Key Highlights

  • Betashares S&P/ASX Australian Technology ETF (ASX:ATEC) is concentrated in technology, which makes up 59.53% of the fund, and has a fee of 0.48%.
  • Betashares Australian Momentum ETF (ASX:MTUM) favours shares with recent price gains, with basic materials at 43.81% of the portfolio and a fee of 0.35%.
  • Macquarie Core Australian Equity Active ETF (ASX:MQAE) has the lowest fee of the three at 0.03%, with financials and materials as its largest sectors.
  • The three funds are concentrated in different sectors, so they can behave quite differently.

Three Australian equity ETFs express different views of the market: Betashares S&P/ASX Australian Technology ETF (ASX:ATEC), Betashares Australian Momentum ETF (ASX:MTUM) and Macquarie Core Australian Equity Active ETF (ASX:MQAE). One is a sector fund, one follows a momentum rule and one is an active core holding. This article compares how each builds its portfolio, what it costs and where the risks lie.

Measure

ASX:ATEC

ASX:MTUM

ASX:MQAE

Listed price

$23.08

$27.57

$12.37

Fund size

$599.79 million

$277.41 million

$1.34 billion

Management fee

0.48%

0.35%

0.03%

Listed annual yield

1.80%

2.22%

2.67%

Holdings

43

90

173

Largest sector

Technology 59.53%

Basic materials 43.81%

Financial services 31.56%

Approach and sector focus

ASX:ATEC tracks the S&P/ASX All Technology Index, so it is a single-sector product with its largest holdings in Computershare, Xero and Pro Medicus. ASX:MTUM tracks the Solactive Australia Momentum Select Index, which selects shares with recent price gains, and its portfolio is weighted toward BHP and Rio Tinto. ASX:MQAE is an active fund that holds around 173 companies, with BHP and Commonwealth Bank as its largest positions.

ASX:ATEC is the narrowest of the three, while ASX:MTUM is a style product whose sector weights can shift with trends. ASX:MQAE is the broadest and relies on manager selection.

Costs and income

The fee for ASX:MQAE is 0.03%, far lower than ASX:MTUM at 0.35% and ASX:ATEC at 0.48%. Listed yields are 2.67% for ASX:MQAE, 2.22% for ASX:MTUM and 1.80% for ASX:ATEC, reflecting the Dividend policies of the companies each holds.

Investors paying a higher fee for a sector or style fund should consider whether the focused exposure fits their existing holdings.

Risks to weigh

ASX:ATEC's concentration in technology means its unit price can move sharply when sentiment shifts, and its top ten make up 73.22% of the fund. ASX:MTUM's heavy weighting to basic materials and energy links it closely to Commodity prices, and momentum strategies can reverse when trends change.

ASX:MQAE carries the usual risks of active management, and its large holdings in banks and resources expose it to those sectors as well.

Final Word

The three equity funds differ in focus more than in market exposure. ASX:ATEC is a concentrated technology bet, ASX:MTUM follows a trend-based stock mix led by materials, and ASX:MQAE offers a broad active core at the lowest fee in the group.