May is a reasonable time for investors to step back and think about long-term portfolio growth. Not every move requires picking individual winners. Sometimes the better strategy is to buy a well-constructed exchange-traded fund (ETF) and hold it for years without interference. Two top Vanguard ETFs Australia investors are considering this month fit that description.
Figure 1: Vanguard branding [Courtesy: ESG Today]
The Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) and the Vanguard S&P 500 US Shares Index ETF (ASX: V500) offer distinct but complementary exposure. One taps into Asia’s long-term growth story.
The other gives access to the depth and scale of the United States market. Together, they represent two of the best Vanguard ETFs May has put in focus for local investors.
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VAE: Gaining Exposure to Asia Beyond the Usual Portfolio
The Vanguard FTSE Asia Ex Japan Shares Index ETF is the more adventurous of the two top Vanguard ETFs Australia offers. It provides exposure to share markets across Asia, excluding Japan, including China, India, Taiwan, and South Korea, among others.
VAE was incepted on 9 Dec 2015 and holds 1,867 securities, tracking the FTSE Asia Pacific ex Japan, Australia and New Zealand Net Index in Australian dollars.
Figure 2: ETF investment concept image [Courtesy: Magnific]
The ETF carries a management fee of 0.40% per annum and distributes income quarterly. The top 10 holdings represent 34.3% of the total ETF.
What VAE Adds to an Australian Portfolio
Many local investors already hold exposure to Australian banks, miners, and United States technology shares. Asia, however, remains underrepresented in most Australian portfolios despite being home to large populations, rising incomes, growing digital economies, and critical manufacturing supply chains.
VAE’s 52-week range spans A$74.07 to A$99.95 per share, reflecting the volatility inherent in Asian equity markets alongside their capacity for strong recoveries. The ETF had a dividend yield of 1.89% and a price-to-earnings ratio of 17.75.
For investors comfortable with that volatility, the Vanguard FTSE Asia Ex Japan ETF opens access to consumption growth, financial development, semiconductors, electric vehicles, and online platforms across the region.
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V500: A Core Holding Built Around the US Market
The Vanguard S&P 500 US Shares Index ETF is the simpler and more familiar of the two best Vanguard ETFs that May investors are reviewing.
The V500 ETF was listed on 4 Mar 2026 and seeks to track the return of the S&P 500 Net Total Return Australian Dollars Index, before accounting for fees, expenses, and tax. Its portfolio concentrates primarily on large-cap equities.
It gives exposure to 500 of the largest listed companies in the United States, spanning technology, healthcare, financials, consumer goods, industrials, and communication services.
For investors assessing the top Vanguard ETFs Australia currently offers, V500 stands out as a clean route to owning a slice of corporate America.
Figure 3: Long-term investment growth concept [Courtesy: Magnific]
Why the Vanguard S&P 500 ETF Works as a Core Holding
The ASX is heavily concentrated in banks and resources. The Vanguard S&P 500 ETF addresses that directly by adding exposure to large global technology and healthcare businesses that have no meaningful representation on the local exchange.
As of 7 May 2026, V500 was trading at A$52.31 per share, with a 52-week range of A$47.49 to A$52.35 per share. Investors do not need to track every company within the index.
The ETF spreads capital across a large group of businesses, and the index adjusts naturally over time as companies rise and fall in importance.
That simplicity is a core part of the Vanguard S&P 500 ETF’s appeal for long-term holders.
Industry Outlook
Demand for low-cost index ETFs among Australian retail investors continues to grow steadily. The ASX ETF market has expanded considerably over recent years, with broad-market and regional index products gaining traction as investors seek diversification beyond local equity concentration.
The best Vanguard ETFs May investors are examining reflect this structural shift, as more Australians use ETFs as portfolio building blocks rather than supplementary holdings.
For long-term investors, the combination of a US core and an Asian growth tilt increasingly represents a pragmatic and diversified framework.
Future Direction and Impact on Australian ETF Investors
Both VAE and V500 carry meaningful implications for investors building long-term portfolios on the ASX:
- V500 provides concentrated exposure to the S&P 500, the most widely tracked US equity benchmark, with the index self-adjusting over time
- VAE offers access to 1,867 holdings across Asian markets, giving exposure to growth drivers absent from the ASX
- Asian markets carry higher short-term volatility, including political risk, currency movements, regulation shifts, and uneven economic cycles
- The Vanguard S&P 500 ETF serves best as a core portfolio holding, while VAE functions as a long-term growth tilt
- Neither ETF guarantees future returns, and past performance does not indicate future performance
- Both are among the top Vanguard ETFs Australia investors are considering for diversified, low-cost long-term exposure
- For investors willing to buy, hold, and add over time, together these two best Vanguard ETFs May offers could bring useful diversification and growth potential
Frequently Asked Questions
Q1. What is the ASX code for the Vanguard S&P 500 ETF?
Ans. The Vanguard S&P 500 US Shares Index ETF trades on the ASX under the code V500. It was listed on 4 Mar 2026.
Q2. What does VAE invest in?
Ans. VAE tracks the FTSE Asia Pacific ex Japan, Australia and New Zealand Net Index. It holds 1,867 securities across Asian markets, including China, India, Taiwan, and South Korea.
Q3. What is VAE’s management fee?
Ans. The Vanguard FTSE Asia Ex Japan Shares Index ETF charges a management fee of 0.40% per annum.
Q4. Can these ETFs be used together in a portfolio?
Ans. Yes. V500 can serve as a core US market holding while VAE adds a regional growth tilt. Together, they represent two of the top Vanguard ETFs Australia investors use to diversify beyond local exposure.
Q5. Are distributions from VAE franked?
Ans. VAE’s most recent distribution paid on 20 Apr 2026 included 0% franking. Investors should review each distribution notice for the applicable franking percentage.
Disclaimer
This article is intended for informational purposes only and does not constitute financial or investment advice. Content is based on reporting available online. Share price data reflects figures available at the time of publication. Investing in securities involves risk, including the possible loss of principal. Past performance is not an indication of future performance. Readers should consider the relevant Product Disclosure Statement and seek independent financial advice before making any investment decisions. Colitco does not hold any position in the funds or organisations mentioned.
Sources
https://www.fool.com.au/2026/05/09/2-top-vanguard-etfs-id-buy-and-hold-in-may/
https://www.investsmart.com.au/shares/asx-vae/vanguard-ftse-asia-ex-japan-shares-index-etf
https://au.investing.com/etfs/v500
https://pearler.com/invest/asx/asset/V500
https://fund-docs.vanguard.com/ETF-Vanguard_FTSE_Asia_ex_Japan_Shares_Index_ETF_8215_FS_VAE.pdf
Tags: ASX investing, Vanguard ETFs Last modified: May 10, 2026
