BetaShares Australia 200 ETF (ASX: A200) is an exchange traded fund that seeks to provide investors with capital growth and income. A200 tracks the performance of the ASX 200 Index, which is made up of Australia’s top 200 public companies listed on the ASX. In this blog post, we will take a look at how the A200 has performed over the years, as well as its dividends and competitors.
BetaShares Background
BetaShares is a very popular Australian ETF issuer that was founded in 2013. The company currently has over A$750 million worth of funds under management, making it one of the largest ETF issuers in Australia. BetaShares offers a wide range of products, including Australian and international shares, fixed income, commodities and currency.
Is A200 an ETF?
It sure is! The BetaShares A200 fund is an ETF that follows the ASX 200 Index, giving investors exposure to 200 of Australia’s top companies. For those of you new to the investing world; ETFs are investment products that allow investors to buy a slice of a basket of assets, such as shares, commodities or bonds. This makes them very convenient and easy to trade.
The Pros of Being an ETF
– Liquidity: ETFs are highly ‘liquid’ assets and can be bought and sold at any time during the trading day. This makes them a very convenient investment product for investors.
– Diversification: ETFs offer investors exposure to a range of different assets, which helps to reduce risk.
– Low Fees: ETFs typically have low management fees, making them a cost effective way to invest. More on this a little later!
Performance
Since its inception A200 has provided a very healthy return for investors. Since the fund started in 2018 it has had returns of 9.84% (after fees). Comparing this to the index which has returned 9.93% we can see that A200 has been tracking the index really well!
Do BetaShares A200 Fund pay dividends?
They sure do! A200 pays distributions quarterly with a current yield of 3.0%. because BetaShares just passes along.. or Distributes the dividends they receive from the underlying shares this yield is directly affected by how the underlying investments are performing and the dividends they pay out.
Is A200 Fully Franked?
No, but pretty bloody close! The BetaShares A200 fund pays out franked dividends, at the time of writing this is around 80% franked. For those of you new to investing Franking credits are a government incentive that is designed to encourage Australian companies to pay out after tax profits as dividends to you the investor. You can then claim these back in your tax return. Basically, it stops double tax being paid on earnings.
Management Fee
BetaShares A200 fund has a management fee (MER) of 0.07%, which is one of the lowest in the industry. This low management fee allows investors to keep more of their money compounding over time.
Can BetaShares dividends be reinvested?
Yep! Reinvesting the A200 Dividends is a great way to compound your returns over time and really speed up the process of growing your investment. The Dividend reinvestment feature has been my favorite part about using ETFs to grow my wealth, as it allows me the opportunity for growth my portfolio while not having to even think about it. Of course if you are at the stage of life where you would like to supplement or replace your income with Dividends you can have these paid out.
A200 vs VAS?
The age old battle between two legends exists even in the world of ETF’s. Which is better, VAS or A200? A200 or VAS? We’ve all heard the question before, but what are the differences between these two ETF’s?
Well first off, A200 is an Index tracking ETF which aims to track the ASX 200 index. This means that A200 gives investors exposure to Australia’s top 200 companies. Some of these companies include the big Aussie banks like Commonwealth Bank and Westpac, as well as household names such as Woolworths and BHP.
On the other hand VAS tracks the ASX 300 Index, which is Australia’s top 300 companies, so it gives investors a little more exposure to Australias biggest and best companies. A200 has kept pace with VAS since inception both on average returning just a smidge under 10% to the investors annual, but they have virtually identical fees with A200 costing 0.07% ($7 per $10,000 invested) and VAS costing 0.10% ($10 per $10,000 invested).
How do you buy BetaShares A200?
You can buy the BetaShares A200 ETF on Pearler, Commsec or SelfWealth. All of these platforms make it very easy to invest in this ETF. Due to the nature of ETFs you buy them just like any other stock, just pop in the ticker in your online trading platform and buy ’til your heart is content (or you have met your strategic financial goals.. either or!).
Is BetaShares A200 a good investment?
I have to admit, A200 is probably one of my favourite ETFs going around. So much so that I hold a significant chunk in my portfolio, and I’m not even a little bit ashamed about it! Yes like most index funds it’s a ‘yawn worthy’ investment. If you are anything like me and want a simple set and forget stock that has all of the largest companies in one place and you don’t need to thumb through quarterly earnings reports or look at charts all day then A200 might be a great stock to add to your portfolio.
In all seriousness, if you are looking for an ETF that offers great diversification, low fees and a fantastic stock selection all for the bargain price of 0.07% in management fees than A200 is definitely worth considering.