Looking for the best Australian shares ETFs of 2021?
There are a number of top Australian shares ETFs listed on the ASX which provide varying types and levels of exposure based upon factors such as market capitalisation and dividend yield.
Here are some of the best Australian share ETFs to consider adding to your portfolio in 2021.
1. BetaShares Australia 200 ETF (ASX: A200)
The Betashares A200 ETF (ASX: A200) provides exposure to the largest 200 Australian companies, based on market capitalisation.
A200 aims to track, before fees and associated costs, the Solactive Australia 200 Index. This index is very similar to the S&P/ASX 200 (ASX: XJO) however the Solactive index requires an absolute minimum amount of liquidity as opposed to a relative amount of liquidity.
The top holdings include well known “blue chip” names such as Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC).
One of the A200’s main attractions is it has a management fee of just 0.07% per year (p.a.), which BetaShares claim is the lowest for any Australian shares ETF. A200 has a current historical distribution yield of 2.6% and has delivered a total return of 1.33% over the last year.
Read the BetaShares A200 ETF report on Best ETFs Australia.
2. Vanguard Australian Shares High Yield ETF (ASX: VHY)
The Vanguard VHY ETF (ASX: VHY) invests in Australia’s largest ASX-listed dividend-paying shares. The VHY ETF allocates capital based upon each company’s market capitalisation and forecast dividend yield.
The VHY ETF aims to track the FTSE Australia High Dividend Yield Index, which excludes companies not expected to pay a dividend and listed property trusts (REITS).
VHY pays quarterly distributions and has a current historical dividend yield of 3.91%. For dividend-focused investors, this compares very favourably to the 2.6% distribution yield offered by A200. VHY has a relatively low management fee of 0.25% p.a and has recorded a one-year total return of -2.83%.
Check out the Vanguard VHY ETF report on Best ETFs Australia.
3. BetaShares EX20 ETF (ASX: EX20)
The BetaShares EX20 ETF (ASX: EX20) has holdings in the 180 largest companies by market capitalisation. That is, shares outside the top 20 on the ASX.
EX20 could be a good choice for diversifying a portfolio that is already heavily concentrated in the top 20 companies. Companies outside the largest 20 on the ASX arguably have the potential to grow earnings/profit more quickly than mature mega-cap companies, such as the big four banks.
Currently, EX20’s top 5 holdings include Fortescue Metals Group Ltd (ASX: FMG), Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), and Brambles Limited (ASX: BXB).
EX20’s management fee is 0.25% p.a which is the same as the Vanguard VHY ETF. Over the past year, EX20 outperformed the Betashares A200 ETF, delivering a total return of 0.93%.
Read the BetaShares EX20 ETF report on Best ETFs Australia.
