Assets under management in Australian ETFs continue to rise, currently standing at $329.4 billion at the end of the March. ETFs are easy to access, provide instant diversification and can be used to gain exposure to asset classes that are difficult to access directly. This has made ETFs popular amongst newer investors who may not have the time or resources to compile their own portfolio of shares.

Since our last review of the largest Aussie ETFs in 2024, the top 3 ETFs remain the same. Vanguard Australian Shares ETF (VAS) has maintained the number one spot. Interestingly, Vanguard MSCI International ETF (VGS) has moved up to second place and iShares S&P 500 ETF (IVV)has dropped to third. Here’s everything you need to know about the most popular Aussie ETFs.

1. Vanguard Australian Shares ETF (ASX.VAS)

AUM: $25.5 billion (at 23/06/26)

Rating: Bronze

The Vanguard Australian Shares ETF (ASX.VAS) follows a passive strategy, aiming to replicate the S&P/ASX 300 index. Our manager research team highlights that the S&P/ASX 300 Index has been difficult for many active managers to beat net of fees. The ASX 300 is a market cap weighted index adjusted for free float. The index provides exposure to approximately 300 of Australia’s largest companies and is rebalanced semiannually in March and September.

One consideration when looking for broad domestic equity Australia are the unique attributes of the Australian market. BHP Group (ASX.BHP) makes up 11.5% of the index while Commonwealth Bank (ASX.CBA) makes up 10%. The top 10 holdings make up 47% of the index (at 23 June 26). The Australian market is very narrow, which means that the financial services and mining dominate weighting. Consequently, the index has a tilt toward cyclical sectors which tend to align with the performance of the wider Australian economy.

This concentration should be considered, especially when combining multiple ETFs in a portfolio. Overall, our analysts believe that this ETF is an acceptable choice for core Australian equity exposure, awarding it a Bronze medalist rating.

The ETF fees are 0.07% per year which place it in the cheapest quintile of the Morningstar Australia Large Blend Category (median fee is 0.93% per year). The comparatively low cost translates into a Medalist Rating Price Score of 2.37. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.

2. Vanguard MSCI International ETF (ASX.VGS)

AUM: $16.4 billion (at 23/06/26)

Rating: Gold

Vanguard MSCI Index International Shares ETF (ASX.VGS) mirrors the MSCI World ex Australia Index. The MSCI World ex Australia index collects the top stocks across 22 developed markets and weights them by market cap. At the end of May, there were over 1,200 shares held by the ETF which represents approximately 85% of global shares by market cap. 73% of these holdings are listed in the US.

Our manager research team highlights that index market weighting naturally adjusts to share price movements without the need to frequently rebalance, meaning overall lower fees. Low cost index ETFs typically gain a long-term performance advantage over most actively managed peers.

VGS allows Aussie investors to gain easy access to a large pool of international companies. Our manager research team notes this ETF strategy stands to be among one of the best choices for global market exposure. The efficacy of passive management in global markets, its cost-efficient availability and broad diversification continue to be key drivers that earn Morningstar’s conviction and Gold rating.

Looking at index exposure, 28% of the index is made up of the top 10 holdings. The top two holdings in the index are Apple (NAS.AAPL) and Nvidia (NAS.NVDA) making up 10% weighting. The index is highly concentrated in US tech due to the large market caps of these companies. Despite this, the broad pool of international holdings creates diversification benefits.

Overall, the long-term effectiveness of passive products and the index tracking capability of Vanguard make it an appealing pick in global equities.

The fee is 0.18% per year which places this ETF in the cheapest quintile of the Morningstar Australia Fund Equity World Large Blend Category, where the median fee is 0.85% per year. Morningstar give VGS a Medalist Rating Price Score of 2.24.

3. iShares S&P 500 ETF (ASX.IVV)

AUM: $14 billion (at 23/06/26)

Rating: Gold

The continued popularity in the iShares S&P 500 ETF (ASX.IVV) indicates Aussie investors continue to value exposure to large cap businesses in the US. While investors can buy US shares directly, many opt for a broader approach. The S&P 500 is run by a handpicked committee that selects 500 of the largest US stocks. Despite popular belief, market cap is not the only deciding factor for the index incumbents. The committee will ensure each company meets profitability and liquidity requirements. This limits higher turnover for managers such as iShares (Blackrock) which is a key reason driving lower fees.

The S&P 500 index is weighted by market cap, which means the top 10 largest shares represent around 40% of the portfolio. This concentration risk has been exacerbated recently by strong performance from companies such as Nvidia, Apple and Microsoft. However, such concentration is only a reflection of wider market sentiment.

Our manager research team notes the IVV ETF is a best in class option for large-cap US stocks. The low turnover, low fees and broad diversification across the US market more than offsets the concentration risks. The ETF delivered a 14.8% annualised return over the past 10 years which represents the strength of the US stock market post GFC. However, it is worth highlighting the same risks apply in market downturns.

At an annual fee of 0.04%, the fund is priced attractively compared to active and passive peers. This places IVV in the cheapest quintile of the Morningstar Australia Fund Equity North America Category, where the median fee is 0.34% per year. Our manager research team assigns IVV a Medalist Rating Price Score of 2.14.

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