Is SPDR STW ASX 200 ETF (ASX:STW) a great long-term buy idea?

Could SPDR S&P/ASX 200 (ASX: STW) be a really great long-term buy idea?

What is SPDR S&P/ASX 200?

The exchange-traded fund’s (ETF’s) goal is to match the returns of the S&P/ASX 200 Index.

The businesses in the ASX 200 are 200 of the biggest ASX shares around. It essentially measures most of the ASX share market.

As you’d expect, it owns around 200 holdings. The biggest exposures are to the largest businesses in Australia.

The biggest ten are: Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), Macquarie Group Ltd (ASX: MQG) and Rio Tinto Limited (ASX: RIO).

I’m sure you’ve heard of most, if not all, of the above businesses.

As you can probably guess from the biggest holdings, financials and materials makes up around half of the whole STW ETF portfolio.

Is it a good long-term buy idea?

One of the most important things to know about each ETF is the management costs – this has an annual fee of 0.13%. That’s attractive because it means that investors get to keep most of the returns, rather than handing it over to fund managers.

However, an ETF can only perform as strongly as its underlying holdings. STW ETF has done okay, but not great, over the last five years. It has made an average net return per annum of around 10% over that 5-year period.

Due to the composition of the holdings, a substantial portion of the returns each year are from dividends.

If you’re just wanting low cost exposure to the ASX blue chip shares then STW ETF is one of the best ways to get it. But the current holdings are not likely to produce strong returns over the next few years.

There are other ETFs that may be able to provide strong returns and capital growth, even if the income isn’t as good initially.

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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.

CLICK HERE TO GET THE REPORT

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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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