Choosing the right Australian share ETF can feel overwhelming. With so many options available on the ASX, how do you know which one is the right fit for your portfolio?
⚡ Quick Verdict: Which ETF Should You Pick?
- 💰 The Value Winner: A200. At 0.04% p.a., it is the cheapest way to own the top 200 Aussie companies.
- 🏢 The Size King: VAS. The largest ETF in Australia ($22B+), offering slightly more diversification (300 companies).
- 💸 The Income Beast: VHY. Perfect for retirees, offering a ~8.5% distribution yield (gross) by focusing on dividend payers.
This guide breaks down the most popular Australian share ETFs, exploring their different strategies, holdings, fees, and performance for late 2025.
2025 ETF Showdown
| ETF | Fee (p.a.) | Size (AUM) | Yield* | Strategy |
|---|---|---|---|---|
| A200 | 0.04% | $8.4B | ~3.8% | Lowest Cost (ASX 200) |
| VAS | 0.07% | $22.0B | ~3.8% | Broadest (ASX 300) |
| IOZ | 0.05% | $6.8B | ~3.8% | BlackRock/iShares Core |
| VHY | 0.25% | $4.4B | ~8.5% | High Dividend Focus |
| MVW | 0.35% | $2.6B | ~3.2% | Equal Weight (Diversified) |
*Yields are approximate trailing distribution yields as of late 2025. Check PDS for details.
1. VAS (Vanguard Australian Shares Index ETF) – The Default Choice
VAS is Australia's most popular ETF for a reason. With over $22 billion in assets, it is the 800-pound gorilla of the ASX.
Why choose it? It tracks the ASX 300, meaning you get exposure to the top 300 companies. This gives you the "big banks and miners" plus a longer tail of mid-cap growth companies.
The Cost: 0.07% p.a. (or $7 per $10,000 invested).
2. A200 (BetaShares Australia 200 ETF) – The Cost Cutter
If you are fee-conscious, A200 is your winner. It tracks the Solactive Australia 200 index (functionally identical to the ASX 200) for just 0.04% p.a..
Is it better than VAS? Purely on cost, yes. However, performance between A200 and VAS is nearly identical over the long term (approx 13% p.a. over 5 years). Choosing between them often comes down to whether you prefer Vanguard's ownership structure or BetaShares' lower fee.
💡 Pro Tip: Don't Overthink A200 vs IOZ vs STW
A200 (0.04%), IOZ (0.05%), and STW (0.05%) are all essentially doing the same thing. They buy the top 200 companies. The fee difference is negligible (the cost of a coffee per year). Pick one and stick with it.
3. VHY (Vanguard High Yield) – The Income Engine
VHY is unique. It filters the ASX for companies that pay big dividends, but restricts any one industry to 40% and any one company to 10% to prevent it from just becoming a "Bank ETF".
Performance: VHY has delivered massive income recently, with yields often exceeding 8% (gross). However, capital growth is generally lower than VAS over the very long term because it misses out on low-dividend growth stocks (like tech).
4. MVW (VanEck Equal Weight) – The Diversifier
The Australian market is concentrated. Banks and Miners make up nearly 50% of VAS and A200. MVW solves this by giving every company an equal weight.
The "Hidden" Cost: While the diversification is great, MVW has a higher fee (0.35%) and higher "tax drag." Because it has to sell winners and buy losers every quarter to reset the weights, it triggers more capital gains events than a standard index fund.
My Strategy? The Core & Satellite Approach
Most smart investors use A200 or VAS as their "Core" (approx 40-50% of their portfolio) to capture the market average cheaply. They then add satellites like VGS (International) to get growth that the Aussie market lacks.
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