Is the BetaShares Australia 200 ETF (ASX: A200) the best ASX focused exchange-traded fund (ETF)?
It might well be based on one of the most important metrics that you can compare different ETFs with.
The BetaShares Australia 200 ETF has an annual management fee of only 0.07% per annum, making it the cheapest way to access ASX shares on the ASX. Even low-cost king Vanguard’s Vanguard Australian Share ETF (ASX: VAS) has a recently-reduced annual management fee of 0.10% per annum.
There really isn’t much difference between 0.07% and 0.10%, but if you had to pick one then the fees could be a deciding factor.
I think there are several other reasons to think that this ETF is a good investment option. It gives you exposure to 200 of the biggest businesses on the ASX with just one investment. I’m sure you recognise many of the top holdings like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).
The ETF also offers a solid potential dividend return due to the high dividend yields of its larger holdings.
An obvious key difference is that you miss out on the ASX 201 to ASX 300 businesses which may deliver more growth, although the dividend yield would be a little lower because of the smaller holdings of the big banks and other large high-yielders.
I think both the BetaShares Australia 200 ETF and the Vanguard Australian Share ETF are worthy investments, but if I had to pick one it would be the Vanguard one because I like the idea of having a little more diversification from my investment. However, I am not bullish about the ASX’s medium-term future based on the current all-time high level.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of National Australia Bank Limited. 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.