The BetaShares Australia 200 ETF (ASX: A200) is one of the biggest exchange-traded funds (ETFs) in Australia. I'd say there are both positives and negatives to considering this investment in the next few weeks.
Share investors have had plenty to get used to in the last couple of months as US President Trump stirs global trade with tariffs on most goods from most countries, with particularly high tariffs on Chinese-made goods.
The A200 ETF has not been immune to that volatility, with the unit price down by 6.5% from 14 February 2025, as the chart below shows.
With elevated global volatility occurring, it's definitely worth looking at this ASX ETF to decide if it's a good time to invest.
Pros for the A200 ETF
One of the constant positives of this fund is the very low annual management cost, it's the lowest-cost Australian shares index ETF available on the ASX or anywhere else in the world. The management fee is just 0.04%.
In a single trade, investors gain diversified exposure to 200 of the largest businesses that are listed on the ASX. Some of the biggest holdings include 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), ANZ Group Holdings Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), Goodman Group (ASX: GMG) and Telstra Group Ltd (ASX: TLS).
A lot of these ASX shares generate a significant portion of their profit from Australia (and New Zealand). I view that as a positive in the current situation because they could be a relatively safe harbour from global trade disruption.
The final benefit of the A200 ETF is the relatively high dividend yield it offers thanks to the dividend yields of its underlying holdings. Australian companies tend to have a fairly high dividend payout ratio so investors can access the franking credits that companies generate when they pay tax. According to Betashares, it has a grossed-up dividend yield of 4.6%, including franking credits.
Negatives
At the moment, I don't think there are too many negatives to considering the A200 ETF, but there are two key points in my mind.
First, Australia doesn't have a lot of trade with the US, so the direct impacts may be minimal. However, if China suffers during the trade war and buys fewer commodities from Australia, that could be a negative for our major miners. But, in that case, I believe there's a good chance China would launch substantial financial stimulus to boost the economy.
Second, the opportunity cost. A 6.5% fall is quite sizeable, but there are plenty of investments that have fallen further that could make better 'buy the dip' opportunities. Globally-focused ASX ETFs such as Vanguard MSCI Index International Shares ETF (ASX: VGS) and Betashares Nasdaq 100 ETF (ASX: NDQ) come to mind.
Overall, I think A200 ETF units could make a good investment right now, but there are other investments that have been hit harder that could be even better.
