The cheapest ETFs on the ASX

The cheapest ETF has an annual fee of 0.03% with average returns of 17% over 5 years.

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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.

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.

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Below are the 20 cheapest ETFs on the ASX to date (January 2022) 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 ETFVTSETF0.0325.85%20.69%17.44%
iShares S&P 500 ETFIVVETF0.0430.43%21.29%17.91%
Betashares Australia 200 ETFA200ETF0.0711.34%11.10%n/a
iShares Core Cash ETFBILLETF0.070.31%1.22%n/a
Vanguard All-World ex US Shares Index ETFVEUETF0.0812.16%10.71%9.85%
iShares Core MSCI Australia ESG Leaders ETFIESGETF0.09n/an/an/a
SPDR S&P 500 ETF TrustSPYETF0.0930.90%21.60%18.05%
iShares S&P Midcap ETFIJHETF0.0920.04%14.78%12.12%
iShares S&P Small-Cap ETFIJRETF0.0916.77%13.54%11.90%
iShares Core S&P/ASX 200 ETFIOZETF0.0910.15%10.66%9.46%
iShares Core MSCI World ex Australia ESG Leaders ETFIWLDETF0.129.62%18.33%14.71%
iShares S&P 500 AUD Hedged ETFIHVVETF0.118.66%17.04%14.36%
Vanguard Australian Shares Index ETFVASETF0.110.90%11.34%9.93%
iShares Yield Plus ETFIYLDETF0.12-0.42%n/an/a
iShares Enhanced Cash ETFISECETF0.120.03%0.75%n/a
SPDR S&P/ASX 200 ESG FundE200ETF0.139.75%n/an/a
iShares Core MSCI World ex Australia ESG Leaders (AUD Hedged) ETFIHWLETF0.1320.42%15.41%12.16%
SPDR S&P/ASX 200STWETF0.1310.81%10.93%9.59%
iShares Core Corporate Bond ETFICORETF0.15-3.03%n/an/a
Perth Mint GoldPMGOLDSP0.155.44%11.99%9.99%
Source: ASX | Period ending: 11 February 2022

How do the cheapest ETFs compare to the market?

The cheapest ETFs shown above delivered mixed returns in 2022. The fund with the lowest fees on the market, Vanguard's US Total Market Shares Index (VTS) returned 25.85% over the 12 months to February 2022.

It is worth noting returns have fluctuated greatly over the last couple of years.

In March 2020, the ASX 200 alone fell 37% during the initial COVID-19 outbreak, with most of the world having similar falls. However, it was also the fastest recovery we've ever had until late 2021 when technology-focused shares fell again.

As such, returns might not represent a long-term average in normal trading conditions.

A few averages worth noting (to 11 February 2022):

  • Average ETF return over 1 year: 13.69% p.a.
  • Average ETF return over 3 years: 5.49% p.a.
  • Average ETF return over 5 years: 4.94% p.a.
  • Average ETF management fee (MER): 0.49%

Choose an ETF broker to start investing

1 - 9 of 9
Name Product Brokerage on AU ETFs Inactivity fee Markets
eToro (global stocks)
N/A
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Zero brokerage share trading on US, Hong Kong and European stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
Tiger Brokers
Exclusive
Tiger Brokers
$6.49
No
ASX shares, Global shares, US shares
Exclusive to Finder: Sign up to Tiger through Finder and on completion of your first deposit of any amount or transfer of shares receive 1 extra free GoPro share. T&Cs apply.
Get started with $0 brokerage on ASX and US stocks for the first 3 months upon completion of your first qualifying deposit. Also receive a free Apple share if you deposit $3,000 or more.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
IG Share Trading
$8 or 0.1%
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
$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 shares, international shares, plus get access to 24-hour customer support.
CMC Markets Invest
$0
No
ASX shares, Global shares, mFunds, ETFs
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up 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).
Superhero share trading
$0
No
ASX shares, US shares, ETFs
Sign up & fund your account with A$100 or more and receive US$10 of Tesla stocks on Superhero. T&Cs apply.
Enjoy $0 brokerage on US stocks and buying ETFs as well as a flat $5 fee to trade Australian shares.
GO Markets Share Trading
$7.70
No
ASX shares, Forex, CFDs, ETFs
Zero Brokerage on your next 50 trades!
Simply transfer an existing HIN before 30 June and pay no fees on your next 50 transactions. Alternatively, transfer your existing shares and receive 5 transactions at zero cost for each shareholding transferred, once again up to 50 free trades. T & Cs apply
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, ETFs
Access 3,000+ ETFs on 30+ exchanges worldwide
Low fees for Australian and global ETF investing, no inactivity fees and foreign currency accounts available.
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
Get $300 free brokerage until 30 June when you move to Bell Direct. T&Cs apply.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. 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 2022, you'll notice their fees aren't necessarily the cheapest. In fact, many of the highest returning funds have management fees that are well above the average of 0.49%.

20 best performing exchange traded products in 2022
Fund nameASX codeTypeFee (% p.a)1 year total return
BetaShares Crude Oil Index ETF-Currency Hedged (Synthetic)OOOETF1.2972.46%
BetaShares Global Energy Companies ETF - Currency HedgedFUELETF0.5747.31%
BetaShares Geared US Equity Fund Currency Hedged (Hedge Fund)GGUSMF0.838.79%
Vanguard Global Value Equity Active ETF (Managed Fund)VVLUMF0.2937.20%
BetaShares Global Banks ETF - Currency HedgedBNKSETF0.5736.54%
SPDR Dow Jones Global Real Estate ESG FundDJREETF0.533.85%
BetaShares S&P 500 Equal Weight ETFQUSETF0.2931.88%
ETFS S&P 500 High Yield Low Volatility ETFZYUSETF0.3531.85%
SPDR S&P 500 ETF TrustSPYETF0.0930.90%
iShares Global 100 ETFIOOETF0.430.67%
iShares S&P 500 ETFIVVETF0.0430.43%
BetaShares Global Income Leaders ETFINCMETF0.4530.30%
VanEck Morningstar Wide Moat ETFMOATETF0.4929.82%
ETFS-NAM India Nifty 50 ETFNDIAETF0.6929.66%
iShares Core MSCI World ex Australia ESG Leaders ETFIWLDETF0.129.62%
BetaShares FTSE 100 ETFF100ETF0.4526.98%
Vanguard US Total Market Shares Index ETFVTSETF0.0325.85%
Vanguard Global Multi-Factor Active ETF (Managed Fund)VGMFMF0.3425.81%
SPDR MSCI World Quality Mix FundQMIXETF0.425.73%
VanEck MSCI International Quality ETFQUALETF0.425.20%
Source: ASX | Period ending: 11 February 2022 | 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.

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What fees do you pay when you invest in ETFs?

These are the 2 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.

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 1 underperformed the average over 5 years while all but 2 of the 15 funds outperformed over 3 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 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.

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