Key Highlights

  • SPDR S&P/ASX 200 ETF (ASX:STW) is the largest at about $6.74 billion with a fee of 0.05% and a Yield of 3.74%.
  • Betashares Australian Small Companies Select ETF (ASX:SMLL) holds 59 companies, with a fee of 0.39% and no listed yield.
  • Firetrail Australian Small Companies Fund Active ETF (ASX:FSML) is actively managed, with a fee of 0.85% and a listed yield of 6.25%.
  • ASX:STW is weighted to large companies, with BHP and Commonwealth Bank as its largest positions.

Three Australian Equity ETFs cover very different parts of the market: SPDR S&P/ASX 200 ETF (ASX:STW), Betashares Australian Small Companies Select ETF (ASX:SMLL) and Firetrail Australian Small Companies Fund Active ETF (ASX:FSML). ASX:STW tracks the largest listed companies, while the other two focus on smaller businesses, with ASX:FSML managed actively. This article looks at the trade-offs of company size, costs and income.

Measure

ASX:STW

ASX:SMLL

ASX:FSML

Listed price

$81.77

$4.49

$1.95

Fund size

$6.74 billion

$371.45 million

$612.38 million

Management fee

0.05%

0.39%

0.85%

Listed annual yield

3.74%

Not shown

6.25%

Holdings

207

59

Not shown

Management style

Index

Index

Active

Company size and approach

ASX:STW tracks the S&P/ASX 200 Index, which covers the largest listed companies, and 95.76% of its holdings have market values above $1 billion. ASX:SMLL tracks the Nasdaq Australia Small Cap Select index, with 56.44% of holdings above $1 billion and 40.23% between $500 million and $1 billion. ASX:FSML aims to outperform the S&P/ASX Small Ordinaries Accumulation index over the medium to long term, and its listing does not show holdings.

In short, ASX:STW is a large-cap product, ASX:SMLL is a smaller-company index product, and ASX:FSML is an active small-company fund with a less transparent portfolio on the listing.

Costs and income

ASX:STW is the cheapest at 0.05%, followed by ASX:SMLL at 0.39% and ASX:FSML at 0.85%. The listed yields reflect the different company sizes: ASX:STW shows 3.74%, while ASX:FSML shows 6.25%. ASX:SMLL's listing shows no annual yield, which is common among smaller companies that retain profits.

Investors should note that a higher listed yield in a small-company fund may depend on payout decisions by a limited number of companies.

Risks to weigh

Smaller companies tend to be more volatile than large caps, and their shares can be harder to sell in a downturn. ASX:SMLL and ASX:FSML are therefore more exposed to price swings than ASX:STW. ASX:STW is concentrated in banks and resources, so a fall in those sectors affects it heavily.

ASX:FSML's active approach adds manager risk, and its higher fee raises the return needed to beat the benchmark.

Final Word

The three equity funds span the Australian market from its largest companies to its smaller ones. ASX:STW offers the lowest-cost broad exposure, ASX:SMLL the index-based small-cap option, and ASX:FSML an active small-company approach at the highest fee.