VDHG vs DHHF: Comparing Two Popular All-in-One ETFs

Ask a room of Australian index investors what they hold and a lot of them will say VDHG or DHHF. Both are "all-in-one" ETFs: you buy a single ticker and it spreads your money across thousands of companies around the world, rebalancing for you along the way. They look very similar on the surface, so what actually separates them?

This article puts the two side by side, shows where the main differences really sit, and summarises what investors and commentators tend to say. It is a comparison, not a pick.

The one-line difference

The biggest difference is bonds.

• VDHG (Vanguard Diversified High Growth Index ETF) holds roughly 90% growth assets (shares) and 10% defensive assets (bonds).
• DHHF (Betashares Diversified All Growth ETF) holds roughly 100% shares and no bonds.

Almost everything else, including how each fund behaves in a crash and how much it might return over decades, flows from that one choice.

Side by side

Figures are approximate and change over time, so check each fund's current product disclosure statement and fact sheet before you decide.

* Note on currency hedging: hedging aims to cancel out the effect of the Australian dollar moving against other currencies on your overseas shares. Neither choice is right or wrong, and each has trade-offs. Read our guide to hedged vs unhedged ETFs to see how it works and which suits you.

Fees: a small gap

DHHF is cheaper by roughly 0.08% a year. On a $100,000 balance that is about $80 a year, and about $400 a year on $500,000.

That is real money over decades, but it is small next to the effect of the bond allocation. Ten percent of your portfolio in bonds instead of shares will move your long-term return and your worst-year losses far more than 0.08% will.

Also remember that the headline fee is not the whole cost. Each fund can carry small extra costs inside the underlying holdings, which is another reason to read the current documents.

What is inside each fund

Both funds are broadly similar in the shares they hold: a big slice of Australian shares (around a third) and the rest spread across the US, other developed countries and emerging markets.

VDHG

VDHG is built from several Vanguard funds. It adds small companies and emerging markets alongside the big global names, and it hedges part of its international shares back to Australian dollars. The 10% in bonds is a mix of Australian and global bonds. It holds roughly 14,000 securities in total.

DHHF

DHHF is built from four Betashares ETFs, covering Australian shares, US shares, developed markets outside the US and emerging markets, plus a sliver of cash. It holds around 8,000 securities. It is a simpler, all-shares build with no bonds and, generally, no currency hedging. If hedging matters to you, our guide to hedged vs unhedged ETFs explains the trade-off.

How they behave in good times and bad

Because DHHF has no bonds, it tends to rise more in strong share markets and fall further in crashes. VDHG's bonds act as a cushion, so it usually falls a little less and recovers a little more calmly.

As a rough guide used by many commentators, in a severe crash like March 2020 an all-shares portfolio fell around 30% to 35%, while a 90/10 mix fell a few percentage points less. That gap is modest. The bonds are a seat belt, not a force field.

Over very long periods, shares have historically beaten bonds, so a 100% shares fund has tended to come out ahead, with a rougher ride. Past performance is no promise of future returns, and the two funds have only been side by side for a few years, so short-term return comparisons tell you very little.

Tax and distributions

Both funds pay distributions (income and any realised capital gains) that you report at tax time.

Online discussion on tax is mixed, and it pays to be careful here:

• Some investors say DHHF is slightly more tax friendly because it holds ETFs rather than unlisted managed funds.
• Others point out that DHHF's US holdings are US-domiciled, which can cause a little tax drag from foreign withholding tax.
• Others note VDHG can pass on capital gains when its underlying funds rebalance.

The honest summary is that the differences are small, sources disagree, and the effect depends on your own tax situation. Distribution frequency has also varied between funds and over time. For tax questions, check the funds' annual tax statements and speak to a registered tax agent.

Either way, switching from one fund to the other means selling, which can trigger capital gains tax on your profit. Our look at the 2026 Budget CGT changes is worth reading if you are thinking of switching.

What investors tend to say

Reading across online discussion and ETF commentary, a few themes repeat:

• VDHG suits a smoother ride. It is a common first choice for beginners and for people who know they might panic when markets drop.
• DHHF suits a long horizon. It tends to attract people with decades to go, a solid emergency fund and a stomach for big swings.
• Provider preference matters to some. Some like Vanguard's long track record as an index specialist. Others are happy with Betashares but are wary of a provider that keeps launching new niche products.
• Some prefer to build their own. A three-fund mix, such as an Australian shares ETF, a global shares ETF and a bond ETF, can match either fund with more control over tax and rebalancing, at the cost of doing the rebalancing yourself. Our 3 simple ASX model portfolios guide shows how that looks.

We cross-checked these themes across several sources. The facts (fees, bonds, structure) agree closely. The opinions (tax, "which is better") do not, which is a good sign that neither answer is wrong.

A simple way to think about it

Skip the question of which fund is better and ask how much of a fall you could sit through without selling.

The best fund is the one you will actually hold through a downturn. Selling at the bottom costs far more than any fee gap or bond allocation.

Conclusion

VDHG and DHHF are two good ways to do the same thing: own the world in a single trade. DHHF is a little cheaper and fully invested in shares. VDHG costs a little more and gives you a 10% bond cushion and some currency hedging.

Your next step is to decide your risk level first, then read the latest fact sheet for each fund, and pick the one that matches. Once you have chosen, the most important part is to keep investing regularly and leave it alone. For the bigger picture on ETFs, start with The Ultimate Guide to ETFs.