Best Aussie ETFs Compared (VAS Vs A200 Vs IOZ)
VAS vs A200 vs IOZ + Super-compounding Stock Disappoints - Is this a buying opportunity?
There are a few ASX listed Aussie ETFs strictly tracking large-cap Aussie companies. But which one is best, and what are the differences between each one?
To answer that question, I thought I'd compare 3 of the most popular Aussie ETFs (VAS, A200 & IOZ) listed on the ASX. So popular that they account for two of Pearlers top three most popular ETFs.
There's a good reason for their popularity. They’re all great vehicles for investors to access Australia’s largest companies through low cost, diversified ETFs.
While all three 3 ETFs have similar goals, there are some subtle differences you should consider before taking the plunge into either VAS, A200 or IOZ.
Keep reading for my analysis via the link below ⬇️
What Caught My 👀 This Week
Big Coal Falters.
Origin Energy copped a whopping $2.29 Billion dollar loss for FY21. AGL posted a similar-sized loss as coal power struggles to compete against cheaper, renewable alternatives.
Origin is down roughly 13% and AGL about 40% for the year while the ASX200 is up about 12%.
#From Around The Web
A Supercompounder Disappoints - Is it Worth Looking Looking Into?
One of Australia's 'Supercompounders, (a company that has produced extraordinary returns for shareholders) Magellan Financial Group (ASX:MFG) released their FY21 annual report last week.
The company reported that its net profit after tax was down 33% to $265.2 million compared to the prior year. The market was well aware that Magellan's FY21 results wouldn't be stellar due to the impact of fewer performance fees extracted from the underperformance of their global equities fund. Clearly, this result was worse than expected by the market, after MFG sold off 11% on the day their report was released.
The good news for shareholders is there's a lot more to that number than meets the eye. Magellan's results account for a number of non-cash, and one-off losses that "reflect the start-up losses and costs" from their Magellan Capital Partners segment.
Magellan attributes part of its impressive free cash flow stream to investing in other businesses with the intention of diversifying away from its core funds management business.
According to Magellan, the majority of their $41.8m loss in this segment can be put down to their investment in start-up Investment Bank, Barronjoey, "which is currently incurring large start-up costs as their executives build out the team, onboard clients and set up the required infrastructure." The company also flagged one-off transaction costs triggered by the restructure of the Magellan Global Fund and the launch of Magellan FuturePay. Magellan's Performance fees were also 63% lower in FY21, an additional blow to their bottom line.
Excluding dividends, $10,000 invested in Magellan Financial Group exactly 10 years ago would be worth roughly $370,000.00 today. That's a 43% compounded annual return.
Over the same period, the ASX 200 returned roughly 5.8%. Now you know what I mean by 'super-compounder.' The question is, will the Magellan keep that compounding engine firing on all cylinders? Personally, I'm inclined to think they will. Management seems to be doing all the necessary things to propel Magellan into its next phase of growth. While Magellan's fund's management business is mature, but still growing, the Magellan Capital Partners business is what really excites me.
Assuming MFG can continue generating modest inflows into their funds, I'm confident their investing prowess will hold them in good stead to continue making prudent investments with their free cash flow to compound shareholders capital for decades to come.
If you're up for digging into MFG a little more, you can check out its latest Annual Report here. I'd start with Hamish Douglass' Chairmans Letter. In classic Hamish Style, his candour and transparency make it easy for investors to develop an objective opinion on MFG. *Disclaimer: For full disclosure, I own shares in MFG.
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