Why investors study the S&P/ASX 200 Resource Fund ETF and MSCI Australia Select High Dividend Yield Fund ETF
The SPDR OZR ETF invests in resources companies from within the ASX 200 and aims to track the S&P/ASX 200 Resources Index.
The SPDR SYI ETF invests in a diversified portfolio of high-yielding ‘blue chip’ Australian companies – excluding real estate investment trusts (REITs). This ETF tracks the MSCI Australia Select High Dividend Yield Index.
Want to know (lots) more? Read through our full SYI ETF review: see our SYI ETF review now.
Obviously, an easy way to analyse any ETF or fund like SYI or OZR is with quantitative methods, such as studying the fees and past performance (keeping in mind past performance is no guarantee of future performance).
We’ll keep it straightforward and just study the fees. Based on our data for July 2022, the OZR ETF has a management expense ratio (MER) of 0.34% while the SYI ETF’s yearly fee was 0.35%.So OZR 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.
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 July 2022, the OZR ETF had an average annual return of 9.34%. During the same time, the SYI ETF returned 6.65%.
Finally, at Best ETFs Australia, we apply a rating to the ETF issuer or provider. That is, the company that starts and is responsible for operating the ETF on the ASX. There are too many considerations that go into our scoring to detail here. The issuer for both of these ETFs is SPDR, so we can’t rate these ETFs differently. However, the OZR had total funds invested (FUM) of $112.29 million and SYI had $291. million. More FUM is a sign of investor interest or uptake.
Conclusion
To keep reading about these two ETFs, be sure to visit our free OZR ETF report or SYI ETF review.
In summary, the SYI ETF ranks better against our internal scoring methodology but not by much compared to OZR.
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 2024, keep reading…
