A simple review of the VAS and FAIR ASX ETFs

Now could be the right time to run the rule over the Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australian Sustainability Leaders ETF (ASX: FAIR). Using our internal quantitative analysis, these ETFs appear to offer good exposure to the Australian shares sector.

What do they do?

The Vanguard VAS ETF provides exposure to the largest 300 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.

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.

To learn more about the VAS ETF, read our free ETF investment report once you’re done with this article.

a gif of 4 etf reports

ASX: VAS or ASX: FAIR price performance

To make this article easier to digest, we’ll just study the fees or ‘management expense ratio’ (MER). Using data for December 2021, the VAS ETF has an MER of 0.10% while the FAIR ETF had a yearly fee of 0.49%. As a result, VAS comes out on top. Keep in mind, a more useful metric to know is the fee quartiles that these ETFs find themselves in (note: quartile 1 is best). Meaning, we take all the Australian shares ETFs in our database and divide them into 4 quartiles, based on their fees. For example, any ETF which has a fee below 0.3% would be considered in our first (best) quartile.

Performance analysis

Performance is important. 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 good return one year just to generate poor 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 2021, the VAS ETF had an average annual return of 15.33%. During the same time, the FAIR ETF returned 15.22%.

Lastly, we need to consider the issuer or provider of the ETF. There are too many factors that go into our internal scoring of fund providers to detail here (you’d get bored pretty quickly). So here’s the quick version. As you guessed, the issuer of the FAIR ETF 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.

Our takeaway

To keep reading about these two ETFs, be sure to visit our free VAS ETF report or FAIR ETF review.

For us, the VAS ETF ranks more compelling for our internal scoring methodology but not by much.

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 2022 in a free report. Keep reading to find out how to get our analyst’s report emailed to you right now…

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