Best Australian Share Exchange Traded Products: Best of the Best
Investors can share in the success of Australia's biggest household names
SPDR S&P/ASX 50, the large-cap Australian ETP, gives investors access to the 50 biggest and most liquid shares listed on the ASX. As well, the winning ETP provides exposure to the big dividend payers such as the four banks, BHP, CSL and Telstra.
The SPDR fund paid out a dividend yield of 5.58% over the year to the end of September 2019. The rest of the 15% return was capital growth and realised capital gains.
The ETP is one of the oldest on the ASX, having been launched 18 years ago. It pays out a quarterly income and charges a fee of 0.28%. If you had invested $10,000 in 2001, it would have been worth $43,131 at the end of September 2019.
In second place is the BetaShares FTSE RAFI Australia ETP, which has a novel approach to the top 200 Australian companies by weighting them according to a number of "fundamental" factors rather than their market cap. The index has been built by Research Affiliates, a developer of fundamental index products.
In third place, the VanEck Vectors Australian Equal Weight ETP is a rules-based fund. It tracks a specially designed index and invests in the 60 largest and most liquid ASX-listed companies across all sectors, and weights them equally. This approach is designed to reduce concentration risk to sectors such as financials and resources because it is indifferent to market capitalisation.
The ETP has benefited from a lower weighting to the big four banks and AMP, which have been hit hard by the damning revelations from the royal commission into misconduct in banking, superannuation and financial services. It charges a fee of 0.35%.