The Complete Guide to Australian Index ETFs: A200, IOZ, VAS, and MVW Compared
When it comes to investing in Australian shares, index ETFs are among the most popular options. These ETFs provide broad exposure to the Australian stock market, making them ideal core holdings for many investors. In this comprehensive guide, we'll compare Australia's most popular index ETFs: A200, IOZ, VAS, and MVW.
Understanding Australian Index ETFs
Australian index ETFs track major Australian share market indices, providing exposure to the largest companies listed on the ASX. These ETFs are popular because they:
- Offer broad diversification across Australian companies
- Have low fees compared to actively managed funds
- Provide simple, transparent exposure to the Australian market
- Are highly liquid and easy to trade
The Major Players
The four most popular Australian index ETFs are:
- A200 - BetaShares Australia 200 ETF
- IOZ - iShares Core S&P/ASX 200 ETF
- VAS - Vanguard Australian Shares Index ETF
- MVW - VanEck Australian Equal Weight ETF
Each has different characteristics, fees, and investment approaches. Let's compare them in detail.
Side-by-Side Comparison
Australian Index ETFs Comparison
| ETF | Name | Fee | FUM | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|---|---|---|
| A200 | Betashares Australia 200 ETF | 0.04% | $8.5B | 6.68% | 10.99% | 11.51% |
| IOZ | iShares Core S&P/ASX 200 ETF | 0.05% | $7.7B | 6.62% | 10.92% | 11.23% |
| VAS | Vanguard Australian Shares Index ETF | 0.07% | $21.9B | 6.98% | 10.93% | 11.10% |
| MVW | VanEck Australian Equal Weight ETF | 0.35% | $3.2B | 5.68% | 9.69% | 9.52% |
This comparison table provides a quick overview of how these ETFs compare across key metrics. However, the differences go deeper than just numbers.
Detailed ETF Analysis
A200 - BetaShares Australia 200 ETF
Betashares Australia 200 ETF (A200)
- Management Fee: 0.04%
- FUM: $8.5B
- 1-Year Return: 6.68%
- 3-Year Return: 10.99%
- 5-Year Return: 11.51%
- Benchmark: n/a
- Provider: Betashares
A200 tracks the S&P/ASX 200 Index, providing exposure to Australia's 200 largest companies. It's known for its very low fee structure.
IOZ - iShares Core S&P/ASX 200 ETF
iShares Core S&P/ASX 200 ETF (IOZ)
- Management Fee: 0.05%
- FUM: $7.7B
- 1-Year Return: 6.62%
- 3-Year Return: 10.92%
- 5-Year Return: 11.23%
- Benchmark: S&P/ASX 200 Index
- Provider: iShares
IOZ also tracks the S&P/ASX 200 Index, offering similar exposure to A200 but from a different provider (iShares/BlackRock).
VAS - Vanguard Australian Shares Index ETF
Vanguard Australian Shares Index ETF (VAS)
- Management Fee: 0.07%
- FUM: $21.9B
- 1-Year Return: 6.98%
- 3-Year Return: 10.93%
- 5-Year Return: 11.10%
- Benchmark: S&P/ASX 300 Index
- Provider: Vanguard
VAS tracks the S&P/ASX 300 Index, providing exposure to 300 companies rather than 200. This broader exposure can provide slightly more diversification.
MVW - VanEck Australian Equal Weight ETF
VanEck Australian Equal Weight ETF (MVW)
- Management Fee: 0.35%
- FUM: $3.2B
- 1-Year Return: 5.68%
- 3-Year Return: 9.69%
- 5-Year Return: 9.52%
- Benchmark: N/A
- Provider: VanEck
MVW uses an equal-weighting approach rather than market-cap weighting, giving each company equal weight regardless of size. This reduces concentration in the largest companies.
Top Holdings Comparison
Understanding what these ETFs actually hold helps you understand their differences:
Top Holdings Comparison
A200 Top Holdings:
- BHP Group Limited: 11.0%
- Commonwealth Bank of Australia: 7.6%
- CSL Limited: 6.0%
- Westpac Banking Corporation: 4.5%
- National Australia Bank Limited: 4.3%
IOZ Top Holdings:
- BHP Group Limited: 11.2%
- Commonwealth Bank of Australia: 7.8%
- CSL Limited: 6.1%
- Westpac Banking Corporation: 4.6%
- National Australia Bank Limited: 4.4%
VAS Top Holdings:
- BHP Group Limited: 10.5%
- Commonwealth Bank of Australia: 7.2%
- CSL Limited: 5.8%
- Westpac Banking Corporation: 4.3%
- National Australia Bank Limited: 4.1%
The holdings comparison reveals how these ETFs differ in their approach. Market-cap weighted ETFs (A200, IOZ, VAS) are heavily concentrated in the largest companies, while MVW's equal-weighting approach provides more balanced exposure.
