Vanguard controversy: Does VDHG lead to higher taxes?

The fund’s structure can lead to higher distributions and taxes for investors

An article from Morningstar this morning

https://www.morningstar.com.au/funds/article/vanguard-controversy-does-vdhg-lead-to-higher/216840

The controversy centres around a quirk in VDHG’s design: it’s an ETF made up of seven unlisted index funds. While similar on paper, ETFs and unlisted funds operate differently in practice. ETFs are bought and sold on a stock exchange via market makers, while investors trade unlisted fund shares directly with the fund manager

Think of VDHG as an ETF wrapped around seven unlisted managed funds—a fund of funds

This is not the only approach. For example, the BetaShares Diversified All Growth ETF (ASX: DHHF) is made up of four other ETFs, including one from Vanguard—an ETF wrapped in ETFs