 more of Morgans’ best ASX share ideas for July
Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info