My understanding is that it is fully exposed to the AUD/USD...

My understanding is that it is fully exposed to the AUD/USD exchange rate (ie no hedging)

See the second paragraph under objectives:-

https://www.vanguardinvestments.com.au/retail/ret/investments/etfdetailVTS.jsp

"VTS is invested in US shares so there is a possibility that the value of a foreign investment, measured in Australian dollars, will decrease because of unfavourable changes in the currency exchange rates."

Today VTS is marginally up on the USD currency ETF. ie 1.47% (VTS) verses 1.45% (USD) at time of writing. The diference is probably just different timings of the latest trades and the spread between buyer and seller. All of the gain in VTS today is the currency as the US market stock market went down by about 0.2% at least. Ie VTS is a blend of most of the US stocks not just DOW and NASDAQ etc.

I like VTS as it has a pretty low management fee ie 0.06% per annum. Also if the US market drops suddenly due to some disaster the US$ will probably go up at the same time which gives you a bit of downside buffer. On the upside you have protection against a softening $AUS/economy etc. and get upside to the US stock market.