The market cap of several companies has a big impact on Australia's benchmark index. 

For context, the S&P/ASX 200 Index (ASX: XJO) is up 2% in 2026. 

This is far below the historical average. 

However some of the biggest ASX companies have outperformed this in 2026. 

Let's see which blue-chips have outperformed the market this year. 

Materials leading the way 

The S&P/ASX 200 Materials (ASX: XMJ) index has far outperformed the ASX 200. 

It has risen by over 20% year to date. 

This has been led by the two largest materials companies: 

• BHP Group Ltd (ASX: BHP) shares have risen 42% year to date
• Rio Tinto Group Ltd (ASX: RIO) shares are up 24%. 

This outperformance has been driven by a broad rally across iron ore, copper, and gold, supported by a weaker US dollar, falling bond yields, and improved sentiment following the Iran peace deal.

Bank shares disappoint 

The big four bank shares have all underperformed this year. 

The best performer has been Commonwealth Bank Of Australia (ASX: CBA) which is essentially flat year to date. 

Meanwhile, the remaining three have all fallen between 3% and 12%. 

Looking outside the big four, a blue-chip bank stock that has performed well has been Macquarie Group Ltd (ASX: MQG), which is up 24% for the year to date. 

Another blue-chip stock that has performed well (outside of banking) has been Wesfarmers Ltd (ASX: WES). 

Its defensive profile has held up well amidst broader market headwinds. 

How to avoid over concentration 

While these companies dominate the ASX 200, there is also a risk that investors become overconcentrated on just a few companies. 

Many investors could end up overly exposed to banks or miners without realising, by owning individual stocks as well as ASX ETFs that are heavily weighted towards the same shares. 

In case you are unaware, the big four banks and BHP account for over 32% of the entire ASX 200. 

One way to avoid this is with an equal weighted ASX ETF such as the VanEck Vectors Australian Equal Weight ETF (ASX: MVW).

It provides a more balanced and diversified approach to the Aussie market. 

It aims for true diversification by equally weighting across companies and reducing sector concentration.

MVW has less exposure to the mega-caps that dominate the S&P/ASX 200 Index compared to many Australian equity portfolios. MVW is underweight mega cap companies and overweight those large companies outside the mega-caps. Relative to the S&P/ASX 200, MVW has a higher weighting to stocks outside the top 15.

The post Which Aussie blue-chip stock is the best performer so far in 2026? appeared first on The Motley Fool Australia.

While markets may remain volatile, ASX exchange traded funds (ETFs) can offer a simple way to stay invested without relying on a single company to perform.

They can also provide diversification, exposure to long-term themes, and a clear investment strategy in one trade.

Here are three excellent ASX ETFs that could be worth watching closely in June.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The first ASX ETF to watch is the Betashares Global Quality Leaders ETF.

This fund is built around companies with strong financial characteristics. That means businesses with healthy profitability, solid balance sheets, and the ability to generate attractive returns on capital.

That can be a useful approach in uncertain markets. When conditions become tougher, financially strong companies usually have more room to keep investing, protect margins, and defend their market positions.

The fund is not trying to chase every fast-growing company in the world. It is more selective than that. It gives investors exposure to global businesses that have already demonstrated a level of durability.

This could make it useful for someone who wants international growth exposure, but with a quality filter doing part of the work.

VanEck Australian Equal Weight ETF (ASX: MVW)

Another ASX ETF that could be worth watching is the VanEck Australian Equal Weight ETF.

Most Australian share market funds are heavily influenced by the biggest banks and miners. That can be fine when those sectors are performing well, but it also means investors may end up with more concentration than they realise.

This fund takes a different approach by giving companies a more equal weighting. That changes the shape of the exposure and reduces the dominance of the largest names.

It can also give more room for mid-sized companies to influence returns. These businesses may not always make the headlines, but some can have stronger growth profiles than the market's biggest incumbents.

The fund will still move with the Australian share market. But its structure gives investors a different way to own local shares without relying so heavily on the usual giants.

BetaShares India Quality ETF (ASX: IIND)

A third ASX ETF to watch in June is the BetaShares India Quality ETF.

India has become one of the most closely watched growth markets in the world, supported by a large population, rising incomes, expanding digital adoption, and increasing economic influence.

This fund focuses on Indian companies with strong quality characteristics, rather than simply chasing the biggest businesses in the market. That can help investors gain exposure to long-term growth trends while still applying a quality filter.

Emerging markets can be volatile, and investors should expect periods of sharp market swings. But for those wanting exposure to one of the world's fastest-growing major economies, this ETF could add an interesting international growth angle to a portfolio.

The post 3 excellent ASX ETFs to watch in June appeared first on The Motley Fool Australia.

It includes the 200 largest companies in Australia weighted by market capitalisation. 

Many investors have a portion of their portfolio dedicated to an ASX ETF that tracks the performance of this index. 

However, many investors might not be aware of concentration risk. 

Concentration: the case against traditional funds 

Some investors may be unaware that the ASX 200 index is weighted towards just a couple of holdings and sectors because it is market capitalisation based.

A small number of very large companies – especially banks like Commonwealth Bank Of Australia (ASX: CBA) and miners like BHP Group (ASX: BHP) – make up a disproportionately large share of the index due to market-cap weighting. 

This means the performance of the "Australian market" is often driven more by a handful of companies than by the broader Australian economy.

A recent report from VanEck highlights this issue.

Investors buying a diversified Australian equity strategy would think it is unlikely that two stocks would be 22% of the portfolio, nor would they think two sectors represent over 50% of the portfolio. This is a risk: Concentration risk.

Nothing highlighted this more than the post-budget fall of CBA. Australia's 2nd largest company fell by over 10% on Wednesday.

So how do investors combat this? 

There are several ASX ETFs that use unique strategies to provide a more balanced profile of the ASX 200. 

Here are three options to consider. 

VanEck Australian Equal Weight ETF (ASX: MVW)

This ASX ETF includes only the largest and most liquid companies on ASX.

It currently includes 76 equally weighted stocks, that are rebalanced on a quarterly basis.

Due to the MVW Index's equal weight construction methodology, at the last rebalance, no company was more than 1.3%. Therefore, MVW, which tracks this index has less stock concentration risk than the ASX 200.

BetaShares Ftse Rafi Australia 200 ETF (ASX: QOZ)

QOZ ETF is another option to target the ASX 200.

It tracks the performance an index that comprises the top 200 companies listed on the ASX. However they are measured by fundamental size.

QOZ is weighted in a way that is reflective of the economic importance rather than the market capitalisation of its constituents.

Constituent weighting is based on accounting values and is known as "Fundamental indexing".

BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20)

Many portfolios having a heavy bias towards the big banks and miners. However, EX20 helps diversify exposure away from those stocks and sectors.

It aims to track the performance of an index comprising the 180 largest stocks listed on the ASX, after excluding the 20 largest, based on their market capitalisation.

The post Three unique ASX ETFs to target the ASX 200  appeared first on The Motley Fool Australia.

But don't let that put you off, even if you don't like picking stocks.

That's because exchange traded funds (ETFs) offer an easy way to put the money to work in the share market. They provide diversification, access to long-term themes, and a clear structure without requiring constant management.

Here are three ASX ETFs to consider for the $20,000.

