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.
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.
Some of the highly-rated individual shares on the ASX at the moment include these high flyers.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..
But knowing which blue chips to buy, and when, can be fraught with danger.
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Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.
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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.