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The cheapest ETFs on the ASX

The cheapest ETF has an annual fee of 0.04% with average returns of 10.77% 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%36.45%15.51%16.20%
iShares S&P 500 ETFIVVETF0.04%36.72%17.14%16.68%
Betashares Australia 200 ETFA200ETF0.04%18.25%11.29%10.77%
SPDR S&P/ASX 200STWETF0.05%18.64%11.32%10.55%
iShares Core S&P/ASX 200 ETFIOZETF0.05%18.28%11.23%10.48%
SPDR S&P/ASX 200 ESG FundE200ETF0.05%17.91%11.56%n/a
iShares S&P Midcap ETFIJHETF0.07%29.50%11.83%13.06%
iShares S&P Small-Cap ETFIJRETF0.07%20.41%6.95%10.40%
Vanguard Australian Shares Index ETFVASETF0.07%18.38%10.77%10.56%
iShares Core Cash ETFBILLETF0.07%4.27%2.11%1.54%
Betashares Global Shares ETFBGBLETF0.08%n/an/an/a
Vanguard All-World ex US Shares Index ETFVEUETF0.08%19.39%7.64%8.20%
SPDR S&P 500 ETF TrustSPYETF0.09%38.16%17.27%16.93%
iShares Core MSCI Australia ESG ETFIESGETF0.09%22.56%n/an/a
iShares Core MSCI World ex Australia ESG ETFIWLDETF0.10%36.70%16.49%15.04%
iShares S&P 500 AUD Hedged ETFIHVVETF0.10%30.79%9.04%12.01%
Vanguard Australian Fixed Interest Index ETFVAFETF0.10%1.60%-1.33%0.01%
iShares Core Composite Bond ETFIAFETF0.10%1.46%-1.42%0.00%
SPDR S&P/ASX Australian Government Bond FundGOVTETF0.10%0.60%-2.17%-0.61%
Betashares Global Shares Currency Hedged ETFHGBLETF0.11%n/an/an/a
iShares Yield Plus ETFIYLDETF0.12%5.36%1.96%n/a
Source: ASX | Period ending: 31 Mar 2024

How do the cheapest ETFs compare to the market?

According to the latest data, the cheapest ETF in Australia is the Vanguard US Total Market Shares Index ETF. It returned 36.45% over the 12 months to 10 April 2024.

You can compare this favourably to the performance of the S&P 500, which grew 8.19% in the 12 months to February 2024. The Nasdaq grew 7.72% in the same period.

A few averages worth noting (to 31 March 2024):

  • Average ETF return over 1 year: 17.78% p.a.
  • Average ETF return over 3 years: 6.11% p.a.
  • Average ETF return over 5 years: 7.03% p.a.
  • Average ETF management fee (MER): 0.55% p.a.

Finder survey: How often do Australians trade stocks or ETFs?

Response
Ad-hoc41.32%
Monthly29.04%
Yearly17.37%
Weekly11.38%
Daily0.9%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023

Choose an ETF broker to start investing

Name Product Brokerage on AU ETFs Inactivity fee Asset class
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Moomoo Share Trading
$3
$0
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. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Tiger Brokers
Exclusive
Tiger Brokers
$5.50
$0
ASX shares, Global shares, US shares, ETFs
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Webull
$4.90
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Sign up & deposit $200 to get $100 of rewards value, or deposit $1,000 to get $200 worth. Up to $5,450 value available. 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.
Saxo Invested
Saxo Invested
$3
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Access 6,400 ETFs over 30 exchanges worldwide
Low fees for Australian and global ETF investing, no inactivity fees and foreign currency accounts available.
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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 does the cheapest compare to the best?

While cheaper fees tend 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 2024, 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 0.55%.

20 best performing exchange traded products in 2024

Fund nameASX codeTypeFee (% p.a)1 year total return
Betashares Crypto Innovators ETFCRYPETF0.67159.88%
Global X Ultra Long Nasdaq 100 Hedge FundLNASMF1102.57%
Betashares Global Uranium ETFURNMETF0.6976.31%
Global X FANG+ ETFFANGETF0.3575.06%
Global X Semiconductor ETFSEMIETF0.5772.85%
Betashares Geared US Equity Fund Currency Hedged (Hedge Fund)GGUSMF0.870.96%
Global X Uranium ETFATOMETF0.6961.67%
Montaka Global Extension Fund (Quoted Managed Hedge Fund)MKAXMF1.2556.47%
Hyperion Global Growth Companies Fund (Managed Fund)HYGGMF0.756.29%
Loftus Peak Global Disruption Fund (Managed Fund)LPGDMF1.255.99%
Betashares Japan ETF - Currency HedgedHJPNETF0.5655.16%
VanEck Global Listed Private Equity ETFGPEQETF0.9253.37%
Montaka Global Equities Fund (Managed Fund)MOGLMF1.3252.32%
Munro Climate Change Leaders Fund (Managed Fund)MCCLMF0.949.68%
Betashares NASDAQ 100 ETFNDQETF0.4848.12%
Munro Concentrated Global Growth Fund (Managed Fund)MCGGMF0.745.96%
Betashares S&P/ASX Australian Technology ETFATECETF0.4844.57%
Betashares Metaverse ETFMTAVETF0.6943.93%
Magellan High Conviction Trust (Managed Fund)MHHTMF1.541.79%
Betashares NASDAQ 100 ETF - Currency HedgedHNDQETF0.5141.57%
Source: ASX | Period ending: 31 March 2024 | 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 also show is that fees are not the only consideration worth thinking about – and for some investors, not the most important.

More ETF news

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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