BetaShares Global Defence ETF (ASX: ARMR)

The first ASX ETF to consider is the BetaShares Global Defence ETF.

This ETF provides investors with exposure to companies involved in the global defence sector. It includes businesses linked to military equipment, cybersecurity, and defence technology, including our very own DroneShield Ltd (ASX: DRO).

Spending in this area has been increasing as governments respond to shifting geopolitical conditions. That trend has supported long-term demand for defence-related products and services.

For investors, the BetaShares Global Defence ETF offers a way to access this theme without needing to identify individual international companies.

This fund was recently recommended by analysts at Betashares.

Global X Battery Tech & Lithium ETF (ASX: ACDC)

Another ASX ETF to consider is the Global X Battery Tech & Lithium ETF.

This ETF is built around the global transition to electrification. It holds companies involved in lithium mining, battery production, and electric vehicle supply chains. This includes Tesla (NASDAQ: TSLA) and Pilbara Minerals Ltd (ASX: PLS).

Demand for battery technology continues to grow as industries move toward cleaner energy and transportation solutions. This creates a broad opportunity set across both resource producers and technology companies.

The Global X Battery Tech & Lithium ETF provides exposure to that ecosystem in a single investment. It allows investors to participate in the long-term shift without needing to pick individual winners in a rapidly evolving space. It was recently recommended by Global X.

VanEck Australian Equal Weight ETF (ASX: MVW)

A final ASX ETF to consider for the $20,000 is the VanEck Australian Equal Weight ETF.

This ETF takes a different approach to investing in the Australian market. Instead of weighting companies by size, it gives each holding an equal allocation. This reduces the heavy concentration in large banks and major resource companies that is common in traditional indices.

The result is a more balanced exposure across sectors and companies, without one area dominating the portfolio.

This structure can also create opportunities. In periods of rising interest rates, equal weight strategies have historically outperformed the broader market. There is also greater exposure to companies outside the largest names, which may present opportunities at current valuations.

It was recently recommended by analysts at VanEck.

The post Where to invest $20,000 in ASX ETFs right now appeared first on The Motley Fool Australia.

The ongoing conflict in the Middle East has weighed heavily on global equities. 

Here in Australia, the benchmark S&P/ASX 200 Index (ASX: XJO) is down approximately 2.6% since the beginning of March. 

You might be scratching your head, wondering what strategies can help weather the storm. 

A new report from VanEck has shed light on the resilience of HALO investing this past month. 

What is HALO investing?

HALO stands for Heavy Assets, Low Obsolescence. 

According to VanEck, these are companies that have cash flows tied to essential real-world demand. This is supported by long-lived infrastructure, regulated frameworks, and long-term contracts.

Applied to the Australian market, the HALO universe spans mining, energy, infrastructure, utilities, transport, telecommunications, staples, and logistics. The ASX 200's exposure to these names is heavily concentrated in a small number of mega-cap miners.

Therefore, we think, the problem for many investors is that they are not getting enough meaningful exposure to all the HALO companies via funds that track or are benchmarked to the S&P/ASX 200.

How to benefit from HALO with this ASX ETF

According to the VanEck report, an equal-weighted approach could reduce concentration and provide more meaningful exposure to these HALO companies. 

One ASX ETF that provides this meaningful exposure is the VanEck Vectors Australian Equal Weight ETF (ASX: MVW).

It utilises an equal weight approach, which provides a larger exposure to these HALO companies.

HALO companies share a common characteristic: their competitive advantages are rooted in physical assets that are difficult, expensive or impossible to replicate. 

These include pipelines, toll roads, rail networks, power stations, mine sites, ports, fibre networks and distribution centres. The assets are essential to the functioning of the economy, supported by long-duration contracts or regulatory frameworks. They generate cash flows that are relatively insulated from technological disruption.

Over the last month, this strategy and focus have resulted in a nearly 3% rise for the MVW ASX ETF, outperforming the ASX 200. 

The strategic approach

This ASX ETF uses a HALO-style approach by tilting its holdings toward companies with hard, essential assets and more stable, predictable cash flows. 

While the ASX 200 appears to have greater overall exposure to HALO names, much of that exposure is concentrated in large mining companies such as BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). These have earnings heavily tied to volatile commodity prices rather than steady, contracted revenues.

Because MVW weights companies more evenly, it reduces the dominance of these cyclical miners. Simultaneously, it increases its allocation to a broader mix of infrastructure, utilities, energy networks, telecommunications, and consumer staples businesses. 

As a result, once the large miners are excluded, MVW actually has greater exposure to the types of companies that better reflect the HALO concept.

According to the report, this ASX ETF provides 1.4x overweight compared to the ASX 200 to the HALO names with contracted revenues, regulated cash flows, and essential demand characteristics.

The macro environment that supported MVW's outperformance in March 2026 has not resolved. Oil prices remain elevated on geopolitical risk, the RBA has signalled rates will stay higher for longer and household budgets are under pressure.

In this environment, companies with contracted, inflation-linked revenues and essential demand characteristics are better positioned to protect margins than those exposed to discretionary spending, credit cycles, or technological disruption, we think.

The post Why this HALO focused ASX ETF outperformed over the last month appeared first on The Motley Fool Australia.

Tracking indexes like the S&P/ASX 200 Index (ASX: XJO) or S&P 500 Index (SP: .INX) is a great foundation for a portfolio. 

However it's important for investors to understand how concentrated the ASX 200 is to just a handful of companies. 

The most concentrated share market in the world

A new report from VanEck has shed light on how the ASX 200 differs from other global benchmarks. 

In fact, the ASX 200 is one of the most concentrated developed-market indices on the planet.

According to VanEck, the top 5 securities account for 32.73% of the S&P/ASX 200 Index:

• BHP Group Ltd (ASX: BHP) represents 9.53%. 
• Commonwealth Bank of Australia (ASX: CBA) 9.27%
• National Australia Bank Ltd (ASX: NAB) 4.93%
• Westpac Banking Corp (ASX: WBC) 4.93%
• ANZ Group Holdings Ltd (ASX: ANZ) 4.06%. 

The Australian share market is structurally overweight materials and financials, and structurally underweight technology and global growth.

If you own the index, you own the concentration. We're not saying, don't own the banks, we're saying, it's worth pondering if it warrants such a large allocation.

A solution for managing concentration risk

There are ASX ETFs that aim to provide a direct return of the ASX 200 and along with it, an overweight towards banks and materials.

Some investors will be content with tracking the ASX 200 at its current weighting. 

VanEck contends that an alternative to this strategy is the VanEck Vectors Australian Equal Weight ETF (ASX: MVW). 

As the name suggests, it aims for true diversification by equally weighting across companies and reducing sector concentration.

MVW has less exposure to the mega-caps that dominate the S&P/ASX 200 Index compared to many Australian equity portfolios. MVW is underweight mega cap companies and overweight those large companies outside the mega-caps. Relative to the S&P/ASX 200, MVW has a higher weighting to stocks outside the top 15.

What's in the fund?

At the time of writing, it is made up of 76 holdings, with no individual holding representing more than 1.6% of the total fund. 

By sector, its largest allocation is to: 

• Materials (20.1%)
• Financials (18.7%)
• Industrials (16.3%). 

VanEck argues this can provide resilience across various market cycles, avoiding concentration risk inherent in traditional market cap indices. 

