There are more than 200 exchange-traded funds (ETFs) listed on the ASX and more being added every month. That can make it difficult to sort the good from the bad and find an ETF that works for you. So, here are the five most popular (and largest) ASX ETFs right now.
Vanguard Australian Shares Index ETF
With around $4.8 billion of funds under management (FUM), the Vanguard Australian Shares Index ETF (ASX: VAS) is by far the largest Australian ETF. The VAS ETF aims to track the performance of the S&P/ASX 300 Index and at the 31st May 2020 had 318 holdings. Aside from being the biggest ASX ETF, it is also one of the cheapest with a management fee of 0.1% per year.
Our VAS report is available here.
SPDR S&P/ASX 200 ETF
The second largest ASX ETF is the SPDR S&P/ASX 200 Fund (ASX: STW) from State Street Global Advisors. The STW ETF has more than $3.7 billion in FUM and is the oldest ETF in Australia, having launched in 2001. Similar to VAS, the STW ETF focuses on large-cap Australian shares and aims to track the performance of the S&P/ASX 200 Index. STW charges a management fee of 0.13% per year.
More information is available in our STW report.
iShares S&P 500 ETF
The iShares S&P 500 ETF (ASX: IVV) is the largest international shares ETF currently listed on the ASX, with FUM of more than $3.1 billion. The IVV ETF provides exposure to the largest listed companies in the US without the hassle of international investment and brokerage fees and US tax forms. One interesting difference between the Australian and US markets is exposure to information technology companies; the IVV ETF has around 25% of its funds invested in IT, and much lower exposure to financial and resources companies, which dominate the ASX. IVV is the second cheapest ASX ETF with a management fee of 0.04% per year.
Our IVV report is available here.
Vanguard MSCI Index International Shares ETF
The Vanguard MSCI Index International Shares ETF (ASX: VGS) provides exposure to large-cap companies from developed economies around the world and has FUM of more than $2 billion. While most of the companies are based in the US, this ETF also provides exposure to countries including Japan, the UK, Switzerland, France, and Canada. The VGS ETF might suit an investor looking to diversify an Australian portfolio, and it’s a reasonably cheap way to do so with a management fee of 0.18% per year.
All the details are available in our VGS report.
BetaShares Australian High Interest Cash ETF
Rounding out the top five is the BetaShares Australian High Interest Cash ETF (ASX: AAA). This defensive, income-focused ETF has FUM of around $1.7 billion and charges a management fee of 0.18% per year. The AAA ETF allocates funds into deposit accounts with selected Australian banks, allowing the investor to get term deposit rates without the illiquidity of depositing the money directly. Paying monthly distributions, this ETF may suit an investor looking for a defensive position to diversify a share portfolio and provide a regular income stream.
More coverage of the AAA ETF can be found in our report.
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Disclaimer: At the time of writing, Max owns shares in the iShares S&P 500 ETF (ASX: IVV).
