A look at BetaShares A200 and the IOZ ETF
The Betashares A200 ETF provides exposure to the largest 200 Australian companies, based on market capitalisation. Unlike many other Australian shares ETFs, A200 uses the Solactive Australia 200 Index. This is virtually the same thing as the indices provided by S&P/ASX, as it also uses a market capitalisation weighting.
The iShares IOZ ETF provides exposure to the largest 200 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
Learn more about the IOZ ETF with our full analysis page. Get our IOZ review.
So where do we start analysing IOZ and A200? In addition to using our years of experience analysing ETFs to ‘get a feel’ for the ETF, there are simple checks and balances our team uses to compare similar ETFs.
The first is fees. We score ETFs based on their management fees and costs and we take into account the spread. We’ll then compare these ‘all in’ fees and costs across sectors, strategy types and ETF providers.
We’ll keep it easy and just study the fees. Based on our data for December 2021, the A200 ETF has a management expense ratio (MER) of 0.07% while the IOZ ETF’s yearly fee was 0.09%.So A200 comes out on top. That said, a more useful metric to know is the fee quartiles that these ETFs find themselves in (note: quartile 1 is best). For example, any ETF which has a fee below 0.3% would be considered in our first (best) quartile.
How do they perform?
Performance matters. 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 solid return one year just to generate lacking 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 2021, the A200 ETF had an average annual return of 14.80%. During the same time, the IOZ ETF returned 14.66%.
There’s one more important thing to consider: the company that starts and runs the ETF. They are in charge of operating the ETF on the ASX. The provider of the A200 fund is BetaShares. Betashares ranks highly for our scores of ETF providers and issuers in Australia. We believe BetaShares is one of the leading providers of index and non-index style products to retail investors in Australia. Meanwhile, the company responsible for IOZ is iShares. iShares ranks highly for our scores of ETF providers and issuers in Australia. We consider iShares to be among the best ETF providers in Australia and globally.
Next steps
Did you know we have free reports? View our ASX A200 review and ASX IOZ review today.
In summary, the IOZ ETF ranks higher against our internal scoring methodology but not by much compared to A200.
Please, keep in mind, there is much more to selecting 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 2022, keep reading…
