A200 PDS
The Product Disclosure Statement (PDS) explains the fees, tax status and some of the risks.
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The Betashares A200 ETF provides exposure to the largest 200 Australian companies, based on market capitalisation. Unlike many other Australian shares ETFs, A200 uses the Solactive Australia 200 Index. This is virtually the same thing as the indices provided by S&P/ASX, as it also uses a market capitalisation weighting.
The Betashares Australia 200 ETF (ASX: A200) is one of Australia’s largest shares ETFs with over $2 billion of investments as of October 2022. The largest ETF in this sector is the Vanguard Australian Shares Index ETF (ASX: VAS), with $11 billion.
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Betashares currently holds the title of the cheapest or lowest-cost Australian shares ETF, coming in at just 0.07% per year. On a $10,000 investment into A200, that’s just $7 of management fees — talk about tiny.
A200 is relatively unique amongst the major Aussie shares ETFs because it uses an ETF provided by Solative, whereas most ETF providers have chosen indices offered by Standard & Poor’s (S&P). This isn’t such a big deal because A200 follows a market-capitalisation-weighted strategy, meaning A200’s portfolio is almost exactly the same as two of the competing ETFs – IOZ and STW. I suspect the reasons the Solative index was chosen was because it was available and maybe even cheaper to replicate (index providers charge ETF providers to follow their index).
The key alternative Australian shares ETFs to A200 are as follows:
The A200 ETF can be used by investors to get exposure to Australian shares/equities, with a tiny cost per year (0.07%). Basically, buying A200 is like ‘owning the market’ for next to nothing. This is one reason why A200 has proven to be so popular.
Given A200’s focus on the top 200 Australian shares, A200 captures limited exposure to the small and medium-sized companies on the ASX. That is, the companies ranked outside the top 200.
With low costs, diversification, dividend income and franking credits, it’s easy to see why A200 is one of the most popular ‘Core’ ETFs in Australia.
It should be noted that if you own similar ETFs, such as A200, STW, IOZ or MVW, you’re going to have a lot of ‘overlap’ in your portfolio if you own more than one of these ETFs.
If you’re comparing A200 to other index fund shares ETFs, its risk level should be relatively the same.
However, compared to bond ETFs, A200 will be riskier (volatile).
Compared to sector-specific ETFs or thematic ETFs (e.g. ACDC, CLNE. HACK, etc.) A200 should be slightly less risky over a full market cycle given it’s diversified across sectors and company types.
Given it is an Australian shares ETF, investors should consider A200 as part of the ‘risk on’ side of a portfolio and seek to hold the ETF for a minimum of 7 years to ensure the portfolio is given time to produce results in most market environments.
Yes. A200 will pay or ‘pass through’ the franking credits it receives from its holdings. If you’re especially focused on fully franked dividend income you might try something like the VHY ETF (from Vanguard) as either a complement or replacement to A200.
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Cheers!
Owen Raszkiewicz
Founder of Best ETFs Australia, lead analyst of Rask Core
The Betashares A200 ETF invests in Australian shares, which offer growth and income potential. You could buy all of these companies yourself using a share brokerage account, but that would be a very expensive and time-consuming process. ETFs are an effective way to invest in an entire sector through a single trade.
The Betashares A200 ETF could be used by investors to gain exposure to a diversified basket of Australia’s largest public companies, which are likely to grow their profit over time and pay regular dividends to their shareholders.
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*The warnings on this page are applied by our ETF research team. Please know that these warnings are based on quantitative metrics and our internal methodology. These risks are not exhaustive and therefore they should not be relied upon. Always read the PDS of the function and speak to your financial adviser before acting on this information.
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