Key takeaways: 

• The iShares Core S&P/ASX 200 ETF, SPDR S&P/ASX 200 Fund, and Betashares Australia 200 ETF are the three ASX-listed funds that seek to track the 200 largest companies on the ASX. 

• IOZ, STW, and A200 are broadly comparable in terms of net assets, and each pays a quarterly distribution, albeit Betashares’ A200 ETF charges a slightly lower management fee and has also delivered superior returns compared with its peers. 

Each month, Selfwealth community data shows that investors continue to invest  money into a range of ETFs, including several funds that track the local share market. During periods of market volatility, like that seen at the start of this month, investor interest in index-tracking ETFs has typically increased across the Selfwealth community.  

While the Vanguard Australian Shares Index ETF (ASX: VAS) has been a perennial favourite, its focus is slightly broader than the trio of funds that instead seek to track the performance of the 200 largest companies on the ASX. These ETFs include the iShares Core S&P/ASX 200 ETF, the SPDR S&P/ASX 200 Fund, and the Betashares Australia 200 ETF. 

Previously, we compared VAS and A200, the two most popular ETFs on the Selfwealth platform that track the local market. However, on this occasion, with another 18 months of performance data at hand, and the local market at an all-time high at the end of July, we’re running a head-to-head comparison between like-for-like names in IOZ, STW, and A200. 

Fund Objective 

Beginning with the iShares Core S&P/ASX 200 ETF, the fund aims to provide investors with the performance of the S&P/ASX 200 Accumulation Index, before fees and expenses. This index is designed to measure the performance of the 200 largest Australian securities listed on the ASX. 

According to BlackRock, which oversees the iShares suite of products, the fund is more suitable for investors seeking capital growth and/or income distribution with a minimum investment time frame of five years, and with a medium to high risk-return profile. A longer investment horizon is intended to smooth out returns and allow for the type of market volatility witnessed during the pandemic, or more recently, in early August 2024. 

The SPDR S&P/ASX 200 Fund seeks to closely match, before fees and expenses, the returns of the S&P/ASX 200 Index, which State Street describes as “the institutional investable benchmark in Australia.”  

The index, which offers exposure to an estimated 85% of the Australian equity market capitalisation, measures the performance of the 200 largest index-eligible ASX-listed shares by float-adjusted market capitalisation. 

Lastly, the Betashares Australia 200 ETF aims to track the performance of an index, before fees and expenses, comprising 200 of the largest companies by market capitalisation listed on the ASX. The fund tracks the Solactive Australia 200 Index, which for all intents and purposes, effectively tracks the S&P/ASX 200 index, like its peers. 

Fund Profiles and Holdings 

IOZ was admitted to the ASX in December 2010, but today oversees a larger pool of net assets than its peers. At the end of July, the fund’s net assets were $6.06 billion, albeit in light of market volatility at the start of August, this figure had decreased to $5.78 billion as at August 12, 2024. Nonetheless, based on net assets, IOZ is one of the largest ASX-listed ETFs across all categories. 

On the other hand, STW was the first exchange-traded fund listed in Australia, admitted to the ASX back in August 2001. As at August 12, 2024, its total funds under management (FUM) stood at $5.23 billion, down from $5.39 billion at the end of last month. 

Rounding out the trio, last month saw the Betashares Australia 200 ETF surpass STW for net assets, despite only making its debut on the ASX in May 2018. At the end of July, the fund’s net assets were $5.59 billion, but assets under management have since declined to $5.43 billion, as of August 9, 2024. 

According to the most recent ASX Investment Products monthly update, dated July 2024, A200 significantly outperformed both of its peers for AUM growth last month. The fund, managed by Betashares, recorded a $398.0 million increase in FUM, with $207.8 million of that total attributable to fund inflows. On a relative basis, A200’s decrease in FUM during the early stages of August has been less than its peers. 

Total FUM for IOZ increased by $375.5 million last month, including $162.2 million in fund inflows, while STW’s FUM grew by $193.2 million, albeit it was the only fund among the trio to record net outflows, to the tune of $23.6 million. 

Across all ASX trading (broker) participants, there were over 23,200 trades in the iShares Core S&P/ASX 200 ETF last month, which was a 33% increase compared with June. The next highest result came from A200, which attracted just over 19,400 trades across all ASX broker participants, representing a 14% increase over the month. In distant third, there were 10,580 trades in the SPDR S&P/ASX 200 Fund throughout July, down nearly 14% month-over-month. 

Given the consistency between the three fund’s investment objectives, and the indices with which they seek to track, the core holdings in IOZ, STW, and A200 are the same, with only minor variances to their weightings. 

 ^ = as of August 9 2024 

Performance and Distributions 

As of July 31, 2024, the iShares Core S&P/ASX 200 ETF has achieved average returns of 13.37% (over one year), 7.35% (over three years), and 7.43% (over five years). Looking further back, the fund’s average return since inception is 8.30% per annum. 

By way of comparison, the SPDR S&P/ASX 200 Fund yielded a slightly higher return of 13.44% over the 12 months ending July 31, 2024. In the three and five-year period leading up to said date, STW’s average return was nearly identical to IOZ at 7.37% and 7.46% per annum respectively. Since inception, being August 2001, STW has yielded an average total return of 8.11% per annum. 

Rounding out the trio, A200 boasts the highest return across the 12 months through to July 31, 2024, yielding a total return of 13.84%. Across a three and five-year timeline, the average return for A200 is also higher at 7.61% per annum and 7.71% per annum respectively. Among the three funds, A200 lays claim to the highest return since its inception, achieving an average return of 8.97% p.a. 

The three funds have delivered comparable returns over the years, which is attributable to the benchmark indices they seek to track. By the same notion, all three funds pay quarterly distributions to unitholders, albeit the amount and timing of distributions will vary from period to period, and there may even be periods where no distributions are made.  

Fees 

Both the iShares Core S&P/ASX 200 ETF and the SPDR S&P/ASX 200 Fund charge a management cost of 0.05% per annum. 

As a minor point of differentiation, Betashares charges a management fee of 0.04% per annum, with the fund manager describing A200 as “the world’s lowest cost Australian shares index ETF.” 

Management fees are calculated in relation to the net asset value (NAV) of each fund on a daily basis, and prospective investors should note that other fees may apply.  

Please refer to the relevant Product Disclosure Statements for up-to-date details on costs and expenses, which may be deducted from the fund’s assets as and when they are incurred.   

Summary 

With each of the three funds seeking to track the 200 largest companies on the Australian share market, there are only modest differences as far as the features of these ETFs.  

Nonetheless, despite being the most recent of the three to be admitted to the ASX, the Betashares Australia 200 ETF has quickly grown its net assets to similar levels as its peers, even surpassing the SPDR S&P/ASX 200 Fund, thanks in part to its lower management cost, and a superior performance record across all comparable timeframes. 

Past performance is not an indicator future performance, and it is important to always do your own research before making decisions to invest.  

For more information, you can read about the iShares Core S&P/ASX 200 ETF here, the SPDR S&P/ASX 200 Fund here, and the Betashares Australia 200 ETF here. Before investing in any ETFs, you should consult the respective product’s Product Disclosure Statement, which will be available on the fund’s website.