The iShares Core S&P/ASX 200 ETF (ASX: IOZ) has gone through a dip in the last few weeks as the global share market has suffered from worries about a trade war between the US and various countries.
As the chart above shows, the IOZ ETF has fallen 7% since 14 February 2025. Other investments have also fallen over the period, but this is still a significant fall for an exchange-traded fund (ETF).
Legendary investor Warren Buffett once said:
Be fearful when others are greedy and greedy when others are fearful.
Is this a good time to be greedy? Below are my thoughts.
Why it's a good time to invest
The IOZ ETF is one of the largest ETFs on the ASX, and it has an annual management fee of 0.05% – it's also one of the cheapest funds on the ASX.
For investors who regularly buy the IOZ ETF, being able to invest at a cheaper price should be appealing. If we're going to buy anyway, we may as well take advantage of the lower valuation. It's certainly possible the fund could fall even further, but I'd suggest it'd be even better value if that happened.
The IOZ ETF gives investors significant exposure to the biggest businesses on the ASX, such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ). If investors want more exposure in their portfolio to ASX blue-chip shares, this fund is an effective way to do it.
Some investors may feel nervous about what's going on with the US and global share markets because of tariffs. However, it's important to recognise that investing at lower prices can help supercharge our wealth. Investing in the local ASX share market could be a good way to bypass some of the trade wars that are happening in the northern hemisphere.
When share prices noticeably fall, I think it's a good time to invest.
Why the IOZ ETF may not be the right investment
There are a lot of choices on the ASX that we can buy. When I think about what looks the best value or what could make the biggest returns in the next three years, the IOZ ETF is not at the top of my list of ideas.
I really like ASX shares, but I'm not expecting big profit growth from large ASX bank shares and ASX mining shares in the next three years. Profit growth is normally what sends share prices higher, and there could be other investments that deliver stronger performance.
A 7% fall is sizeable, but there are other funds that have declined further and could offer stronger rebound potential. For example (at the time of writing), since 14 February 2025, the Global X Fang+ ETF (ASX: FANG) has dropped 14.7% – this fund gives Aussies exposure to 10 of the largest US tech companies like Microsoft, Alphabet, and Amazon. Sometimes the best times to invest for the long term can be a bit uncomfortable, such as during the COVID-19 crash of 2020. Investing in US shares may seem uncomfortable this month (or even this year).
However, the FANG ETF isn't very diversified compared to the IOZ ETF, so I'd view an investment today as an opportunistic addition rather than a core position in our portfolios.
Funds such as the VanEck MSCI International Quality ETF (ASX: QUAL) and the Betashares Global Quality Leaders ETF (ASX: QLTY) have experienced a decline similar to that of the IOZ ETF. However, I believe they possess significantly higher growth potential due to their strong underlying quality metrics and the global growth ambitions of the companies they invest in.
