ETF Please school me on Betashares A200 Vs Vanguard VAS

Discussion in 'Shares & Funds' started by PKFFW, 3rd Nov, 2018.

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  1. PKFFW

    PKFFW Well-Known Member

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    My wife and I have finally gotten everything sorted and are now in a position to begin investing. We'll be lump summing a significant amount of money and the final decision is whether to go with A200 or VAS for the Aussie Index ETF part of the portfolio.

    The obvious temptation with Betashares A200 is the 0.07% MER.

    So I'd like to know who would NOT go with A200 and why? I'm keen to hear of the negatives and black spots I may have missed regarding A200 and the advantages of VAS.
     
  2. willair

    willair Well-Known Member Premium Member

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    Just type in VAS in the search section..
    Or CBA -NAB TLS BOQ BHP there is a long list within this site as most are too focused on the outcome -and not the process..
     
  3. Befuddled

    Befuddled Well-Known Member

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    • VAS (and Vanguard for that matter) is an industry leader with a long track record of serving the investor's best interest. BetaShares is a reasonably new, and much smaller player
    • A200 has around 240m in funds under management. VAS has 13billion. VAS being bigger might have better liquidity.
    • Current MER is not future MER. Don't know if BetaShares is doing this temporarily to attract inflows. VAS's MER has been coming down since inception.

    Last but not least, BetaShares website looks far too polished. Must've spent a pretty penny on it :D.

    In all honesty quite undecided between the two. Really splitting hairs i think
     
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  4. PKFFW

    PKFFW Well-Known Member

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    I'm no expert but I like to think I've got the major points of the process settled to suit my wife and I's circumstances. I've spent this year reading, researching, considering our goals, risk appetite, strategy, timeframe, sorting our finances and other investments in preparation, etc.

    I have spent a bit of time researching both VAS and A200. However, as no expert I know I could very well have missed something important regarding this final decision. I guess what I'm really asking is for advice as to what some of the more experienced hands would be considering if they were making this choice.

    All those "shortcomings" of A200 (less FUM, less liquidity, shorter company history) are primarily what has stopped me from already deciding to go with A200.

    Would anyone have any concerns regarding Betashares going out of business or closing A200 in the "near" future?
     
  5. Islay

    Islay Well-Known Member

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    I have money in BetaShares Australian Bank Senior Floating Rate Bond ETF QPON. So no I do not have concerns about BetaShare in the near future.
     
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  6. Sticky

    Sticky Well-Known Member

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    I don't really have concerns with A200, but I prefer VAS for the reasons mentioned above.
    I'm hoping they will reduce the MER to match Betashares.
    Also, I like that VAS has quarterly dividends, vs bi-annually for A200.
     
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  7. Befuddled

    Befuddled Well-Known Member

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    Perhaps take the path of least regret?

    50/50 each way or some other split between the two?

    It doesn't have to be black or white :)
     
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  8. PKFFW

    PKFFW Well-Known Member

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    Yeah I'm seriously considering that or taking a position in one and then building a position in the other over the next few years.
     
  9. willair

    willair Well-Known Member Premium Member

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    That's good your ""Wife"" and yourself are on the same page,and understands but there is only 2 questions to ask yourself..
    What and who will inform your trading decisions..

    Then what trading style will you pursue ,because that is the most important determinant about a disciplined trading style between success and failure..

    I cant tell you what approach is going to work for you,one only has to read on the merry-go round of posts covering all the equity within this site and the old site to see the key metrics when you focus and scope down to see the number of winners/losing and the average win/loss amounts..

    The link below is a book I have read several times ,and before the call to get inline and place an buy order I read a page from that book and look up on my office wall at all the framed failures ,and the ones that went above 1000%..not advice in any way..
    [​IMG]
     
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  10. Redwing

    Redwing Well-Known Member

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    A200 had $48M in assets in June, now up to around $240M so Betashares are earning around $168k in fees


    upload_2018-11-4_8-12-11.png
     
  11. PKFFW

    PKFFW Well-Known Member

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    I'll assume you put the word wife in quotation marks because in my post I kept referring to I and me when mentioning research, reading, decisions etc and not as an intentional insult to either myself or my wife. I can see how my choice of words could cause confusion. For the most part it is simply easier to write I and me than "my wife and I" every time. My wife and I have invested jointly in property for a number of years. We both do the research, debate and discuss each property and make decisions together. Investing in the share market will be the same when it comes to final decisions but my wife has made it clear she just isn't as interested in all the research when it comes to the share market. So I narrow down the field and then we decide together.

