The BetaShares Australian Sustainability Leaders ETF (ASX: FAIR) and Vaneck Australian Equal Weight ETF (ASX: MVW) are top ETFs. Let’s take a quick look at both.
A look at BetaShares FAIR and the MVW ETF
The BetaShares FAIR ETF provides exposure to the largest Australian shares and focuses on companies which operate ethically. FAIR has been certified by the Responsible Investment Association Australasia (RIAA), as part of the Responsible Investment Certification Program.
The VanEck MVW ETF provides exposure to over 60 of the largest and most liquid Australian shares, equally weighted. By equally weighting shares, this ETF aims to reduce concentration risk in specific Australian stocks and sectors.
Learn more about the MVW ETF with our full analysis page. Get our MVW review.
So where do we start analysing MVW and FAIR? 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 basic and just study the fees. Based on our data for July 2021, the FAIR ETF has a management expense ratio (MER) of 0.49% while the MVW ETF’s yearly fee was 0.35%. Therefore, MVW 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.
Three-year return?
As Jerry Maguire said, ‘show me the money’. Keep in mind, performance isn’t everything — and past performance is not indicative of future performance. It’s just one part of a much bigger picture. The reason we say performance is not everything is because of volatility of financial markets and the economy from one year to the next. Some ETFs and funds can put in a positive return one year just to generate inferior 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 July 2021, the FAIR ETF had an average annual return of 13.64%. During the same time, the MVW ETF returned 11.91%.
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 FAIR fund is BetaShares. Betashares ranks highly for our scores of ETF providers and issuers in Australia. We believe BetaShares is one of the leading providers of index and non-index style products to retail investors in Australia. Meanwhile, the company responsible for MVW 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.
Next steps
Don’t forget our free reviews on ASX FAIR and ASX MVW.
For us, the MVW ETF rates fairly better against our internal scoring methodology, but only just.
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…