For investors focused on long-term stability and enhanced diversification, MVW's equal-weighted approach offers a compelling alternative for core Australian equities.

The post How to avoid an over concentrated portfolio with one ASX ETF appeared first on The Motley Fool Australia.

But, being the biggest doesn't necessarily mean it's the best choice for Aussie investors.

Vanguard is one of the world's best ETF providers, in my opinion. It wants to offer investors investment funds that give exposure to shares (and bonds) with very low fees.

There are a number of good reasons to want to invest in the VAS ETF, such as its low fees, the diversification on offer and a solid dividend yield. But, depending on why Aussies are picking the Vanguard offering, there are other options that could fit the bill even better.

Fees

Arguably, the most appealing aspect of the Vanguard Australian Shares Index ETF is that its annual management fee is just 0.07% per year. That's close to nothing!

Low costs are great because it means more of the returns and fund value are left in the hands of the investor. There are no performance fees either.

While the VAS ETF is one of the cheapest options on the ASX, there is an even cheaper option: BetaShares Australia 200 ETF (ASX: A200). The BetaShares offering has an annual fee of just 0.04%, which is even closer to nothing.

Interestingly, at the time of writing, the A200 ETF's return has slightly outperformed the VAS ETF over the last three years and five years. Of course, past outperformance doesn't mean it'll continue.

Diversification

Another positive characteristic of the VAS ETF is its diversification.

The Vanguard fund owns 300 businesses because it tracks the S&P/ASX 300 Index (ASX: XKO), an index of 300 of the largest companies on the ASX. That's seemingly a good level of diversification.

It owns names like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES), CSL Ltd (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Goodman Group (ASX: GMG) and Telstra Group Ltd (ASX: TLS).

However, the largest businesses have a very big weighting on the ASX, making it seem less diversified than it looks.

Those ten names I mentioned above account for around 44% of the VAS ETF portfolio and the other 290 names make up the other 56%.

Additionally, around 54% of VAS ETF is invested in just ASX financial shares and ASX mining shares. Ideally, it'd be useful if other sectors had a larger allocation.

VanEck Australian Equal Weight ETF (ASX: MVW), as the name of suggests, owns a portfolio of names that it aims to provide investors with an equal weighting to. It's not strongly exposed to any single ASX share or sector.

The MVW is currently invested in 72 names such as Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), South32 Ltd (ASX: S32), Whitehaven Coal Ltd (ASX: WHC), Reece Ltd (ASX: REH) and Orica Ltd (ASX: ORI).

The VAS ETF is not as diversified as it could be. I'm not suggesting to replace the VAS ETF with the MVW ETF, but they could work well together to reduce the exposure to a few large businesses.

Dividend yield

One advantage of ASX blue-chip shares over international shares is their typically higher dividend yield. According to Vanguard, the VAS ETF has a dividend yield of 3.1%, with franking credits a bonus on top of that yield.

But, there's a Vanguard offering that tries to provide investors with an even higher dividend yield. The Vanguard Australian Shares High Yield ETF (ASX: VHY) invests in businesses that have higher forecast dividends compared to other ASX shares.

The VHY ETF has a dividend yield of 4.3% excluding franking credits and 5.8% including franking credits, which is noticeably stronger than the VAS ETF. So, the high-yield option could be a better idea for income-focused investors.

Overall, the VAS ETF is still a very effective option for Australians and has positive aspects. But, I think it's useful to assess whether there's an even more appealing option, depending on someone's objectives.

The post Is the Vanguard Australian Shares Index ETF (VAS) the best way to invest in ASX shares? appeared first on The Motley Fool Australia.

However, this isn't the whole story. There are two key factors to consider. 

Weighted by market capitalisation 

Firstly, while it's true that the BetaShares Australia 200 ETF contains 200 holdings, they are not equally weighted. Rather, they are weighted by market capitalisation, which means larger companies are given the biggest representation. 

Recently, concentration has magnified, with Australia's largest companies becoming even bigger. For example, Commonwealth Bank of Australia (ASX: CBA) now represents around 12% of the index. 

A material decline in CBA's share price would significantly impact the A200 ETF. With Macquarie Group Ltd (ASX: MQG) placing a price target of $105 on the stock, a sharp decline over the next 12 months is certainly plausible. A200 ETF investors should keep this in mind.

Sector representation

Secondly, certain sectors are overrepresented in the ASX 200, while others are underrepresented. 

Most notably, the financial and mining sectors are overrepresented. As of 20 May 2025, the financial sector made up 35% of the A200 ETF, with the big four banks accounting for 25%. Meanwhile, the technology sector accounts for less than 5% of the A200 ETF.

How to improve diversification?

Given these conditions, A200 ETF investors may be wondering how to improve diversification. 

Firstly, they could sell down a portion of their holdings to buy individual underrepresented stocks. For example, The Motley Fool's James Mickleboro recently suggested that Life360 Inc (ASX: 360) could be tipped for a big year in FY26. Morgan Stanley currently has an overweight rating and a $40.00 price target on its shares. Yesterday, they closed at $33.59, suggesting a 19% upside from here.

Of course, ASX investors could also buy US-listed technology shares. Of the Magnificent 7 stocks, Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is currently the most attractively valued, with a price-to-earnings (P/E) ratio of around 20. Buying international shares would also provide the added benefit of geographical diversification.  

Another option is to consider an equally weighted ETF such as the VanEck Australian Equal Weight ETF (ASX: MVW). For a management expense of 0.35%, it contains 74 of Australia's largest and most liquid companies. 

As the name suggests, its allocations are equally weighted. So, while it does hold the big 4 banks, they are weighted the same as the 70 other holdings. Should CBA shares come crashing down, the MVW ETF will be significantly less affected than the A200 ETF.

The post Why A200 ETF isn't as diversified as you might think appeared first on The Motley Fool Australia.

The majority of ASX index exchange traded funds (ETFs) are capitalisation weighted. This means their weightings match the indices they aim to replicate. 

For example, Betashares Australia 200 ETF (ASX: A200), which aims to replicate the S&P/ASX 200 Index (ASX: XJO), is heavily concentrated in the banking and mining sectors. As of 2 May 2025, its top 5 holdings are Commonwealth Bank of Australia (ASX: CBA) (11.5%), BHP Group (ASX: BHP) (7.5%), CSL Ltd (ASX: CSL) (5.1%), Westpac Banking Corp (ASX: WBC) (4.8%) and National Australia Bank (ASX: NAB) (4.6%). 

While A200 had a strong past month, rising 7.5%, forward returns could be less impressive. 

This is mainly due to the valuation of the banking sector.

Last week, The Motley Fool's Bronwyn Allen covered Macquarie's view that the big 4 banks are on 'borrowed time'. According to Macquarie, ASX bank shares have outperformed recently due to investors viewing them as safe haven investments. However, rate cuts, weaker consumer demand, and global volatility may negatively impact profitability and reduce returns on equity (ROE).

Macquarie had flagged CBA shares as particularly overvalued. CBA shares are currently trading on a price-to-earnings ratio (PE) of 28x compared to Westpac 17x, NAB 16x, and ANZ 14x.

Other popular capitalisation weighted ASX ETFs, such as Vanguard Australian Shares Index ETF (ASX: VAS), also have large allocations to the banking sector. 

As a result, investors may be looking to invest in diversified ASX ETFs with lower banking exposure.