Performance Comparison
How have these ETFs performed over different timeframes?
Performance Comparison
| ETF | 1-Year | 3-Year | 5-Year |
|---|---|---|---|
| A200 | 6.68% | 10.99% | 11.51% |
| IOZ | 6.62% | 10.92% | 11.23% |
| VAS | 6.98% | 10.93% | 11.10% |
| MVW | 5.68% | 9.69% | 9.52% |
Performance can vary between these ETFs due to their different approaches. Market-cap weighted ETFs (A200, IOZ, VAS) will perform similarly to each other, while MVW's equal-weighting approach can lead to different performance characteristics.
Fee Impact Analysis
Small fee differences can have significant impacts over time:
Fee Impact Analysis (10-Year Projection on $100,000 investment, 7% annual return)
A200 (Fee: 0.04%):
- Value after 10 years: $195980.99
- Fee cost over 10 years: $734.15
IOZ (Fee: 0.05%):
- Value after 10 years: $195797.84
- Fee cost over 10 years: $917.30
VAS (Fee: 0.07%):
- Value after 10 years: $195432.00
- Fee cost over 10 years: $1283.14
MVW (Fee: 0.35%):
- Value after 10 years: $190374.42
- Fee cost over 10 years: $6340.71
This analysis demonstrates how even small fee differences compound over time. Lower fees mean more of your money stays invested and works for you.
Market-Cap Weighting vs Equal Weighting
Understanding the difference between these approaches is crucial:
Market-Cap Weighting (A200, IOZ, VAS):
- Larger companies have more weight
- Reflects market capitalisation
- More concentrated in largest companies
- Lower turnover and costs
- Performance closely tracks the index
Equal Weighting (MVW):
- Each company has equal weight
- Less concentration in largest companies
- More exposure to smaller companies
- Higher turnover and potentially higher costs
- Can outperform or underperform market-cap weighted approaches
Which ETF Should You Choose?
The right choice depends on your investment objectives:
Choose A200 or IOZ if:
- You want the lowest fees
- You're comfortable with market-cap weighting
- You want exposure to the ASX 200
- You prefer established providers
Choose VAS if:
- You want broader exposure (300 companies vs 200)
- You prefer Vanguard as a provider
- You want slightly more diversification
- You're comfortable with slightly higher fees for broader exposure
Choose MVW if:
- You want to reduce concentration in largest companies
- You prefer equal-weighting approach
- You want more balanced exposure across companies
- You're comfortable with potentially different performance characteristics
Long-Term Investment Perspective
When building a long-term investment portfolio, consider:
- Fees: Lower fees compound significantly over time
- Diversification: Ensure adequate diversification for your needs
- Consistency: Choose an approach you can stick with long-term
- Simplicity: Simpler strategies are often easier to maintain
- Alignment: Ensure the ETF aligns with your investment objectives
Building a Portfolio
These ETFs can serve as core holdings in a diversified portfolio:
- Australian exposure: Use one of these as your Australian equity allocation
- International diversification: Combine with international ETFs
- Asset allocation: Balance with bonds, cash, and other assets based on your risk tolerance
- Regular contributions: These ETFs are ideal for regular investment plans
Conclusion
A200, IOZ, VAS, and MVW are all excellent options for gaining exposure to the Australian share market. The best choice depends on your specific needs, preferences, and investment objectives.
When choosing between these ETFs:
- Compare fees and understand their long-term impact
- Understand the difference between market-cap and equal-weighting
- Consider your diversification needs
- Evaluate provider reputation and track record
- Consider how the ETF fits your overall portfolio
- Maintain a long-term perspective
For detailed, up-to-date information on each of these ETFs, visit their individual pages on our website, where you can see current fees, performance, holdings, FUM, and more.
Important Disclaimer: The information on this website is general financial advice only and is issued by The Rask Group Pty Ltd. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire any financial product. If you don't know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Financial Services Guide before using this website.