How Does the Vanguard Australian Government Bond Index ETF (ASX:VGB) Work and What Does It Hold?

Sonal Goyal

11 October 2026 02:25 PM AEDT

How Does the Vanguard Australian Government Bond Index ETF (ASX:VGB) Work and What Does It Hold?

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

The Vanguard Australian Government Bond index ETF (ASX:VGB) last traded at A$45.12 on 9 October 2026, up A$0.05 or 0.13% on the day, with 37,223 units traded and a bid/offer range of A$44.98 to A$45.23. The fund’s size was A$1.39 billion. This article summarises the fund’s structure, its latest distribution and the composition of its portfolio.

Ticker	Fund name	Price (9 Oct 2026)	Fund size	Category
ASX:VGB	Vanguard Australian Government Bond Index ETF	A$45.12 (+A$0.05, +0.13%)	A$1.39 billion	Bonds - Australia

Type	Distribution amount	Annual yield	Ex date	Record date	Payment date
Interim	A$0.275	3.34%	1 Oct 2026	2 Oct 2026	16 Oct 2026

Fund overview

VGB is an exchange-traded fund admitted to the ASX on 30 April 2012. It is categorised as Bonds - Australia, and its benchmark is the Bloomberg AusBond Govt 0+Y TR AUD index. The management fee is 0.16%, and there were 30,841,289 units outstanding. Its ISIN is AU000000VGB4.

The fund aims to hold all of the securities in the index where practical, or otherwise a representative sample. Vanguard selects holdings based on liquidity, access to markets, portfolio Cash Flow and minimum trade quantities with the aim of tracking the index’s return, and security weightings may differ from the index weightings.

Latest distribution

The latest distribution is an interim distribution of A$0.275 per unit, with an annual Yield of 3.34%. The ex-date was 1 October 2026, the Record Date 2 October 2026 and the payment date 16 October 2026. The annual yield is a calculated figure that depends on the unit price and past distributions, and it is not a forecast.

The fund’s recent ASX announcements include an updated estimated distribution (1 October 2026), the final distributions notice and the distribution reinvestment plan details (2 October 2026), a distribution tax estimate (5 October 2026) and an outstanding securities notice for September 2026 (7 October 2026).

Portfolio composition

The portfolio held 167 securities, with the top ten holdings making up 28.88% of the fund. By asset type, 99.07% was in bonds, 0.82% in cash and 0.11% in stock. All of the portfolio, 100.00%, was in Australia.

The largest holdings were Australian Commonwealth Government bonds, including a 2.75% bond at 3.13%, another 2.75% bond at 3.10%, a 3.25% bond at 3.02%, a 1.5% bond at 2.96%, a 2.5% bond at 2.93%, a 1% bond at 2.86%, a 4.75% bond at 2.85% and a 1.25% bond at 2.62%, together with two Australian Commonwealth Government Loans holdings at 2.71% and 2.64%.

Sector backdrop

Government bond Index Funds hold bonds issued by the Commonwealth and, depending on the index, other government issuers, and are generally exposed to Interest Rate movements rather than corporate Credit risk. When yields rise, bond prices generally fall, and when yields fall, prices generally rise.

Bonds - Australia category funds invest in traditional Australian fixed interest securities with terms to Maturity generally greater than one year and average credit quality typically ‘A’ or above.

A fund concentrated in a single issuer type, such as government bonds, has a different risk profile from a broader fixed interest fund that includes corporate and supranational bonds.

Risks investors should weigh

Interest rate risk is the main Factor affecting unit prices, because changes in yields alter the Market Value of the bonds held.

The fund’s returns may differ from the index because of fees and the use of a representative sample where holding every security is not practical. The portfolio is concentrated in Australian government securities, with all holdings in Australia.

Distribution amounts change each period and the annual yield does not guarantee future income. ETF units can trade at prices that differ from the value of the underlying assets, and trading volumes vary, with a bid/offer spread on the day.

What’s next

The distribution is payable on 16 October 2026. Investors who wish to understand the fund further may wish to read the product disclosure statement and the distribution reinvestment plan notice published on the ASX.

FAQs

Q: What is the Vanguard Australian Government Bond Index ETF?

A:An ASX-listed fund, code VGB, that aims to track the Bloomberg AusBond Govt 0+Y TR AUD index, with a management fee of 0.16%.

Q: What is the latest VGB distribution?

A:An interim distribution of A$0.275 per unit with an annual yield of 3.34%, paid on 16 October 2026 to holders on the 2 October 2026 record date.

Q: What does VGB hold?

A:About 99.07% bonds across 167 holdings, all in Australia, led by Commonwealth Government bonds.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.