It's been a rough couple of weeks for the Vanguard Australian Shares Index ETF (ASX: VAS). Back on Valentine's Day, VAS units closed at $105.55 each. Today, those same units are going for just $102.41. That's nearly 3% below where they were almost a fortnight ago.

Even so, this is a small bump in the road of what has been a very lucrative few months for VAS investors. It was only back in August that this popular ASX index fund was at a new 52-week low of $92.93 a unit.

Since then, investors have enjoyed a paper capital gain worth more than 10%. Adding dividend returns to that, and we have a very healthy investment to have owned indeed.

Now, I'm personally a VAS investor and have profited alongside other ASX investors in this exchange-traded fund (ETF)'s recent gains.

However, with this ETF still at a relatively high valuation, some investors might be worried about what the future might hold. That's thanks to a very small group of ASX shares, led by Commonwealth Bank of Australia (ASX: CBA).

Is VAS an ASX sell if CBA is?

It's no secret that the big four ASX bank stocks, led by CBA, dominate the Australian share market. As the Vanguard Australian Shares ETF is a reflection of said share market, the same can be said of VAS units.

As of 31 January, CBA, together with National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ), made up 22.77% of VAS' entire portfolio. That consists of roughly 300 ASX shares, mind you.

CBA alone accounted for 10.2%.

This means that more than $10 out of every $100 invested in VAS right now will end up in CBA shares.

Now, to be fair, this heavy concentration in the ASX banks has been a blessing for the Vanguard Australian Shares ETF over recent years.

Over the past 12 months alone, CBA shares have galloped 33% higher. Westpac has gained 20%. NAB was on track for a 21%-or-so rise before its sobering update this month made investors pump the brakes. Now, its 12-month rise sits at a far more sober 4%. It's a similar story with ANZ, which has tiptoed 5% higher since last February.

But it's CBA that might have some investors worried.

Much has been made about CBA shares' inherent disconnection to their own financial fundamentals. Its half-year earnings update this month had the bank reporting a 2% rise in cash net profits.

That's arguably decent. But enough to justify a 33% share price runup since February 2024? When its full-year earnings for FY2024 show falling profits? It's hard to make that math work.

So let's say, for argument's sake, that CBA shares are woefully overvalued. That should give pause to any VAS investor. Given that more than one-tenth of this index fund is tied to this bank's fortunes and all.

Foolish takeaway

I do wish that VAS wasn't so heavily tilted towards the ASX banks right now, and CBA in particular. But I'm still not selling this ETF. Index funds are designed to add to their winners and prune their losers over time.

Sure, I think there's a good chance CBA shares will come back to earth at some point. But even if the bank, for argument's sake, fell 50% tomorrow, it theoretically would mean that VAS units only take a 5.1% hit, given the bank's 10.2% weighting in the index fund's portfolio. As such, I'd rather own VAS units right now than CBA shares.