VanEck Australian Equal Weight ETF (ASX: MVW)

VanEck Australian Equal Weight ETF could be a great option for investors to consider today. It is sufficiently diversified, containing 74 of Australia's largest and most liquid companies. Its management fee is modest at 0.35%, and it pays a distribution semi-annually.

As the name suggests, its allocations are equally weighted. This means that, while it does hold the big 4 banks, they are weighted the same as the 70 other holdings. Should the banking sector experience a sell off, MVW ETF will be significantly less affected than capitalisation weighted ETFs such as A200 ETF.

Foolish Takeaway

For the year to date, MVW has outperformed the S&P/ASX 200 Index. It has risen 2.7% compared to the index, which is up just 0.5%. Over a 5 year period, it is (only just) behind, returning 52.7% compared to 52.8% for the index. However, MVW ETF could be primed for sizeable outperformance in 2025, with banking sector valuations looking especially steep.

The post Why VanEck Australian Equal Weight ETF could be a top performing ASX ETF in 2025 appeared first on The Motley Fool Australia.

If you've been looking to add to your portfolio and waiting for the right moment, you might be kicking yourself for not diving in sooner.

Now, with last year's gains in the rearview mirror, you may be wondering if it's worth holding off in the hopes of securing a better entry point before buying more shares.

While a 9% gain is certainly worth celebrating, it's important to remember that, over the past 24 years, the ASX 200 has delivered average returns of 8.2% per annum. In fact, only five of those 24 years have ended in the red for the Aussie market.

Could the market dip from here? Absolutely! But, looking at the big picture, short-term volatility is a small price to pay for such robust long-term gains.

Plus, time spent on the sidelines can also result in missed opportunities and lost profits.

So, if you're looking to add new holdings to your portfolio in 2025, it's quite possible there's no better time than right now!

On that note, we asked Foolish writers which ASX shares they think make top buying in January.

Here is what they told us:

6 top ASX shares for January 2025 (smallest to largest)

• VanEck Australian Equal Weight ETF (ASX: MVW), $2.59 billion
• Tuas Ltd (ASX: TUA), $2.96 billion
• Codan Ltd (ASX: CDA), $2.97 billion
• Northern Star Resources Ltd (ASX: NST), $17.89 billion
• Pro Medicus Limited (ASX: PME), $26.93 billion
• WiseTech Global Ltd (ASX: WTC), $41.14 billion

(Market capitalisations as of market close 31 December 2024)

Why our Fool writers love these ASX stocks

VanEck Australian Equal Weight ETF

What it does: This ASX exchange-traded fund (ETF) is an index fund with a twist. It holds the largest 200 stocks on the ASX in equal proportions.

By Sebastian Bowen: I'm a big fan of traditional ASX index funds. However, with the largest holdings in the ASX 200 (namely the big four banks) rocketing in valuation over 2024 despite stagnant earnings, I have grown concerned with the prudence of investing in these traditional funds right now.

Instead, a better option to consider this January might be the VanEck Equal Weight ETF. 

Unlike a traditional index fund, MVW allocates each of the largest stocks in our market an equal weighting in its portfolio instead of the market capitalisation-weighting we would typically see.

This means that everything from the Commonwealth Bank of Australia (ASX: CBA) to Ampol Ltd (ASX: ALD) gets the same allocation. As mentioned, this is a vastly different approach to a market capitalisation-weighted index fund, which normally sees the big four banks get around 25 cents of every dollar (with CBA alone worth around 11 cents of each dollar at present).

I think MVW's equal-weight approach might well do better over the coming years than a traditional index fund, thus making it a great idea to consider as we start 2025.

Motley Fool contributor Sebastian Bowen does not own units of the VanEck Australian Equal Weight ETF.

Tuas Ltd

What it does: Tuas is a Singaporean telecommunications business listed on the ASX. It was founded by David Teoh, the man who helped TPG Telecom Ltd (ASX: TPG) grow into a major player in Australia before its merger with Vodafone Australia.

By Tristan Harrison: I'm bullish about the long-term future of Tuas for many reasons.

First, it's growing mobile subscribers at a decent pace. At the end of the first quarter of FY25, Tuas had reached 1.11 million subscribers, representing an increase of 26.6% year over year and a rise of 5.7% quarter over quarter. Its low-cost offering could also continue to attract new subscribers.

Second, I'm excited by the company's potential to grow in the broadband space. As of the end of November 2024, Tuas had more than 10,000 broadband subscribers, and this number could significantly increase in the coming years.

Third, the ASX telco is rapidly growing revenue – in FY24, revenue rose by 36%. Furthermore, I believe revenue growth will closely follow the company's strong subscriber growth.

Fourth, Tuas is seeing good profit margin growth, which means it should be able to grow profit faster than revenue. In FY24, the company's operating profit (EBITDA) margin improved to 42%, up from 36%.

Finally, the company may, over time, expand to other Asian countries, such as Indonesia and Malaysia, which have much larger populations than Singapore, potentially delivering a further boost to subscriber and revenue growth.

Motley Fool contributor Tristan Harrison owns shares of Tuas Ltd and does not own shares of TPG Telecom Ltd. 

Codan Ltd

What it does: Codan flaunts deep expertise in radio-based communications. The company's electronics prowess powers three product pillars: tactical communications, critical communications, and metal detection.  

By Mitchell Lawler: Codan receives little attention despite its instrumental role in public safety, military capability, and recreational metal detecting. What started as a high-frequency radio equipment manufacturer 65 years ago has become a comms powerhouse.

After numerous acquisitions, Codan now generates 59% of its revenue from products used by the military, law enforcement, and public safety. From my perspective, the advantage here is the sticky and permeable nature of communications in these markets. Government customers want simplicity and reliability, which lends itself to a single provider and long relationships. 

The company's shares aren't as cheap as they once were. However, I suspect we'll begin to see operating leverage in Codan's consolidated solutions over the next few years, which could see earnings exceed revenue growth.

Motley Fool contributor Mitchell Lawler does not own shares of Codan Ltd.

Northern Star Resources Ltd

What it does: Northern Star is one of the world's top 10 gold producers. The miner has three production centres and operations in Western Australia and the US state of Alaska.

By Bernd Struben: Northern Star shares gained 13% in 2024 amid a rising gold price. The ASX 200 gold miner also paid 40 cents per share in unfranked dividends.

I think Northern Star can keep outperforming and increase its dividends in 2025, in part based on potentially higher gold prices. CBA analysts are forecasting gold prices will average US$3,000 per ounce (AU$4,722/oz) in the fourth quarter of 2025, up from US$2,653 today.

In September, Northern Star provided FY 2025 guidance of 1.65 million to 1.80 million ounces of gold sold at an all-in sustaining cost (AISC) of AU$1,850 to AU$2,100 per ounce (less than half CBA's forecast spot gold price for Q4).

I also like the look of the balance sheet, which shows Northern Star holding cash and bullion worth AU$998 million as of 30 September.

And if Northern Star's AU$5 billion acquisition of gold miner De Grey Mining Limited (ASX: DEG) goes through, it will own De Grey's low-cost, long-life, and large-scale Hemi project in Western Australia.

Forecast gold production from Hemi stands at 530,000 ounces per year over its first 10 years.

