A200 ASX BetaShares Australian market Solactive ASX 200 (ASX:A200) ETF review from an experienced and long term index investor.
Betashares A200 ASX ETF tracks the Solactive Australia 200 index, which is the top 200 Australian publicly traded companies by market cap according to the Solactive index. It is the lowest cost option for an index fund ETF exposure to the Australian Share market, and has also slightly out performed competing Australian index fund ETFs.
- Lowest MER of all Australian index funds at 0.07%
- Does not contain derivatives
- Typically returns a strong dividend
- The dividends come with franking credits
- High liquidity – easy to buy or sell shares
- Diversification – 200 of the largest Australian shares listed on the ASX
- Run by a for-profit company (Betashares) as opposed to a not-for-profit company (Vanguard)
- Doesn’t contain small caps
- High dividend yield might not be tax effective in the accumulation phase for those with high incomes
Verdict: A200 is a cost-effective Exchanged Traded Fund that tracks the Australian share market index using the Solactive Australia 200 index. Ensure you read the product disclosure statement.
The Betashares A200 ASX ETF was founded on the following benefits;
Low Cost – management costs of .07% p.a account fees, the lowest cost Australian shares available on the ASXBetaShares
Portfolio Diversification – in a single ASX trade, investors gain exposure to the largest 200 companies listed on the ASX
Physically backed – funds hold physical securities that comprise the index – no derivatives used for index tracking
Transparent – portfolio holdings, value of the funds assets and net asset value per unit available daily on the BetaShares website
Liquidity – available to trade on the ASX like any share
Betashares is an Australian-based company that provides funds management for specialist Exchange Traded Funds (ETFs). Betashares was started in 2013 and is owned by the ‘Mirae Asset Global Investment Group’. Mirae Asset Global Investment Group is one of the largest asset managers in Asia, managing in excess of USD $50 Billion, of which USD $7 Billion is in ETFs. Betashares offers a variety of specialist ETFs, including Australian and international shares, Fixed income bonds, commodities, money markets (currencies), as well as specialist ETFs such as the ‘BBOZ’ and ‘BEAR’ short funds.
A200 ASX fund details
The A200 investment objective is to track the Solactive 200 Index of Australian shares. This is slightly different to the S&P ASX 300 index, in that it does not include companies from 201-300 on the index.
A200 Sector allocation
Due to the higher weighting by market cap of financials, materials (mining) and healthcare in the index, this is shown in A200’s sector allocation above. A200 also invests heavily in energy, industrials and real estate which are all huge parts of the Australian economy.
A200 top 10 exposures
A200 has its top 10 holdings in Commonwealth Bank, CSL construction Limited and BHP, reflecting the sector allocation as per the index. The top 5 exposures make up just over 30% of the portfolio, and the top 10 making up 44.5%. These blue chips that make up a higher percentage of the portfolio are good, stable earners which typically produce strong dividends.
Performance of A200 ASX
The sharesight share checker shows had you held A200 since inception, you would currently have a total return of 7.16%.
The Capital value of the share price of A200 will also steadily track the index, and should expect to see growth as per the index over time as the Australian economy grows. On the graph below you can see the drop due to COVID-19, and the fairly quick recovery.
A200 has produced a significant dividend yield recently, with a whopping 6.7% trailing 12-month dividend yield (8.8% when grosses up with the 73% of franking credits distributed). An investor following a Thornhill style dividend investing approach, this allows you to safely draw on your portfolio using the 4% rule from dividends alone (no need to sell any parcel of shares – not that that is a bad thing), plus surplus to reinvest into future shares.
All previous distributions are shown below
A200 versus other funds
There are several options for an Australian shares index tracking ETF;
- A200 (Betashares)
- VAS (Vanguard)
- IOZ (iShares – BlackRock)
- STW (State Street Corporation)
These are probably best described as ‘Variations of a common theme’ as for all intents and purposes they do the same thing. They are, however, all provided by different Exchange Traded Fund providers – BetaShares, Vanguard, BlackRock and State Street Corporation.
Now that we have seen the performance of all of these index funds is roughly similar (and that the Betashares A200 fund shos the best investment return over this small time period), lets focus next on what the other indexes track and a fee comparison
A200 vs VAS
Similar to the discussion between US ETFs VTS (Vanguard) and IVV (BlackRock iShares), there is a choice to be made in the Australian market between the Vanguard offering VAS and the Betashares offering A200. VAS historically had twice the management fee of A200, but given Vanguard recently reduced this to a MER of.10% which makes it a more attractive option, albeit still more expensive than Betashares A200.
A200 is still cheaper in terms of management fees, but it is worth noting each ETF actually tracks a slightly different index: VAS tracks the S&P ASX 300 index vs A200 which tracks the Solactive 200 index; Meaning with the Vanguard VAS offering you are getting an additional 100 smaller companies included in the index.
