Differences between the DHHF and VDHG ETFs?

Question

Can someone please explain the differences between the DHHF and VDHG ETFs in terms of their investment strategies, asset allocation, and suitability for long-term growth? Which one would be more appropriate for someone aiming for balanced growth with moderate risk? Thanks!

Answer

Certainly! When comparing the DHHF and VDHG ETFs, it’s important to understand their investment strategies, asset allocation, and how they might fit into a long-term growth portfolio.

DHHF (BetaShares Diversified All Growth ETF):
– Investment Strategy: DHHF is designed to provide investors with exposure to a diversified portfolio of growth assets across global markets. It is an all-equity ETF, meaning it invests 100% in equities.
– Asset Allocation: The fund invests across Australian and international shares, including emerging markets. It does not hold bonds or other fixed-income assets, which positions it as a higher-risk, higher-potential-return investment compared to mixed-asset ETFs.
– Suitability for Long-Term Growth: Given its all-equity strategy, DHHF is suitable for investors who have a high risk tolerance and a long investment horizon. The lack of fixed-income assets means it may experience higher volatility, but potentially offers higher returns over the long term.

VDHG (Vanguard Diversified High Growth ETF):
– Investment Strategy: VDHG aims to provide long-term capital growth through a diversified portfolio that includes a mix of asset classes. It targets a high allocation to equities but also includes bonds and other income-generating assets.
– Asset Allocation: VDHG typically allocates around 90% to equities (including Australian, international, and emerging markets) and 10% to fixed-income assets like bonds. This mix allows for high growth potential with a slight moderation of risk through the inclusion of bonds.
– Suitability for Long-Term Growth: VDHG is designed for investors seeking substantial capital growth with a slightly lower risk profile than an all-equity ETF. The inclusion of bonds helps to buffer against market volatility, making it more suitable for those seeking balanced growth with moderate risk.

Choosing Between DHHF and VDHG:
For someone aiming for balanced growth with moderate risk, VDHG might be more appropriate. Its diversified approach not only targets long-term capital growth through its substantial equity allocation but also mitigates risk slightly with its fixed-income component. This can be particularly appealing for investors who prefer a mix of growth and stability.

DHHF, on the other hand, would be more suitable for investors who are comfortable with a higher level of risk and volatility, aiming purely for capital growth without the cushioning effect of bonds.

In the context of using Pearler, both ETFs can be considered depending on your investment goals and risk tolerance. Pearler’s platform facilitates long-term investing by allowing you to set and track your investment goals, making it easier to manage a diversified portfolio like VDHG or a growth-focused portfolio like DHHF.

You can find out more about this topic here: Why Is Vdhg So Popular

Disclaimer

I am an AI-powered chatbot and not a financial advisor. The information provided is for educational and informational purposes only and should not be considered as financial advice. Investing involves risks, and past performance is not indicative of future results. It is important to conduct thorough research and consider your own financial situation and risk tolerance before making any investment decisions. It is always recommended to consult with a qualified financial advisor or professional before making any investment decisions.

Answer

Hi Ruby,

They’re both incredibly similar.

The strategies are basically the same (whole world share markets covered with basically the same allocations of around 35-40% Aussie shares, the rest international), both high growth options.  Both costing around 0.2-0.3% in fees.

The main difference is VDHG has 10% fixed interest in its portfolio which makes it slightly lower risk and possibly slightly lower return.  But the differences are pretty negligible between the two to be perfectly fair.

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Ruby Martin.

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