Motley Fool contributor Bernd Struben does not own shares of Northern Star Resources Ltd.

Pro Medicus Limited

What it does: Pro Medicus is a leading healthcare informatics company. It provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups worldwide. 

By James Mickleboro: I think Pro Medicus could be a great option for investors in January. It was among the best performers on the ASX 200 in 2024, but I don't believe it is too late to invest. Far from it!

This health imaging technology company appears well-positioned to grow at an explosive rate for many years to come. This is thanks to its Visage 7 platform, which is the clear market leader.

A testament to this is the massive contracts the company continues to win from some of the most respected players in the healthcare sector. This includes November's $330 million, 10-year contract with Trinity Health, which is one of the largest not-for-profit healthcare systems in the United States.

Even after winning this contract, management stated that its "pipeline remains strong and spans all market segments." In addition, Pro Medicus is expanding into adjacent solutions, including artificial intelligence (AI) and cardiology, which could both deliver significant upsides in the future.

Morgan Stanley is very bullish on the company. So much so that last month, it initiated coverage with an overweight rating and a $300.00 price target on Pro Medicus shares.

Motley Fool contributor James Mickleboro owns shares of Pro Medicus Limited.

WiseTech Global Ltd

What it does: WiseTech is a logistics software company that works with major logistics players in the freight forwarding and cargo transport industries.

By Zach Bristow: Wisetech shares wobbled throughout October and November of 2024 as founder and former CEO Richard White caught a number of headlines for personal conduct outside of the business. 

After a sharp drop in early October, Wisetech shares recovered to a 52-week high of $141.61 during intraday trading on 21 November. However, they have since retreated to $121 apiece at the time of writing.

In my opinion, this pullback provides an excellent opportunity to own a high-quality stock at an attractive starting value. 

WiseTech's earnings have grown by 34% per year, on average, since FY18, hitting 81 cents per share in FY24. UBS projects this growth to continue for the next five years, with the broker forecasting WiseTech's profits to grow by 36% per year out to FY29.

Meanwhile, according to CommSec, the consensus of analyst estimates projects 33% earnings growth over the next two years.

With the company's internal issues now seemingly sorted, its growing market position, and these growth numbers in mind, I believe WiseTech is primed for a good year in 2025.

Motley Fool contributor Zach Bristow does not own shares of WiseTech Global Ltd.

The post Top ASX shares to buy in January 2025 appeared first on The Motley Fool Australia.

Aussies have solid ASX ETF choices, like the Vanguard Australian Shares Index ETF (ASX: VAS) or the BetaShares Australia 200 ETF (ASX: A200), which are understandably popular. These ETFs can provide exposure to 200 or 300 of the biggest businesses on the ASX for a very low cost.

However, while they own plenty of businesses, those ASX ETFs are weighted towards just two sectors: ASX bank shares and ASX mining shares.

On top of that, the major positions in the portfolio make up a lot of the overall portfolio. In the VAS ETF, just ten positions account for close to half of the overall portfolio value:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• CSL Ltd (ASX: CSL)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Macquarie Group Ltd (ASX: MQG)
• Wesfarmers Ltd (ASX: WES)
• Goodman Group (ASX: GMG)
• Rio Tinto Ltd (ASX: RIO)

So, what are Aussies meant to do if they want ASX share diversification but don't want heavy exposure to banks and miners? This is where the VanEck Australian Equal Weight ETF comes in.

Equal-weighted exposure

The MVW ETF invests in the largest Australian listed companies, but it's a portfolio with equal weighting across companies and reduced sector concentration.

It currently has 72 holdings. To be included in the portfolio, these companies must generate 50% of revenue (or have 50% of their assets) in Australia, have a market capitalisation of more than US$150 million, have a three-month average daily trading volume of at least US$1 million, and there must be at least 250,000 securities traded per month. In other words, it needs to have adequate liquidity – investors need to be able to trade it efficiently.  

It's rebalanced quarterly, so every three months, the ASX ETF's holdings are returned to the same allocation per stock.

All positions are equally as important, so I'll pick out some of the current largest and smallest positions in the portfolio as examples: Evolution Mining Ltd (ASX: EVN), South32 Ltd (ASX: S32), Pro Medicus Ltd (ASX: PME), Qantas Airways Limited (ASX: QAN), REA Group Ltd (ASX: REA), SEEK Ltd (ASX: SEK), Aristocrat Leisure Limited (ASX: ALL), Reece Ltd (ASX: REH), JB Hi-Fi Ltd (ASX: JBH) and Medibank Private Ltd (ASX: MPL).

Good dividends

Some investors may be concerned about missing out on the passive income from VAS ETF or A200 ETF. VanEck Australian Equal Weight ETF is an option for dividends, too.

Looking at the dividends paid over the prior 12 months, the MVW ETF had a dividend yield of 4.2% as at 30 September 2024, according to VanEck. The distributions from this ASX ETF are partially franked, so the grossed-up dividend yield is over 5%.

Reasonable fees

The VanEck Australian Equal Weight ETF has an annual management fee of 0.35%, which I think is fair. Investors are paying a little more for this fund than the A200 ETF or VAS ETF.

Returns

While improved diversification is the key goal, the MVW ETF has performed well for investors since its start on 4 March 2014, achieving an average annual return of 9.55%. That compares to an average annual return of 8.48% for the S&P/ASX 200 Index (ASX: XJO) over the same time period.

I think this equally-weighted fund makes a lot of sense as long as the ASX share market remains weighted to banks and miners.

The post Why this $2.5 billion ASX ETF could be a top buy for diversification appeared first on The Motley Fool Australia.

One of the best reasons to own ETFs is the diversification they can provide. They give us the best opportunity to buy a group of companies in a single investment. And owning more companies spreads out the risks of things going wrong with a particular stock.

The A200 ETF invests in 200 of the biggest businesses on the ASX. It is the cheapest ETF focused on ASX shares, with an annual management fee of 0.04%.

That sounds like a wonderful way to gain access to a diversified portfolio of ASX shares.

Which ASX shares does the A200 ETF own?

There are 11 positions in the portfolio with a weighting of at least 2%. They include:

• Commonwealth Bank of Australia (ASX: CBA) – 9.8% of the portfolio
• BHP Group Ltd (ASX: BHP) – 8.7%
• CSL Ltd (ASX: CSL) – 6.4%
• National Australia Bank Ltd (ASX: NAB) – 4.9%
• Westpac Banking Corp (ASX: WBC) – 4.4%
• ANZ Group Holdings Ltd (ASX: ANZ) – 3.8%
• Wesfarmers Ltd (ASX: WES) – 3.7%
• Macquarie Group Ltd (ASX: MQG) – 3.4%
• Goodman Group (ASX: GMG) – 2.5%
• Woodside Energy Group Ltd (ASX: WDS) – 2%
• Telstra Group Ltd (ASX: TLS) – 2%

That list has a decent mix of ASX blue-chip shares, though it's clear that there are more ASX bank shares than other sectors.

Sector weightings

The ASX has a different sector makeup from other share markets. The US share market, for example, is heavily weighted towards technology businesses, while the ASX is dominated by mining and bank shares.

