Most Popular ETFs In Australia

Last Updated on 20 February 2024 by Ryan Oldnall

It is a well-asked question, and for most people, the first ETF that comes to mind is Vanguard Australian Shares Index ETF, VAS, and you would be right. VAS is by far the most popular ETF in Australia, and we’ll explore a few different metrics in this popularity contest.

In this article, we will delve into an ETF’s popularity from a few different angles using snapshot November ASX data [1]. These metrics will include Assets under Management (AUM), changes to AUM in one month, and the number of trades performed.

Most Popular ETFs In Australia by AUM

It comes as no surprise that Vanguard Australian Shares Index ETF, VAS, is Australia’s most popular ETF when looking at AUM. VAS has a staggering $13.12 billion worth of assets under management.

This is double the value of the next most popular Vanguard MSCI Index International Shares ETF, VGS, which stands at $6.33 billion. VGS, being one of Vanguard’s flagship products, also provides exposure to approximately 1500 holdings.

iShares Core S&P 500 ETF, IVV, which tracks the US S&P 500 (the largest 500 listed companies in America), comes close behind VGS with $6.22 billion. This will likely come as little surprise for those that invest in ETFs, with IVV being a ‘core’ holding for many.

Australians love to invest in their own backyard, and that is evident with SPDR S&P/ASX 200, STW, and iShares Core S&P/ASX 200 ETF, IOZ, having $4.56 billion and $4.46 billion invested in them.

VanEck MSCI International Quality ETF, QUAL, is the only VanEck product on this list. QUAL gives investors exposure to a diversified portfolio of quality international companies listed on exchanges in developed markets around the world (excluding Australia). QUAL has $4.17 billion worth of assets under management.

BetaShares Australia 200 ETF, A200, has gained in popularity, as we will see from the other metrics upcoming. A200 currently has $3.68 billion worth of AUM. A200 is also known for having the lowest ETF management expense ratios on the ASX at just 0.04%.

Vanguard US Total Market Shares Index ETF AUD, VTS, currently has $3.63 billion invested within it at the time of writing. VTS is different from all those listed in this top 10. VTS is very popular among ASX investors but is not actually domiciled in Australia.

VTS is domiciled in the US, so this means Australians must complete a W8-BEN, which is essentially a tax document for non-US taxpayers who earn US-sourced income. This does make tax time more tricky, so it is not for everyone.

Lastly, we have BetaShares Nasdaq 100 ETF, NDQ, and BetaShares Australian High Interest Cash ETF, AAA. NDQ has been the highest-performing ETF over the last 5 years, which I analyzed in this article. NDQ currently has $3.63 billion worth of AUM, with AAA having $3.43 billion.

For those not familiar with AAA, its objective is to offer exposure to Australian cash deposits, delivering monthly income distributions that outperform the 30-day Bank Bill Swap Rate (BBSW) after deducting fees and expenses.

The fund allocates assets to deposit accounts maintained with chosen banks in Australia, aiming to generate income on cash deposits. This income is disbursed monthly at a rate that competes favorably with both ‘at-call’ bank deposits and term deposits [3].

Most Popular ETFs In Australia by Changes in AUM

Most Popular ETFs In Australia - Changes in AUM

VAS again takes the top spot for the highest dollar value change in AUM. VAS increased its AUM by $811.04 million in the month of November. This was followed by IVV, which had a $377.28 million upswing.

A200 saw a significant uptick of $339.70 million, and BetaShares Global Shares ETF, BGBL, also made a notable contribution with a surge of $311.94 million.

BGBL is designed to replicate the performance of an index (prior to considering fees and expenses), providing exposure to around 1,500 companies from developed markets across more than 20 countries, excluding Australia [4].

NDQ experienced a robust investment uplift of $306.40 million in November, closely followed by BetaShares Global Shares Currency Hedged ETF, HGBL, and Vanguard MSCI Index International Shares (Hedged) ETF, VGAD.

HGBL is essentially the currency-hedged version of BGBL, aiming to hedge against currency fluctuations to the Australian dollar. Similarly, VGAD serves as the hedged version of VGS, providing investors with a strategy to mitigate the impact of currency fluctuations on returns.

Vanguard Australian Property Securities Index ETF, VAP had a $273.98 million change in the month of November. VAP aims to replicate the performance of the S&P/ASX 300 A-REIT Index. This exchange-traded fund offers a cost-effective means of investing in property securities that are publicly listed on the Australian Securities Exchange (ASX).

The ETF’s investment portfolio encompasses various property sectors such as retail, office, industrial, and diversified holdings. By doing so, it provides investors with exposure to the returns generated by the Australian real estate investment trust (A-REIT) market [5].

Lastly, QUAL had a $266.64 million change in November, which was followed by iShares S&P 500 (AUD Hedged) ETF, IHVV, with $218.08 million. IHVV is the hedged version of IVV.

Most Popular ETFs In Australia by Number of Trades

Most Popular ETFs In Australia - Number of trades

When you look at the number of trades again, it comes as little surprise that VAS is the most traded ETF. In this data, which is November 2023, VAS was traded 43,000 times. The next most popular were VGS and NDQ with 24k trades, closely followed by IVV with 23k trades.

The ASX 200 ETFs of IOZ and A200 were traded 19,000 and 18,000 respectively. This was followed by Vanguard Australian Property Securities Index ETF (VAP) with 12,000 trades.

In the month of November, both the Vanguard Diversified High Growth Index ETF (VDHG) and the iShares Global 100 ETF AUD (IOO) were each traded 12,000 times. VDHG, positioned as an ETF suitable for a ‘set and forget’ approach, allocates its investments across seven Vanguard ETFs [6].

In contrast, IOO offers exposure to a diverse range of large international companies in both developed and emerging markets, providing investors with access to 100 of the largest global stocks through a single fund [7].

Finally, there’s another Vanguard ETF to consider, VHY, which stands for Vanguard Australian Shares High Yield ETF.

VHY is particularly popular among investors looking for dividend income, as its underlying holdings are selected based on their high dividend-paying potential. This ETF caters to those seeking a reliable source of dividends.

Summary – So, Who Emerged as the Most Popular?

Certainly, VAS undeniably emerges as the leading performer among ASX-listed ETFs. With a substantial $13.2 billion in assets under management, 43,000 trades executed in November, and an impressive increase of $811.04 million in Assets under Management during the same month, it firmly holds the title of the most favored.

Following closely, VGS manages approximately $6.33 billion in assets and records 24,000 trades in November.

It’s crucial to emphasize that an ETF’s popularity doesn’t necessarily equate to its performance. While it’s valuable to be aware of investors’ preferences for specific ETFs, individual choices and objectives differ.

Hence, it is recommended to conduct thorough research and invest in ETFs that align with your specific circumstances, goals, and objectives.

This article does not serve as an endorsement or recommendation for products mentioned in the article. The information presented here is based on referenced sources and is accurate as of the date of December 31, 2023. Please note that these articles are written sometime before their publication date.

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