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The cheapest ETFs on the ASX

The cheapest ETF has an annual fee of 0.03% with average returns of 12.54% over 5 years.

Investors who want to increase their returns in either superannuation or exchange traded funds (ETFs) should focus on the fees they are paying and what they are getting in return.

But while fees play a key role in the long-term success of many ETFs, it's also important to consider other factors, such as short-term and long-term performance figures and how these compare to others in the market.

This guide compares both the cheapest and best-performing ETFs to give you a broader picture of the market.

Below are the 20 cheapest ETFs on the ASX by management fees, or "management expense ratio" (MER). This is the annual fee charged by fund managers as a percentage of the assets held in the fund.

The returns shown are net, meaning fees have been removed prior to the performance figures.

Cheapest ETFs on the ASX
Fund nameCodeTypeFee (% p.a.)1-yr return3-yr return5-yr return
Vanguard US Total Market Shares Index ETFVTSETF0.03%7.91%12.38%12.54%
iShares S&P 500 ETFIVVETF0.04%9.46%13.49%13.07%
Betashares Australia 200 ETFA200ETF0.04%4.05%10.82%8.83%
SPDR S&P/ASX 200 ESG FundE200ETF0.05%5.03%10.57%n/a
iShares Core S&P/ASX 200 ETFIOZETF0.05%4.12%10.37%8.58%
SPDR S&P/ASX 200STWETF0.05%4.31%10.54%8.56%
iShares S&P Midcap ETFIJHETF0.07%-1.51%12.40%8.87%
Vanguard Australian Shares Index ETFVASETF0.07%3.85%10.09%8.52%
iShares S&P Small-Cap ETFIJRETF0.07%-7.89%11.87%5.94%
iShares Core Cash ETFBILLETF0.07%3.72%1.49%1.33%
Betashares Global Shares ETFBGBLETF0.08%n/an/an/a
Vanguard All-World ex US Shares Index ETFVEUETF0.08%13.10%6.93%6.36%
iShares Core MSCI Australia ESG Leaders ETFIESGETF0.09%3.22%n/an/a
SPDR S&P 500 ETF TrustSPYETF0.09%9.63%13.73%13.36%
iShares Core MSCI World ex Australia ESG Leaders ETFIWLDETF0.10%13.63%13.60%11.67%
iShares S&P 500 AUD Hedged ETFIHVVETF0.10%5.89%7.43%8.04%
Vanguard Australian Fixed Interest Index ETFVAFETF0.10%-1.56%-4.79%-0.31%
iShares Core Composite Bond ETFIAFETF0.10%-1.35%-4.77%-0.32%
SPDR S&P/ASX Australian Government Bond FundGOVTETF0.10%-2.81%-6.23%-1.00%
Betashares Global Shares Currency Hedged ETFHGBLETF0.11%n/an/an/a
Source: ASX | Period ending: 31 Oct 2023

How do the cheapest ETFs compare to the market?

At the time of writing, the cheapest ETF in Australia is the Vanguard US Total Market Shares Index (VTS). It returned 12.54% over the 12 months to Oct 2023. This is a positive result considering that during the same period the S&P 500 index and Nasdaq rose less than 1%.

When you compare the returns of the cheapest ETFs over the last 1-5 years with the average ETF returns below, it's also clear most of the lowest costing ETFs outperformed their more expensive peers.

A few averages worth noting (to 31 October 2023):

  • Average ETF return over 1 year: 4.56% p.a.
  • Average ETF return over 3 years: 4.50% p.a.
  • Average ETF return over 5 years: 5.39%
  • Average ETF management fee (MER): 0.54%

Choose an ETF broker to start investing

1 - 5 of 5
Name Product Brokerage on AU ETFs Inactivity fee Asset class
IG Share Trading
Finder Award
IG Share Trading
AUD $8
ASX shares, Global shares, US shares, UK shares, ETFs
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian and international shares, plus get access to 24-hour customer support.
CMC Invest
Finder Award
CMC Invest
ASX shares, Global shares, Options trading, US shares, mFunds, ETFs
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 35,000 products, including shares, crypto, ETFs and managed funds, with access to 15 major global and Australian stock exchanges. Plus, buy Aussie shares for $0 brokerage up to $1,000. (Limited to one buy order per stock per trading day).
Moomoo Share Trading
ASX shares, Global shares, US shares, ETFs
Finder exclusive: Get an additional 30 days on top of the regular brokerage-free period for new accounts (see link for details). T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 18 million investors.
Tiger Brokers
Tiger Brokers
ASX shares, Global shares, US shares, ETFs
Finder exclusive: Get 15 commission-free trades on US or ASX equities for the first 180 days and US$50 fractional shares when you deposit at least US$500. Plus, all new customers get 1 free trade per month for the first 12 months (T&Cs apply).
Get one brokerage-free trade per month for the first 12 months for US or ASX markets. T&Cs apply.
ASX shares, Options trading, US shares, ETFs
Earn US$100 in cash vouchers when you fund your new account with US$2,000 until March 30, 2024. Plus, earn up to 5.3% p.a. interest on your US cash account (T&Cs apply).
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

