Here are two ETFs for exposure to Australian shares: VLC & STW

What are top Australian shares ETFs for 2022? We think the SPDR S&P/ASX 200 ETF (ASX: STW) and Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) ASX ETFs could be worthy of closer inspection. Here’s why…

Popping the hood on these 2 ETFs

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.

The Vanguard VLC ETF provides exposure to the MSCI Australian Shares Large Cap Index. This index is a ‘free float-adjusted market capitalization index’ which provides investors with exposure to the largest companies on the ASX.

Keep learning about the VLC ETF on our free report page. See the ASX VLC review.

a gif of 4 etf reports

In addition to using our years of experience analysing ETFs, there are simple tricks any investor can use to compare similar ETFs.

The first is fees. Our team uses quant methods to score ETFs based on its fees and costs, then we slice and dice across sectors, strategy types and providers.

We’ll keep it easy and just study the fees. Based on our data for July 2022, the STW ETF has a management expense ratio (MER) of 0.13% while the VLC ETF’s yearly fee was 0.20%.So STW comes out on top. 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. 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 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 July 2022, the STW ETF had an average annual return of 6.48%. During the same time, the VLC ETF returned 7.78%.

Too long, didn’t read (TL;DR)

Did you know we have free reports? View our ASX STW review and ASX VLC review today.

In summary, the STW ETF rates higher for our internal scoring methodology but not by much compared to VLC.

Please, keep in mind, there is much more to selecting a good ETF. That’s why you should now use these skills to find the best ETF you can. If you want the name of our team’s top ETF pick for 2022, keep reading…

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report, and 24/7 access to the Rask community, for FREE by CLICKING HERE NOW or the button below.

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