A Look at the VAP Share Price: A-REIT Basket May not Be Best

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Retail Rent Down - Commercial Lease

Today we look at the Vanguard Australian Property Securities Index ETF [ASX:VAP] share price for clues as to where the Australian property market might be heading.

In today’s piece, we cover:

  • What does a unit of VAP get you?
  • Advantages of holding VAP
  • Disadvantages of holding VAP
  • Aussie property market could have more to run through to 2026
  • Basket may not be best
  • Chart of XJO for context

Let’s take a look at the VAP share price chart for the last three months:

VAP ETF Share Price - Vanguard Australian Property Securities Index

Source: tradingview.com

This is a familiar one, especially for a big ETF.

A sharp sell-off and now it’s slowly edging upwards (yellow trend line).

I’ve marked out potential resistance and support levels (blue lines).

From a March low, confidence is closely creeping into this Aussie real estate bellwether.

What does a unit of VAP get you anyway?

VAP unit represents these top 10 A-REIT holdings

You can see VAP’s top 10 holdings, a who’s who of Aussie REITs:

 

 

ASX VAP ETF Top 10 Holdings

Source: https://www.vanguardinvestments.com.au/

A broad range spanning industrial, commercial and residential.

Here are the advantages to holding VAP, as I see it:

  • Broad spectrum of holdings
  • Low fees
  • History of dividends

These are the drawbacks I see:

  • Perceived ‘low risk’ may assume the property bounce back will be uniform across the different segments
  • Doesn’t allow for more fine-grained approach

We’ve been banging on about the property cycle at Profit Watch, saying it could run through to 2026.

But at the same time, this doesn’t mean all sectors will perform the same, and as a result a basket like VAP might not be the best approach.

We have highlighted this in our look at the SCG share price, and the JBH share price.

One final thought.

If, like me, you think the ASX 200 [XJO] has another leg down in it, you could, for instance, wait for a monthly bar to enter the third ellipse marked here:

ASX VAP ETF Share Price - Vanguard Australian Property Securities Index

Source: tradingview.com

The VAP share price moved down with the market previously…

Something to consider.

Regards,
Lachlann Tierney,

For Profit Watch