Similarly, I think the A200 ETF portfolio represents the Australian economy with its industry allocations. At the end of July 2024, these were the sector weightings:

• Financials (32.6%)
• Materials (19.7%)
• Healthcare (10.2%)
• Consumer discretionary (7.4%)
• Real estate (6.8%)
• Industrials (6.7%)
• Energy (5%)
• Consumer staples (4%)
• Communication services (3.6%)
• Other (4%)

As you can see, ASX financial shares and ASX mining shares alone made up over 52% of the portfolio. So, more than half of the portfolio is focused on mining (largely iron ore) and banks (which predominately lend to Australian and New Zealand households for mortgages).

Owning the A200 ETF enables better diversification than owning a few individual ASX blue-chip shares. However, it may not be the best choice for diversification on the ASX.

Another option

One competitor that comes to mind is the VanEck Australian Equal Weight ETF (ASX: MVW). While it doesn't own as many holdings, with 73 positions, its holdings are equally weighted across the companies to reduce sector concentration.

When the portfolio is rebalanced every quarter, every position such as JB Hi-Fi Ltd (ASX: JBH), WiseTech Global Ltd (ASX: WTC), Brambles Ltd (ASX: BXB) and REA Group Ltd (ASX: REA) have the same weighting as CBA, CSL and NAB. For diversification purposes, I think the MVW ETF might be a better choice.

The post Is the BetaShares Australia 200 ETF (A200) the best option for ASX diversification? appeared first on The Motley Fool Australia.

The VAS ETF is certainly a good choice for investors who want a cheap management fee at just 0.07% per annum.

And when it comes to the number of different shares owned, the Vanguard Australian Shares Index ETF seems impressive, with 300 holdings.

However, it may not be as diversified as it appears.

Portfolio concentration

According to Vanguard, only two sectors account for more than 50% of the overall portfolio. At June 2024, ASX financial shares comprised 31.1% of the portfolio and ASX mining shares were 20.8%.

Not only is it concentrated on just two sectors, but the biggest businesses account for a lot of the portfolio.

BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES) and Macquarie Group Ltd (ASX: MQG) account for 42.3%. That's just eight ASX shares accounting for more than 40% of the portfolio.

There's nothing particularly wrong with that, but if investors are buying Vanguard Australian Shares Index ETF with diversification as the number one criterion, there could be a better option.

VanEck Australian Equal Weight ETF (ASX: MVW)

An alternative to consider for ASX diversification is the MVW ETF. Instead of deciding its allocation on the market capitalisation size of each business, this fund is equally weighted between its 74 holdings.

It's rebalanced quarterly to ensure that the positions stay equally weighted.  

To be included in the index, a company's market cap needs to exceed US$150 million, the three-month average daily trading volume must be at least US$1 million, and the number of securities traded per month must be at least 250,000.

At the moment, the fund's three biggest positions are Steadfast Group Ltd (ASX: SDF), Aristocrat Leisure Limited (ASX: ALL) and CSL. The smallest positions are currently IGO Ltd (ASX: IGO), Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Ltd (ASX: MIN). However, the only reason there are larger and smaller positions is just the recent performance. They'll be equal-weighted again soon enough. The biggest weighting is 1.54%, and the smallest is 1.16%.

The MVW ETF has returned an average of 9.1% per annum over the past 10 years, while the VAS ETF has returned an average of 8% over the past 10 years.

As MVW ETF is weighted more toward smaller businesses, which can have greater return potential, I think the MVW ETF could outperform the Vanguard Australian Shares Index ETF.

The post Is Vanguard Australian Shares Index ETF (VAS) the best option for ASX diversification? appeared first on The Motley Fool Australia.

ASX ETFs are more sensitive than most ASX shares to the financial calendar. Most of these funds pay out dividend distributions every quarter rather than the six-month interval that is normally the standard for ASX shares. These quarterly dividend distributions are typically aligned with the four quarters of the financial year.

As it happens, today is the first day of the 2025 financial year. And as such, we've heard from dozens of ASX ETFs today regarding their next dividend distribution. Many are also trading ex-dividend for said distributions this Monday.

Take the iShares S&P 500 ETF (ASX: IVV). Earlier this afternoon, we discussed the IVV ETF and its latest quarterly dividend distribution, which has just been announced. Investors in this index fund will enjoy a distribution next week on 11 July.

We learned that this dividend distribution would be worth 14.06 cents per unit. However, today is also the day that this ETF has traded ex-dividend. That's why we are seeing a big dip in the IVV unit price this Monday (currently down 1.34%).

It's not just the iShares S&P 500 ETF. Most iShares ETFs are following IVV's lead today. That includes everything from the iShares Core S&P/ASX 200 ETF (ASX: IOZ) and the iShares MSCI South Korea ETF (ASX: IKO) to the iShares Global Consumer Staples ETF (ASX: IXI) and the iShares Government Inflation ETF (ASX: ILB).

A big day for ASX ETFs

All of these exchange-traded funds just traded ex-dividend and will pay their next distributions on 11 July.

And it's not just iShares ETFs that are going through this process right now. Last Friday, we discussed the latest monster dividend from the VanEck Morningstar Wide Moat ETF (ASX: MOAT). Well, MOAT units have also traded ex-dividend for this monster payment today, joining almost all ETFs from VanEck.

In addition to MOAT, today is the day that the VanEck Global Clean Energy ETF (ASX: CLNE), the VanEck China New Economy ETF (ASX: CNEW), the VanEck Gold Miners ETF (ASX: GDX) and the VanEck Australian Equal Weight ETF (ASX: MVW), amongst others, have traded ex-dividend. These ETFs will all pay out their respective distributions on 23 July, later this month.

It's a similar story for Vanguard ETFs. Vanguard is the provider responsible for many of the ASX's most popular ETFs.

Today has seen the likes of the Vanguard Australian Shares Index ETF (ASX: VAS), the Vanguard MSCI Index International Shares ETF (ASX: VGS), the Vanguard Australian Shares High Yield ETF (ASX: VHY) and the Vanguard Diversified High Growth Index ETF (ASX: VDHG) trade ex-dividend. These funds, as well as most Vanguard ETFs, will pay out their latest dividends on 16 July this month.

So all in all, this Monday is a huge day for ASX exchange-traded funds. If you own one, chances are you've got a paycheque with your name on it in the mail as we speak.

The post Why it's a big day for ASX ETFs appeared first on The Motley Fool Australia.

But I'm going to tell you about VanEck Australian Equal Weight ETF (ASX: MVW) and explain why it might be an even better choice.

The VAS ETF seeks to track the S&P/ASX 300 Index (ASX: XKO), which includes 300 of the largest businesses on the ASX. It has a very low annual management fee of 0.07%, satisfactory diversification, and a large weighting to names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL).

I'll discuss three factors that make me like the equal-weight ETF even more than the VAS option.

Even allocation between companies

There may be 300 businesses inside the VAS ETF, but the biggest 10 positions account for almost half of the portfolio. That's not necessarily a bad thing, but it does mean it's not as diversified as it could be.

The top 10 include National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), Woodside Energy Group Ltd (ASX: WDS) and Goodman Group (ASX: GMG).

In contrast, the MVW ETF only has 76 holdings at the moment, but all weightings are virtually the same. Share price movements change the positioning slightly, but the biggest allocations of Evolution Mining Ltd (ASX: EVN), Qantas Airways Ltd (ASX: QAN), and South32 Ltd (ASX: S32) have a weighting of 1.6%, 1.5%, and 1.48%, respectively. The ETF is regularly re-weighted to achieve equal position sizes.

