A look at Vaneck GRNV and the STW ETF
For a diversified portfolio of sustainable Australian companies, the VanEck GRNV ETF may be of interest. This ETF focuses on Australian companies that have high environmental, social and governance (ESG) performance, based on MSCI ESG Research. GRNV has been certified by the Responsible Investment Association Australasia (RIAA), as part of the Responsible Investment Certification Program.
The SPDR STW ETF is Australia’s first ETF and has been operating for over 15 years. STW provides exposure to the largest 200 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
Learn more about the STW ETF with our full analysis page. Get our STW review.
So where do we start analysing STW and GRNV? In addition to using our years of experience analysing ETFs to ‘get a feel’ for the ETF, there are simple checks and balances our team uses to compare similar ETFs.
The first is fees. We score ETFs based on their management fees and costs and we take into account the spread. We’ll then compare these ‘all in’ fees and costs across sectors, strategy types and ETF providers.
We’ll keep it easy and just study the fees. Based on our data for December 2020, the GRNV ETF has a management expense ratio (MER) of 0.35% while the STW ETF’s yearly fee was 0.13%. Therefore, STW wins on this one. That said, a more useful metric to know is the fee quartiles that these ETFs find themselves in (note: quartile 1 is best). For example, any ETF which has a fee below 0.3% would be considered in our first (best) quartile.
How do they perform?
Performance matters. But it’s not everything — and past performance is not indicative of future performance. Indeed, it’s just one part of a much bigger picture. The reason we say performance is not everything is because of the volatility of financial markets and the economy from one year to the next. Some ETFs and fund can put in a solid return one year just to generate lacking returns the next time around. That’s why we prefer three-year or seven-year track records over one-year track records. It can smooth out the temporary performances caused by external factors. Both ETFs have achieved our three-year performance hurdle. As of December 2020, the GRNV ETF had an average annual return of 8.42%. During the same time, the STW ETF returned 8.00%.
There’s one more important thing to consider: the company that starts and runs the ETF. They are in charge of operating the ETF on the ASX. The provider of the GRNV fund is Vaneck. VanEck ranks highly for our scores of ETF providers and issuers in Australia. Our team considers VanEck to be one of Australia’s leading providers of specialised ETFs and funds for retail investors and advisers. Meanwhile, the company responsible for STW is SPDR. SPDR ranks highly for our scores of ETF providers and issuers in Australia. We think SPDR is one of Australia’s top 10 ETF providers for advisers and institutions, and its ETFs on the ASX provides good exposure to particular financial markets for retail investors.
For us, the STW ETF rates positively against our internal scoring methodology, but only just ahead of STW.
We hope this article helped you analyse ETFs. Don’t forget, there’s a lot more to investing well than what we just outlined (risks, diversification, other potentially better ETFs, etc.). Our analyst team at Rask Australia spends months looking at new ASX investments (it’s our day job!). To make your life easier, you can get the name of our team’s top ETF pick for 2021 in a free report. Keep reading to find out how to get our analyst’s report emailed to you right now…