3 quick reasons I like the A200 ETF

There are a few quick reasons why I like BetaShares Australia 200 ETF (ASX: A200).

About A200

You may have already guessed that A200 is invested in 200 Australian businesses. That means it offers a good amount of diversification. The biggest positions in the ETF are the biggest in the ASX 200 – which is what the ETF is essentially tracking.

Its largest holdings are businesses like CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

Other similar ETFs

It’s not the only ETF that looks to essentially track the returns of the ASX. There are other examples like Vanguard Australian Shares Index ETF (ASX: VAS) and iShares Core S&P/ASX 200 ETF (ASX: IOZ).

How has the ETF performed?

 

Source: Best ETFs A200 1-year share price chart.

COVID-19 caused a lot of difficulties for some of A200’s biggest holdings. Particularly the big four ASX banks like Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).

Including dividends, A200 has seen a negative return of -5.38% over the past year and a positive return of 3.76% per year since inception on 7 May 2020.

Why I like it

There are three reasons.

First, it offers good diversification. Owning a piece of 200 businesses is a lot better diversification than a portfolio of just four big banks, Telstra and perhaps a miner or two.

Second, it’s very cheap. It has an annual management fee of just 0.07%, which is the cheapest that Aussie investors can get.

Third, it may have a relatively large dividend yield once COVID-19 impacts pass. ASX shares are known for being big dividend payers.

But there are plenty of other ETFs out there, some have much better capital growth prospects. Check out our list of ASX ETFs for other ideas (just search for ASX ETF).

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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