Who Has The Lowest ETF Management Fees In Australia?

Who Has The Lowest ETF Management Fees In Australia?

When it comes to paying fees, Australians want to get the best possible deal, who doesn’t? When it comes to management fees, not all ETFs are created equal. Some ETFs have fees as low as 0.04%, while others are 32 times this and are pushing the 1.29% mark.

So, who has the lowest ETF fees, and what do I get for my money? In this article, we’ll break down the lowest ETF Management Fees in Australia and as a bonus, we’ll reveal the top 5 most expensive ETFs using ASX ETF data.

Who Has The Lowest ETF Management Fees In Australia?

Who Has The Lowest ETF Management Fees In Australia - Top 10 Lowest(1)

The title of the lowest ETF management fee in Australia goes to not one but two ETF providers. iShares S&P 500 ETF, IVV, and BetaShares Australia 200 ETF, A200, will set you back a low 0.04%.

BetaShares reduced the management fee for A200 back in February 2023, from 0.07% to 0.04%, making it joint cheapest with IVV.

The next cheapest options are just 0.01% more than the cheapest Aussie-domiciled ETFs at 0.05%. SPDR S&P/ASX 200 ESG Fund, E200, is an ETF that tracks the ASX 200 ESG Index but with a focus on Australian companies with strong ESG characteristics.

The other two options include IOZ and STW, which also come in at 0.05%. iShares Core S&P/ASX 200 ETF, IOZ, tracks the standard ASX 200. SPDR S&P/ASX 200, STW, while also tracking the ASX 200, holds the title of being Australia’s first-ever ETF, dating back to 24 Aug 2001.

The cheapest ETFs come in at 0.07%, with the largest of them being Vanguard Australian Shares Index ETF, VAS. Vanguard’s VAS has long held the title of being Australia’s most invested in ETF, with funds under management totaling $13.2 billion [1].

This is over double the amount of its closest rivals IVV and Vanguard Msci Index International Shares Etf, VGS, which have $6.2 billion and $6.3 billion respectively [1].

iShares round out the top 10 cheapest ETFs on the market with some variation to the otherwise ASX-heavy ETF options. Their lesser-known ETF product, iShares Core Cash ETF, BILL, also has a 0.07% ETF management fee.

BILL invests in S&P/ASX Bank Bill Index and has 55 holdings with YTD earnings of 0.16% [2]. Many will wonder why invest in this to begin with?

According to iShares, “The Fund offers the ability to achieve capital preservation and regular income with a diversified portfolio of high-quality short-term money market instruments. The Fund is truly liquid and only holds investments in instruments that can be sold on the same day basis” [2].

iShares Core S&P Mid-Cap ETF, IJH, which comes at 0.07%, invests in mid-cap US companies, tracking the S&P Mid-Cap 400. This is a fairly unique offering and differs hugely from IVV, which tracks the S&P 200 dominated by the likes of Amazon, Apple, Nvidia, and META.

Lastly, we have iShares S&P Small-Cap ETF, IJR, which like IJH comes in at 0.07% and tracks small-cap US companies. IJR tracks the Small-Cap 600 with notable holdings including e.l.f. Beauty Inc, SPS Commerce Inc, and Fabrinet if you are at all familiar with US small-cap companies.

Who Has The Highest ETF Management Fees In Australia?

With some amazingly low ETF fees in Australia, you might be surprised at the cost of some of the most expensive.

The most expensive ETF, using ASX data, is BetaShares Crude Oil Index ETF-Currency Hedged (Synthetic) ETF, OOO, coming in at a staggering 1.29%. OOO is not your average run-of-the-mill kind of ETF.

According to BetaShares, OOO aims to track the S&P GSCI Crude Oil Index Excess Return, providing exposure to crude oil futures, hedged for movements in the AUD/USD exchange rate [3].

The next most expensive ETF, and a more familiar option to most of us, is VanEck China New Economy ETF, CNEW. CNEW comes in at a hefty 0.95% and tracks the CSI MarketGrader China New Economy Index.

CNEW was recently featured in my article on the best-performing ETFs in Australia over the last 5 years as one of the top-performing Asian ETFs.

Coming in at number 3 is VanEck Global Listed Private Equity ETF, GPEQ. GPEQ will set you back 0.92%, and according to VanEck, it offers investors a diversified portfolio of the 50 largest and most liquid globally listed private equity companies [4].

The next most expensive ETF is BetaShares India Quality ETF, IIND. IIND will also set you back 0.80% in management fees, with the ETF selecting the top 30 highest-quality Indian companies, according to BetaShares [5].

To round out our top 5 most expensive ETFs is iShares China Large-Cap ETF, IZZ. IZZ has an ETF management fee of 0.77% and tracks the FTSE China 50 Index. IZZ, like CNEW, was featured in my Best Performing ETFs In Australia Over The Last 5 years.

However, unlike every other entrant on that list, it was the only ETF that had a negative 5-year performance. IZZ has a 5-year average return of -6.24%.

Other Honourable Mentions Of The Highest ETF Fees

No less than 13 ETFs have a 0.69% ETF management fee, as you can see below. These ETFs vary widely, with the hugely popular ACDC ETF among them.

Who Has The Lowest ETF Management Fees In Australia(1)

Summary

The prices of ETFs have significantly dropped over time, with ETF providers vying for individuals’ investment dollars. With price drops occurring for some of Australia’s most popular ETFs, VAS and A200, other ETF providers will likely follow suit in the future.

Australian-domiciled ETFs provide the average investor the opportunity to get into markets they would otherwise be excluded from.

This could be because of brokerage costs in acquiring hundreds, if not thousands, of individual shares in some cases in far-off markets such as the US, India, Japan, and China. ETFs are the vehicle that makes this all possible.

This article does not serve as an endorsement or recommendation for products mentioned in the article. The information presented here is based on referenced sources and is accurate as of the date of December 30, 2023, using November 2023 ASX Data. Please note that these articles are written sometime before their publication date.

The information provided in this content is for informational purposes only and should not be considered as financial, investment, or professional advice. We recommend consulting with a qualified expert or conducting your own research before making any financial decisions.

The accuracy, completeness, or reliability of the information cannot be guaranteed, and the provider shall not be held responsible for any actions taken based on the information contained in this content.

  1. https://www.asx.com.au/issuers/investment-products/asx-funds-statistics
  2. https://www.blackrock.com/au/individual/products/287045/ishares-core-cash-etf
  3. https://www.betashares.com.au/files/OOO/OOO-faqs.pdf
  4. https://www.vaneck.com.au/etf/alternatives/gpeq/snapshot/
  5. https://www.betashares.com.au/fund/india-quality-etf/

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