Higher weighting to growth industries

At the end of February 2024, the Vanguard Australian Shares Index ETF had a large weighting to ASX financial shares (29.7%) and mining shares (22.4%). Those two sectors make up just over half of the portfolio, but they don't have a strong earnings growth profile.

Over the long term, I think sectors like healthcare, tech , consumer discretionary and industrial shares have a more appealing growth outlook.

Within the MVW ETF, the financial sector only makes up 19.6% of the portfolio and mining comprises 18.3% of the portfolio. This is only 37.9% of the portfolio combined and means there's more room for other industries, which may help deliver better shareholder returns

Stronger returns achieved

Looking at the returns that the MVW ETF has achieved, its net returns have been an average of 9.99% over the past three years, 8.97% per annum over the last five years and 9.63% in the past decade.

The VAS ETF has delivered an average return per annum of 9.1% in the last three years, 8.6% per annum in the past five years, and 7.9% in the past ten years. The Vanguard Australian Shares Index ETF has underperformed over each time period.

Past performance is definitely not a guarantee of future performance, but it shows how some smaller businesses can deliver stronger returns than the ASX large-cap shares over the long term. I think they can continue the trend of better growth over the long term, but there may certainly be volatility along the way.

The post This compelling ASX ETF may be a better way to invest in Aussie stocks than Vanguard Australian Shares Index ETF (VAS) appeared first on The Motley Fool Australia.

But thanks to the explosive growth in popularity of index investing in recent years, the ASX is now awash with index ETFs. As such, choosing one that works for you can get a little overwhelming. So today, I'm going to discuss three ASX index funds that I think are a buy today.

3 ASX index funds I'd happily buy today

iShares S&P 500 ETF (ASX: IVV)

To start off with, let's discuss an ASX index fund endorsed by the legendary Warren Buffett himself. The S&P 500 Index (SP: .INX) is the most widely tracked and invested index in the world.

It is a barometer of the entire US stock market and represents the largest 500 companies listed on the American markets. That's everything from Apple and Amazon to Coca-Cola and McDonald's.

Warren Buffett has recommended an S&P 500 index fund as the perfect investment for "most people", calling it a slice of America. I think this ASX index fund contains most of the world's highest-quality companies. As such, it's a no-brainer.

iShares MSCI Japan ETF (ASX: IJP)

This ASX index fund is a little exotic. It gives investors exposure to an index that reflects most companies on the Japanese stock exchange.

I think Japan houses some of the world's best companies outside of the United States. Through this ETF, investors will gain exposure to the likes of Toyota, Nintendo, Sony, Honda, Softbank and Mitsubishi Heavy Industries.

In my view, this is a great investment for any Australian to consider, given the healthy diversification it can add to any portfolio. This ASX index fund has gained more than 30% over the past year. But I think there is plenty of upside going forward.

VanEck Australian Equal Weight ETF (ASX: MVW)

Finally, we have an unconventional investment to discuss. Most index funds on the ASX, including the most popular choices, are weighted by market capitalisation.

This means that the larger companies command more weight and influence within each fund than the smaller ones. It's why a typical ASX fund is more heavily influenced by the movements of the Commonwealth Bank of Australia (ASX: CBA) share price than JB Hi-Fi Ltd (ASX: JBH).

As such, a normal ASX index fund is very heavily tilted towards the big four banks and the large miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). That might be great for dividend lovers. But this doesn't sit well with other investors. That's where the VanEck Equal Weight ETF comes in.

Instead of giving the lion's share of the ETF to the largest stocks, the index fund gives the largest 75 or so shares on the ASX equal treatment within the ETF. Because of this, CBA stock has just as much influence here as JB Hi-Fi shares.

This approach has worked well for this ETF in recent years. Current data shows MVW units outperforming a standard ASX 200 index fund over the last three years on average.

The post 3 top ASX index funds to buy now appeared first on The Motley Fool Australia.

This ASX index fund offers a simple, bottom-drawer investment that investors can feel comfortable buying and never checking up on. That's because it simply tracks the largest 300 companies on the Australian share market at any one time. That's everything from National Australia Bank Ltd (ASX: NAB) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH) and Adairs Ltd (ASX: ADH).

Of course, the value of all ASX shares changes every day that the share market is open. But to make sure that the fund is always holding the largest 300 companies, the VAS ETF undergoes a rebalance every three months. As such, the owners of VAS can choose to never look at or think about their investments and still expect to continue to receive a return that reflects the ongoing prosperity of the Australian share market as a whole.

But the Vanguard Australian Shares ETF's popularity doesn't automatically mean that it is the best bottom-drawer, passive investment available on the ASX.

So today, let's look at the returns of some of VAS' competition, and see how they stack up.

Is the ASX's VAS ETF the best bottom-drawer investment out there?

How does VAS measure up to ASX alternatives?

Well, the first thing to note is that there are plenty of other index funds on the ASX that have delivered better returns than the Vanguard Australian Shares ETF.

To illustrate, Vanguard Australian Shares ETF has delivered a total shareholder return (including dividends) of 2.4% over the 12 months to 31 October 2023. Over the past three, five and ten years, that stretches to an average of 8.68%, 7.16% and 6.51% per annum respectively.

But the iShares S&P 500 ETF (ASX: IVV), an index fund covering 500 of the largest companies on the US markets has done a lot better. It's returned 10.87% over the past year. It has also averaged 13.89%, 13.18% and 15.52% over the past three, five and ten years respectively.

The BetaShares Nasdaq 100 ETF (ASX: NDQ), which tracks the more tech-heavy Nasdaq exchange, has done even better.

But these aren't really fair comparisons because they track shares that aren't even listed on the ASX. Our local shares can't really compete with the world-crushing dominance of the likes of Apple, Microsoft and Amazon. Plus, these ETFs have also benefitted enormously from the Australian dollar's continued weakness against the US dollar of the past decade.

We won't bother comparing against any other ASX 200 ETF either. These ETFs are very similar to VAS's own portfolio but put more emphasis on the top holdings while leaving out the bottom third.

What about an equal-weight ASX index fund?

Because of the way that both an ASX 200 and an ASX 300 ETF give more weight to the larger companies on the index, changing the bottom yields have negligible results.

A fairer comparison would be against the VanEck Australian Equal Weight ETF (ASX: MVW). This ETF also tracks the largest 200 ASX shares on the market. But instead of giving the largest companies the most exposure, it allows every share an equal influence.

Thus, NAB and Adairs, for example, are both represented in the same proportion.

Let's now see if this different approach leads to better performance figures.

As of 31 October, the MVW ETF delivered a 12-month return of 3.89%. That gets up to an average of 8.68% per annum over the past three years, and 6.97% over the past five.

So no, this ETF has not managed to deliver superior returns compared to the uber-popular VAS, at least apart from the past year. Something to keep in mind when looking for a bottom-drawer investment.

The post Is the Vanguard Australian Shares ETF (VAS) the best bottom-drawer investment? appeared first on The Motley Fool Australia.

I like the idea of building my own portfolio and deciding how much to invest in each ASX share. However, the idea of doing that is not for everyone. It's important — and challenging — to get the right balance and not be too heavily invested in one area.

