3 Lowest-Cost Index ETFs on the ASX

There is a trend among fund issuers to slash the fees of ASX Exchange Traded Funds (ETFs). Globally, it’s seen the average asset-weighted expense ratio drop year over year.

It isn’t confined to only passively managed ETFs but also actively managed funds. That’s a big win for investors. It’s a trend that’s been continuing year over year.

Lowest Cost Australian ETFs

ASX-traded ETFs that track an equities index, or passively managed are part of the trend.

Betashares

The Australian fund manager Betashares Australia 200 ETF (ASX: A200) has bragging rights as the lowest-cost ETF on the ASX after slashing its fees from 0.07% to 0.04% per annum in 2023.

A200 tracks the performance of an index (before fees and expenses) comprising 200 of the largest companies by market capitalisation listed on the ASX.

It was a great move as A200 now has $4,296 million in net assets.

Performance

Time                                                                   Return

1 Year 7.12%
3 Year p.a. 9.89%
5 Year p.a. 9.84%

Blackrock

iShares S&P 500 ETF (ASX: IVV) is the co-holder of the lowest management fee title of 0.04% per annum with Betashares.

IVV tracks the S&P 500 Index. This ETF invests in and aims to match the performance of large capitalisation US equities.

IVV has $7,171 million in net assets, tapping Blackrock’s long established name.

Performance

The stunning gains of US information technology stocks has lifted the performance of IVV over the past years.

Comparing it to ETFs that invest in Australia stocks but not US stocks is like comparing apples with oranges. Both have their place.

1 Year 3 Year 5Year 10 Year Incept
Total Return (%) 28.36 16.34 16.2 15.55 6.46

State Street

State Street’s SPDR S&P/ASX 200 (ASX: STW) has the third lowest management fee of 0.05% per annum for its ETF that aims to match the returns of the S&P/ASX 200 Index.

This is similar to the index tracked by Betashares’ Australia 200 ETF.

STW has $4,965.44 million of Funds Under Management.

Performance

1 Year 3 Year (p.a.) 5 Year (p.a.)
Fund Total Return 6.88% 9.49% 9.62%

A200 and IVV also boasted distribution yields of roughly 3.8% per annum for the ETF investor.

Investors have been big winners as manager slash fees to keep pace with keenly contested fund segments.

 

Disclaimer

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