The Betashares FTSE RAFI Australia 200 ETF (ASX: QOZ) offers a distinctive approach to Australian share investing: instead of weighting companies by their sharemarket size, it weights them by measures of their economic footprint, such as sales, cash flow, dividends and book value. This "fundamental" approach tilts the portfolio towards value and away from whatever is most in fashion.

In September 2026, with the fund about to undergo a name and index change, QOZ is a timely example of how fundamental indexing works. This article explains how QOZ operates, the upcoming change, why it is in focus, and the catalysts and risks that could shape it from here. It reflects information available as of the research date, and readers should check the latest Product Disclosure Statement for the most current details.

What is the QOZ ETF?

QOZ is a passive ETF issued by Betashares. It aims to track, before fees and expenses, an index of the top 200 ASX-listed companies weighted by fundamental measures of economic size — sales, cash flow, dividends and Book Value — rather than by market capitalisation. This approach, known as fundamental indexing, deliberately breaks the link between a company’s share price and its weight in the index. The fund charges management costs of 0.40% per annum, pays distributions with franking credits, and has been listed since 2013. Importantly, effective 18 September 2026, Betashares is renaming the fund the Betashares Australia 200 Fundamental Value ETF, reflecting changes to the underlying index it tracks.

The fundamental-weighting methodology is the defining feature. Because it weights companies by economic measures rather than market value, QOZ automatically holds relatively less of expensive, highly valued stocks and relatively more of cheaper ones, giving it a value tilt. Betashares describes the aim as delivering outperformance by effectively "selling expensive shares while buying undervalued ones" at each rebalance. This makes QOZ behave differently from a standard market-cap ASX 200 fund, particularly relative to growth-oriented or momentum-driven markets.

What is driving interest now?

The immediate point of interest is the fund’s upcoming name and index change, effective 18 September 2026, when it becomes the Betashares Australia 200 Fundamental Value ETF. This reflects a change to the underlying index, and investors in the fund should review the supplementary disclosure to understand exactly what is changing.

More broadly, QOZ’s appeal is its value tilt. In a market where the largest, most expensive stocks have often led, a fundamental-value approach offers a way to lean against that concentration and towards cheaper companies. Value strategies can outperform when markets rotate away from expensive Growth Stocks and towards undervalued ones, and can lag when growth and momentum dominate. The rate environment, bank and miner earnings, and the broader value-versus-growth dynamic all feed into how QOZ performs relative to a standard index.

Portfolio and holdings

QOZ’s portfolio holds around 200 ASX-listed companies, weighted by fundamental measures of size rather than market capitalisation. In practice this still produces a portfolio dominated by Australia’s largest companies — the major banks, miners and other big caps — but with weightings that differ from a standard market-cap index, tilting towards companies that look cheaper on fundamental measures.

The most important thing for investors to understand is the value tilt that fundamental weighting produces. Compared with a market-cap fund, QOZ tends to hold relatively more of companies with strong sales, cash flow, dividends and book value relative to their share price, and relatively less of highly valued growth stocks. That gives it a different risk-and-return profile from a standard ASX 200 fund, and its relative performance depends heavily on whether value or growth is in favour.

Catalysts to watch

Several factors could influence QOZ in the coming months: the upcoming name and index change effective 18 September 2026; whether value stocks outperform growth in the Australian market; the RBA’s rate path and its effect on different sectors; bank and miner earnings; and the broader value-versus-growth dynamic in equities.

Risks

QOZ carries Equity Market Risk like any Australian share fund, plus risks specific to its strategy. The value/fundamental Factor can underperform the broad market for extended periods, particularly when growth leads. Sector concentration in financials and materials remains a feature. The upcoming index change introduces some uncertainty as the methodology evolves, so investors should review the updated disclosure. Market risk, index-tracking risk and variability of distributions apply. Its higher fee than the cheapest broad Australian Index Funds is a consideration.

Outlook

QOZ offers Australians a fundamental-value alternative to the standard market-cap index, tilting towards cheaper companies, and it is about to be renamed to reflect that focus more explicitly. Its near-term fortunes rest on the value-versus-growth dynamic, the details of the upcoming index change, and the Australian market. Investors may be watching the September index change, the value-versus-growth rotation and bank and miner Earnings for direction. The outlook may depend on whether value stocks outperform and on how the fund’s updated index performs relative to the broad market.