A200 vs IOZ
A200 and IOZ are both index funds that track the Australian market top 200 companies by market cap; however IOZ uses the more popular Standards and Poors (S&P) ASX 200 index, whereas A200 uses the ‘Solactive Australia top 200 index’ (which is calculated slightly differently). IOZ has a MER of 0.09%, which is more expensive than A200 which has a MER of 0.07%.
A200 vs STW
The STW ASX index fund by State Street Corporation tracks the Standards & Poors ASX 200 index (similar to IOZ), with a MER of 0.13%, making it the most expensive option for a basic Australian index tracking ETF. Betashares A200 with its MER of 0.07% is nearly half the price! STW is an older ETF, and was the first offering for an Australian share index tracking ETF.
A200 is a simple, low-management fee Aussie ETF that gives investors exposure to the Australian share market. It contains the top 200 Australian publicly traded companies by tracking the Solactive 200 index. A200 passes on all dividends to its shareholders due to the trust structure, and the capital growth of its portfolio is reflected in the growing A200 share price.
I hold A200 as a part of my core ‘three fund’ index ETF portfolio. However, just because I have a particular investment doesn’t automatically make it appropriate for you to copy me. You should do your own research and ensure it is appropriate to your circumstance and risk tolerance – if you get stuck, chat to a licensed financial advisor about sorting out your investments.
Frequently Asked Questions about ASX A200
Answers to frequently asked questions about the Betashares ASX A200 Exchange Traded Fund
What is the A200 management fee?
The Betashares ASX A200 ETF has a management fee of 7 basis points, or 0.07% per annum. On a $10,000 investment, this amounts to $7 per year. This is incredibly cheap and is the lowest of all Australian ETFs.
What is the ASX A200 dividend yield?
The Betashares ASX A200 ETF has had an annualised dividend yield of approximately 4% (plus franking credits which gross this up to approx 6%) according to Sharesight.
You can invest in Betashares A200 ETF through any Australian based stock broker or share trading platform, such as Pearler, Stake or Commsec.
Is A200 fully franked?
A200 ASX ETF is approximately 80% franked, meaning you will get franking credits (tax credits) for 80% of the dividend distribution which has already paid corporate tax rates.
Is A200 an index fund?
Yes, A200 ASX is an index fund that tracks the Solactive Australia 200 index.
Is VAS or A200 better?
A200 has lower management fees with a MER of 0.07% vs VAS which has a MER of 0.10%. Both ETFs have had similar returns, but A200 has been ever so slightly better. There really isn’t much of a difference between VAS or A200.
Is A200 a good buy?
This depends on what kind of investor you are. A200 ASX ETF is an open-ended Exchange Traded Fund which means it always trades around fair value (market value = net asset value) due to the involvement of a market maker. If you are a long term investor and believe the economy will grow over time, then A200 would be a good buy for you. Make sure you read the product disclosure statement
Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!
I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.
I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted. When it comes to investments, past performance is no indicator of future performance as returns can be volatile, reflecting rises and falls of the underlying investments.
Remember – you always need to do your own independent research and due diligence before making any transaction. This includes reading and analysing Product Disclosure Statements, Terms and Conditions, Service Arrangement and Fee Structures. It is always smart to compare products and discuss them, but ultimately you need to take responsibility for your use of any particular product and make sure it suits your personal circumstances. If you need help and would like to obtain personal financial advice about which investment options or platforms may be right for you, please talk to a licensed financial adviser or AFSL holder – you can take the first steps to find a financial advisor by reading this interview, or by visiting the ASIC financial adviser register and searching in your area.
Captain FI is a Retired Pilot who lives in Adelaide, South Australia. He is passionate about Financial Independence and writes about Personal Finance and his journey to reach FI at 29, allowing him to retire at 30.
4 thoughts on “A200 ASX – BetaShares Solactive ASX 200 (ASX:A200) ETF review”
Love your work Captain FI, but wouldn’t you be subject to capital gains tax when you sold your VAS to roll over into A200?
Hey Jamie, absolutely right if you had capital gains. When I sold my VAS shares, they had actually made a small loss due to the market downturn. Since VAS and A200 are pretty much the same thing in my mind, the market being down didn’t matter because as soon as I got out of one, I was instantly in the other one. To be honest though, it doesn’t really make much of a difference at all and much bigger gains are made by cutting your spending a bit. But because I was overthinking it and being pedantic, A200 is technically the lower management fee haha
Fair enough captain, I assumed that you had a capital gain (never assume!!!), when in fact you had a capital loss. So yeah, if you can make a swap for essentially the same product but with a lower management fee – why not! I probably would have done the same. Cheers mate, and keep up the good work 👍
Thanks Jamie, not the best outcome having a capital loss but convenient timing to tinker hey! Although moving forward, my main goals are to diversify my holdings a bit more away from just A200 and so I am looking to bolster the VTS and VEU holdings, as well as any good Aussie LICs when they pop up below value.