Here’s how we think about the VAS and A200 ETFs
The Vanguard VAS ETF provides exposure to the largest 300 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
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.
Get our team’s VAS ETF review, available free when you click this link: access the free investment report.
ASX: VAS or ASX: A200 performance
To make this article easier to digest, we’ll just study the fees or ‘management expense ratio’ (MER). Using data for July 2022, the VAS ETF has an MER of 0.10% while the A200 ETF had a yearly fee of 0.07%. So, A200 wins on this metric. Keep in mind, a more beneficial 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 split 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.
Three-year return?
As Jerry Maguire said, ‘show me the money’. 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 positive return one year just to generate inferior 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 July 2022, the VAS ETF had an average annual return of 6.53%. During the same time, the A200 ETF returned 6.79%.
In summary
Don’t forget our free reviews on ASX VAS and ASX A200.
For us, the VAS ETF ranks fairly better for our internal scoring methodology but not by much.
We hope this article helped you analyse ETFs. Don’t forget, there’s a lot more to investing well than what we just outlined (risks, diversification, other potentially better ETFs, etc.). Our analyst team at Rask Australia spends months looking at new ASX investments (it’s our day job!). To make your life easier, you can get the name of our team’s top ETF pick for 2024 in a free report. Keep reading to find out how to get our analyst’s report emailed to you right now…
