-are the dividends re-invested used to by more VAS units
-does it make it harder to calculate capital gains on units if I participate in the DRP
I know for yearly tax purposes they send you out a summary that you can just plug in, and also they send stuff to the tax office so eTax normally just auto-fills it for me. If you mean after you sell units - I don't know, never sold any units.
-what happens if the amount is not enough to buy the extra unit, what happens to that portion of money
You can own fractions of units.
-would you suggest VAS for the long term as in 20years or is it something you would suggest selling as soon as there were significant gains
Buy and buy and buy and never sell until you are an old, rich man/woman.
-i also read about allocations between different ETF's. If I had 6k in VAS and I wanted VEU and VTS would I have to buy the ETF separately or can i split that 6k between the 3 ETF's? Is there a charge for this?
Depends if you are talking about the ETFs (traded on the market) or the Managed Funds (purchased through Vanguard). The managed funds each require a minimum buy-in of $5000. The ETFs have no minimum and you can buy whatever units you want of whatever ETFs just like you could shares in different companies.
-is there any compounding effect in buying and holding ETF for the long term (end balance similar to a managed fund after 30 years)
OR am I only banking on the growth of the unit price overtime
The compounding comes from your dividend reinvestment as well as the value of the shares held over time. This is no different to how the managed funds/mutual funds work. Increase in the value of any stock is literally capital growth + any dividends paid out/reinvested.
How well do you think these VAS holdings would do, compared to a mutual fund given the timeframe, initial capital and yearly contributions.
Over the long-term, index ETFs such as VAS, will definitely outperform mutual funds in the same sector. A small percentage of mutual funds will outperform each year, but because it's never the same funds outperforming for very long, the inevitable victor is the index.
Sorry for the silly questions, I have read many forums and am now asking questions to what I still don't understand before jumping into VAS or a mutual fund.
There were no silly questions in there.
I got a little confused in how you seemed to use the terms 'mutual fund' and 'managed fund' interchangeably. Try to understand the differences between Vanguard ETFs, Vanguard Managed Funds, and all other non-index tracking 'mutual funds'. Vanguard's ETFs and Managed Funds track the same indexes, but are purchased differently and have different expense ratios.
The Vanguard Managed Funds have higher management costs but you can BPAY small amounts of money into them every week essentially like you would a savings account (there is still a buy/sell spread but it's a minor enough thing to ignore). They are great for trickling money into long-term, and when your balance gets over 100,000 you can shift into a wholesale fund where the management costs are close enough to the ETFs to be negligible (in my opinion).
The Vanguard ETFs are bought on the stock market and will cost you for each trade (cost varies depending on who you are with - nabtrade, commbank, etc). For this reason they are best purchased in bulk, ie save up and buy them all at once - monthly, quarterly or yearly.
Other non-index-tracking mutual funds are all different and I have no specific opinion on them except the general opinion that it is dumb to try and beat the index, so Vanguard is better.