Are MVW & STW worth a closer look in 2024?

Now could be an opportune time to run the rule over the Vaneck Australian Equal Weight ETF (ASX: MVW) and SPDR S&P/ASX 200 ETF (ASX: STW). Using our internal quantitative analysis, these ETFs appear to offer solid exposure to the Australian shares sector.

Getting to know the STW and MVW ETFs

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.

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.

Note: you can continue learning about the STW ETF on our report page. ASX STW report.

a gif of 4 etf reports

ASX: MVW or ASX: STW price performance

To make this article easier to digest, we’ll just study the fees or ‘management expense ratio’ (MER). Using data for July 2022, the MVW ETF has an MER of 0.35% while the STW ETF had a yearly fee of 0.13%. So, STW wins on this metric. Keep in mind, a more helpful 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 separate 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.

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 MVW ETF had an average annual return of 5.62%. During the same time, the STW ETF returned 6.48%.

Best ETFs Takeaway

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

For us, the STW ETF rates positively 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 2024 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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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.

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