    With that cleared up, we have no interest or desire in trying to outperform any particular Index or achieving the absolute best return if that means taking on excessive risk. With the amount we have to invest now and the amount we can continue to invest over the next 6 years, the market average is plenty good enough to get us to where we want to go. So we aren't thinking in terms of 1000% winners or losers that might have a huge impact on our portfolio. Our trading style will more or less follow the Thornhill approach. We want the income stream. We will be buying with the intention of never selling. We will start our portfolio by lump summing into 3 LICs and 1(maybe 2, hence this thread) ETFs. We may build up a position in a 4th LIC overtime. We will then buy $15k lots just about every month for the next 6 years. The monthly buying decisions will be based on a combination of portfolio asset allocation percentages and NTA premium/discount. The total portfolio outside of Super will be in Australian equities because of the historically higher yield and franking credits. Inside super we are 75% International and 25% Australian. We are happy with that diversification.
     
  12. SatayKing

    SatayKing Well-Known Member

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    Interesting. I suppose the aggregate fees add up over the six years. Rough and therefore inaccurate $15k per month for 72 months probably adds up to maybe 25k (?) over six years in fees compared with 50k. Is that the main worry? Brokerage would the the same for either.
     
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  13. Befuddled

    Befuddled Well-Known Member

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    Sounds like brokerage would be a concern if the plan is to invest $15k per month

    SelfWealth and CMC seem attractive alternatives to something like Commsec.
     
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  14. PKFFW

    PKFFW Well-Known Member

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    Fees are definitely a consideration. However, and I realise no one can foretell the future, my main concern is missing something that would suggest A200 would be a riskier investment than VAS going forward. Eg: Betashares going out of business or is likely to close the A200 ETF for some reason or has a history of jacking up the fees on their products or is likely to do so in this instance. Something like that.

    I don't think I've missed anything obvious but in the back of my mind there's that little voice saying "if it sounds too good to be true it probably is!". I suppose at the heart of my question is how can A200 be sustainable and yet have a MER half that of the venerable Vanguard VAS? Maybe it's a question I'm just going to have to admit I can't really know the answer to because I don't work for Betashares and I'm just going to have to take a punt one way or the other.

    Yes, those are the two I'm currently signed up to and getting familiar with.
     
  15. The Falcon

    The Falcon Well-Known Member

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    I see the fees converging for vanilla ETFs over time. So, long run I don’t think there will be much in it.
     
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  16. Nodrog

    Nodrog Well-Known Member

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    Yep. And even index Mgrs can add value that may see them outperforming the index they follow or at least compensate for part of the fee. I think I saw the other day that Vanguard will be getting more involved in securities lending. This may enhance investor returns.

    Also indexes vary in quality depending on the provider. From memory I think Vanguard pay a fee of 0.10% to their index provider for VAS? Betashares are obviously paying their lesser known provider a lot less.

    Personally I sleep better Investing with Vanguard given their history, size and objectives. Like @The Falcon stated I think fees will converge overtime so I’m sticking with Vanguard for reasons given. But that’s just me probably being paranoid.
     
  17. PKFFW

    PKFFW Well-Known Member

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    A good point and likely to be accurate think.

    Yes Betashares uses the Solactive Australian 200 Index. If memory serves I read that it is a German company that constructs the "Index". I thought if each is a cap weighted Index then the top 200 companies that make up each Index should be the same. I just figured the math is the math but perhaps that is too simplistic.
     
  18. momentum26

    momentum26 Well-Known Member

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    Please could you share which LIC & ETF did you finalise on per your research and how satisfied are you with its performance since?

    Thank for your post. I am a newbie making myself aware with as much reading possible with respect to investing for income streams via LIC/ETF in the most optimal manner and simply building on the overall amount invested month by month. I do not have property portfolio that needs to be liquidated, thus do not have access to large sum of monies but I am willing to gradually build on the investments by lumping the savings every 3-6 months (to lower the brokerage cost) and build on it once the structure is in place. By structure, I do not mean the “Trust” structure but deciding on the broker to use and chosen LICs & ETFs to focus on and then simply keep building on its holding.


    Which broker out of the two (CMC/SelfWealth) did you decide on and if there were any specific points that mattered most when finalising the chosen one?
     
  19. PKFFW

    PKFFW Well-Known Member

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    @momentum26 I use Selfwealth as my broker. I don't need all the analysis tools and news and such so in the ended decided the cheapest broker was ideal for me. I ignore all the social/community crap on Selfwealth as I feel it is designed solely with the aim of getting clients to trade more often and therefore make more money for Selfwealth.

    Regarding my portfolio, in the end I decided simplicity was best for me and settled on VAS only up to this point in time. Due to wanting more diversification I have now decided to direct all future funds for the foreseeable future into VGS. I chose VAS over A200 because I felt more comfortable with the long term track record and stability of Vanguard. I believe fees will continue to drop in time so the current 0.03% difference isn't a huge difference in my mind.
     
  20. LIDM

    LIDM Well-Known Member

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    My tip, convert the difference in MER into real dollars and then consider how much it should influence your decision compared to other factors, e.g. liquidity, FUM, div distribution, asx200 v asx300, mgt... :)