One of the main gripes I have with exchange-traded funds (ETFs) like Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) is that they're mostly invested in just a few names from two industries: banking and mining.

It's no surprise that's where over half of the S&P/ASX 200 Index (ASX: XJO) is invested. Indeed, a sizeable portion of the Australian economy is focused on commodities and financial services (with banks heavily exposed to housing loans).

I think the MVW ETF is a better way of investing in ASX shares and the Australian economy.

Vectors Australian Equal Weight ETF diversification

As the name may give away, the positions in this portfolio are equally weighted. Instead of around 17% of the portfolio being invested in BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA) shares, the holdings are rebalanced evenly every three months.

While the number of holdings in this ETF is less than in VAS ETF and A200 ETF, the fact it's not so heavily concentrated makes the MVW ETF more diversified in my eyes.

There are currently 80 ASX share positions in the portfolio and they are all seen as 'blue chip' companies that generate at least 50% of their revenue or assets from the Australian market.

According to VanEck, since the MVW ETF's inception in March 2024, it has outperformed the S&P/ASX 200 Index (ASX: XJO) by an average of 1.7% per annum, with an actual return per annum of 9%. It has also outperformed in 12 of the past 15 calendar years, including the last six in a row, according to the fund provider.

This outperformance has been possible because of the larger exposure to smaller companies, which have outperformed the big stocks.

Foolish takeaway

For investors wanting diversification and potentially better returns because of larger exposure to ASX growth shares, I think this ETF could be a better pick for investors. In my mind, there's more to the ASX than just miners and bankers.

The post Why the VanEck Vectors Australian Equal Weight ETF (MVW) is a great way to invest in ASX shares appeared first on The Motley Fool Australia.

We take a look at the list and what sort of cash their shareholders will be pocketing.

Which major ETFs are on the ex-dividend list today?

There are a total of 126 Australian listed ETFs going ex-dividend today. We will focus on 5 of the most popular ones that cover the broad Australian indexes.

Vaneck Vectors Australian Equal Weight ETF

The Vaneck Vectors Australian Equal Weight ETF (ASX: MVW) announced it will distribute a final dividend of 34 cents to shareholders on 23 July 2021, with shares going ex-dividend from 1 July.

The fund has posted a gain of around 6% year to date at the time of writing and has climbed almost 2% in the last month.

Shareholders will receive an annual dividend of 93 cents, and at the current share price of $32.77, the dividend yield is 2.84%.

The Australian Equal Weight ETF has a market capitalisation of $1.58 billion and trades at a price-to-earnings (P/E) ratio of 127. The ETF has maintained each dividend payment to shareholders since July 2014.

Vanguard Australian Shares Index ETF

One of Australia's largest exchange-traded funds, with a market cap of $8.6 billion, the Vanguard Australian Shares Index ETF (ASX: VAS) will pay a final dividend of 55.6 cents per share on 16 July 2021, going ex-dividend from today.

The Australian Shares Index ETF has returned a little over 10% this year and is 1.37% in the green over the last month at the time of writing. However, the market price has dipped into the red 0.11% over the past 5 days.

The fund has an annual dividend payment of $1.98 per share, giving a dividend yield of 2.1% at the current share price of $93.30.

It has maintained consistency in its distribution schedule, having met each dividend payment to shareholders since July 2009.

Ishares Core S&P/ASX 200 ETF

The Ishares Core S&P/ASX 200 ETF (ASX: IOZ) is set to distribute a final dividend payment of 20.3 cents per share to shareholders on 13 July 2021, after going ex-dividend from 1 July.

With a market capitalisation of $4.1 billion, the fund's upcoming final payment will complete an annual dividend of 60.4 cents per share, with a dividend yield of 2.02% at the time of writing.

It is in the red from the previous 5 days trading, however is in the green 1.15% over the past month and is up 10.23% since 1 January.

The investment vehicle from asset management giant BlackRock has completed each dividend payment to shareholders since March 2011 and is currently trading at $29.85 at the time of writing.

BetaShares Australia 200 ETF

BetaShares' flagship product the BetaShares Australia 200 ETF (ASX: A200) will pay its final dividend to shareholders on 16 July 2021, with shares ex-dividend effective 1 July.

At the time of writing, the ETF is in the red 0.98% today and is also down 0.16% over the past 5 days. In the past month, the ETF price has gained 1.29% and has also climbed almost 11% since the start of this year.

The fund will pay shareholders a 56.54 cents per share dividend, lending to an annual dividend of $2.77 per share. At the current share price of $122.93, the dividend yield is 2.25%.

A relatively new investment vehicle, the Australia 200 ETF has made each dividend payment in whole since February 2018 and has posted a 12-month return of around 24%.

Vanguard MSCI Australian Large Companies Index ETF

The Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) also goes ex-dividend today and will return a dividend payment to shareholders on 16 July 2021.

Shareholders can expect to pocket 34.4 cents per share which gives an annual dividend yield of 2.48% at the current market price of $75.45.

The fund has been in existence since 2011, and has made good on each dividend payment since July 2011.

At the time of writing, the ETF has a market capitalisation of $136.2 million and has given a return just over 11% since the start of the year.

The post These 5 ASX listed ETFs go ex-dividend today appeared first on The Motley Fool Australia.

But BetaShares isn't the only ETF provider that seems bent on expanding its stable of exchange-traded funds for Aussies to choose from.

VanEck is also champing at the bit, it seems.

You might know VanEck for its VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT). Or perhaps the VanEck Vectors Australian Equal Weight ETF (ASX: MVW) that we discussed a few months ago. There's also the VanEck Vectors Gold Miners ETF (ASX: GDX), which has a following amongst the gold bugs out there.

VanEck has been busy. It was only back in August last year that the Fool covered VanEck's plans to launch 4 new ETFs – all of which have subsequently hit the ASX boards.

3 new ETFs from VanEck

However, VanEck has more up its sleeves. According to the fund provider, VanEck has another 3 ETFs in the pipeline that it plans on launching soon.

These are:

• the VanEck Vectors MSCI International Small Companies Quality ETF (ticker to be QSML)
• the VanEck Vectors Global Clean Energy ETF (ticker to be CLNE)
• finally, the VanEck Vectors MSCI International Value ETF (ticker to be VLUE)

Regarding the International Small Companies Quality ETF, this fund is set to be modelled off of VanEck's existing VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL). QUAL selects mid and large-cap companies based on metrics like debt to equity and earnings growth.

The Global Clean Energy ETF is fairly self-explanatory. It will reportedly seek to capitalise on the global shift away from non-renewable fuels like oil and coal. This will be achieved by investing in companies that provide green, renewable energy.

The VanEck Vectors MSCI International Value ETF is an interesting one though. The company states that "in an Australian first, VanEck is offering investors a way to access a portfolio of international companies selected for their higher value score relative to sector peers, as measured by MSCI".

This will be done by comparing a company against its peers using metrics. Which includes book value and forward price-to-earnings (P/E) ratios. The fund will invest in 250 companies from around the world that fulfil these criteria. VanEck notes that "to date, only institutional investors have been able to access low-cost passive international value investments". That's a paradigm the company is hoping to change with this new ETF.

So index investors, rejoice, or wring your hands, depending on your ETF fatigue. You are about to have three more ETFs to choose from, regardless.

The post Brace for even more new ETFs to hit the ASX appeared first on The Motley Fool Australia.