Now could be an opportune time to run the rule over the Betashares Australian Sustainability Leaders ETF (ASX: FAIR) and Vaneck Australian Equal Weight ETF (ASX: MVW). Using our internal quantitative analysis, these ETFs appear to offer strong exposure to the Australian shares sector.
Getting to know the MVW and FAIR ETFs
The BetaShares FAIR ETF provides exposure to the largest Australian shares and focuses on companies which operate ethically. FAIR has been certified by the Responsible Investment Association Australasia (RIAA), as part of the Responsible Investment Certification Program.
The VanEck MVW ETF provides exposure to over 60 of the largest and most liquid Australian shares, equally weighted. By equally weighting shares, this ETF aims to reduce concentration risk in specific Australian stocks and sectors.
Note: you can continue learning about the MVW ETF on our report page. ASX MVW report.
To make this article easier to digest, we’ll just study the fees or ‘management expense ratio’ (MER). Using data for December 2020, the FAIR ETF has an MER of 0.49% while the MVW ETF had a yearly fee of 0.35%. So, MVW wins on this metric. Keep in mind, a more insightful metric to know is the fee quartiles that these ETFs find themselves in (note: quartile 1 is best). Meaning, we take all the Australian shares ETFs in our database and put them into 4 quartiles, based on their fees. For example, any ETF which has a fee below 0.3% would be considered in our first (best) quartile.
Track record
Let’s look at the past results. Keep in mind, performance isn’t everything — and past performance is not indicative of future performance. It’s just one part of a much bigger picture. The reason we say performance is not everything is because of volatility of financial markets and the economy from one year to the next. Some ETFs and funds can put in a strong return one year just to generate weak returns the next time around. That’s why we prefer three-year or seven-year track records over one-year track records. It can smooth out the temporary performances caused by external factors. Both ETFs have achieved our three-year performance hurdle. As of December 2020, the FAIR ETF had an average annual return of 9.75%. During the same time, the MVW ETF returned 7.21%.
Best ETFs Takeaway
To keep reading about these two ETFs, be sure to visit our free FAIR ETF report or MVW ETF review.
In summary, the FAIR ETF rates better for our internal scoring methodology but not by much compared to MVW.
Please, keep in mind, there is much more to choosing a good ETF. That’s why you should now use these skills to find the best ETF you can. If you want the name of our team’s top ETF pick for 2021, keep reading…
