Want to know what the easiest way to invest in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is?
Good! It's a pretty good index to own. It offers more diversification than simply owning one or two ASX shares. It offers an attractive dividend yield and hopefully long-term capital growth. Don't forget the bonus of franking credits.
So, what are the best ways to get access?
BetaShares claims to have the lowest-costing Australian-focused exchange-traded fund (ETF) on the ASX with its BetaShares Australia 200 ETF (ASX: A200). Its management fees are only 0.07% per annum. You can buy units of it like any other share on the ASX.
Vanguard, the world's leading provider of low-cost ETFs has the Vanguard Australian Share ETF (ASX: VAS), which seeks to track the ASX 300, which will likely offer very similar returns to the ASX 200. Its annual cost is only 0.14% per annum.
There are then a multitude of listed investment companies (LIC) which mostly invest in large cap shares, in similar weightings to the index, such as Australian Foundation Investment Co. Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG) – their annual management fees were 0.14% and 0.15% respectively in the last year.
If you want to take a very passive, hands-off approach then any of the above options could be good options for you.
Foolish takeaway
However, I am somewhat bearish about the ASX index currently due to the large weightings towards banks and resource businesses. At best this will result in a cyclical performance, at worst it could mean lower returns until other companies become larger proportions of the ASX.
Instead, I'd rather invest in high-quality LICs like MFF Capital Investments Ltd (ASX: MFF) or in individual shares.