How do the cheapest compare to the best?

While cheaper fees tends to correlate with above average performance over many years, the same does not appear to be true for the top performing funds.

If you take a look at the best performing ETFs on the Australian Securities Exchange (ASX) in 2023, you'll notice their fees aren't necessarily the cheapest. In fact, some of the highest returning funds have management fees that are well above the average of 0.54%.

20 best performing exchange traded products in 2023
Fund nameASX codeTypeFee (% p.a)1 year total return
Global X FANG+ ETFFANGETF0.3563.01%
Global X Semiconductor ETFSEMIETF0.5741.17%
Global X Ultra Long Nasdaq 100 Hedge FundLNASMF1.0037.21%
Betashares Metaverse ETFMTAVETF0.6930.65%
Betashares Global Uranium ETFURNMETF0.6930.50%
Betashares Asia Technology Tigers ETFASIAETF0.6729.16%
Loftus Peak Global Disruption Fund (Managed Fund)LPGDMF1.2026.80%
Betashares NASDAQ 100 ETFNDQETF0.4825.51%
Montaka Global Equities Fund (Managed Fund)MOGLMF1.3225.48%
VanEck Video Gaming and Esports ETFESPOETF0.5525.39%
Montaka Global Extension Fund (Quoted Managed Hedge Fund)MKAXMF1.2524.65%
Hyperion Global Growth Companies Fund (Managed Fund)HYGGMF0.7023.47%
Perth Mint GoldPMGOLDSP0.1522.10%
Global X Physical GoldGOLDSP0.4022.06%
Betashares Online Retail and E-Commerce ETFIBUYETF0.6721.97%
Global X EURO STOXX 50 ETFESTXETF0.3521.95%
Betashares NASDAQ 100 Yield Maximiser Fund (Managed Fund)QMAXMF0.6821.81%
Betashares NASDAQ 100 ETF - Currency HedgedHNDQETF0.5121.64%
iShares China Large-Cap ETFIZZETF0.7721.64%
Global X Physical SilverETPMAGSP0.4921.32%
Source: ASX | Period ending: 31 October 2023 | SP = Structured Product, MF = Managed Fund / Active ETF, MER = Management Expense Ratio (aka fees).

Why are some funds cheaper than others?

Exchange traded funds typically have low management fees (MER) compared to regular managed funds because most of them are index funds. Index funds passively track a stock market index, such as the S&P/ASX200 index, so they need little legwork from the fund managers and can charge cheaper fees (MER) for the service.

Because index funds mirror the returns of the stock market, they don't usually beat it, but they do perform consistently and tend to be lower risk than other kinds of funds.

On the other hand, many of the best performing ETFs are more strategic (and may be riskier) than a standard index fund. And because of this, they often charge a higher management fee for the service.

What fees do you pay when you invest in ETFs?

These are the 3 main fees you'll need to consider when investing in an ETF:

  • Management Expense Ratio (MER): This is the annual management fee charged by the ETF provider. It's typically charged before performance figures are released and is usually between 0.1–1% of assets.
  • Brokerage fee: This is the fee charged by the broker or online trading platform every time you invest in a stock or ETF. This is typically around $10 to $30 per trade.
  • Performance fees: Some actively managed ETFs charge a performance fee. This is typically charged as a percentage of your funds that outperform a certain benchmark.

So, do fees matter?

Fees absolutely matter, especially over many years. While ETFs are relatively new to the market, long-term studies of super fund performance show that high fees are strongly correlated with long-term performance.

Among the cheapest ETFs on the ASX, just 3 underperformed the average over 3 and 5 years. It's also worth noting that the cheapest ETFs listed above are a mix of every category – including active, passive, global, Australian, high and low-risk.

What the data above does also show is that fees are not the only consideration worth thinking about – and for some investors, not the most important.

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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