The cheapest index ETFs on the ASX charge just 0.03% to 0.10% a year. For Australian shares, A200 (0.04%); for US shares, VTS (0.03%) or IVV (0.04%); for global shares, BGBL (0.08%); for bonds, VAF (0.10%); for cash, BILL (0.07%). A simple portfolio of A200 and BGBL costs about $64 a year per $100,000.
Index funds vs ETFs in Australia
An index fund is any fund that tracks a market index, such as the ASX 200 or the S&P 500, instead of a manager picking stocks. In Australia, you can own one in two ways:
- As an ETF on the ASX, bought and sold through a broker like a share. This is where the lowest fees are.
- As an unlisted managed fund, bought directly from the issuer or through a platform or super fund. Fees and minimum investments vary, so check the product disclosure statement (PDS).
Many issuers run the same index in both forms. For most investors who already have a broker account, the ETF version is the simplest and cheapest.
Index funds are cheap because there is no team of analysts to pay. The fund simply holds what the index holds, in the same proportions, and trades only when the index changes. That keeps costs and turnover low, and turnover matters for tax too: less buying and selling inside the fund generally means fewer capital gains passed on to you. We explain the differences in more detail in ETFs vs index funds vs managed funds.
The cheapest index fund for each job
| Job | Cheapest index ETF | Fee | Size | 5 years (a year) | Next cheapest |
|---|---|---|---|---|---|
| Australian shares | A200 | 0.04% | $11.1bn | 6.9% | IOZ 0.05%, VAS 0.07% |
| US whole market | VTS | 0.03% | $7.3bn | 12.4% | |
| US 500 largest | IVV | 0.04% | $14.9bn | 13.4% | V500 0.07% (new) |
| Global developed | BGBL | 0.08% | $5.5bn | 18.7% (3y) | VGS 0.18% |
| Global, hedged | HGBL | 0.11% | $3.0bn | 20.6% (3y) | VGAD 0.21% |
| Global outside the US | VEU | 0.07% | $6.5bn | 9.2% | |
| Emerging markets | VGE | 0.48% | $2.2bn | 5.8% | IEM 0.69% |
| All-in-one | DHHF | 0.19% | $1.7bn | 9.2% | VDHG 0.27% |
| Australian bonds | VAF | 0.10% | $3.9bn | -0.1% | IAF 0.10% |
| Global bonds, hedged | WBND | 0.19% | $0.8bn | new | VBND 0.20% |
| Cash | BILL | 0.07% | $1.3bn | 3.1% | ISEC 0.12% |
| Gold | PMGOLD | 0.15% | $2.4bn | 19.9% | GXLD 0.15% |
| Australian property | SLF | 0.16% | $0.5bn | 2.4% | VAP 0.23% |
| Global infrastructure | GLIN | 0.15% | $1.9bn | 12.3% (3y) | IFRA 0.20% |
Index funds with $50m or more. Total returns to 30 September 2026; 3y marks funds without a five-year record. Source: TMX Australia monthly funds report.
The lowest fee available for each part of a portfolio
A few things the fee table doesn't show
- Same job, different index. VTS is cheaper than IVV but holds the whole US market, including smaller companies. Over five years IVV did better (13.4% vs 12.4% a year) because large companies led. See IVV vs VTS.
- Australia's largest ETF isn't the cheapest. VAS (0.07%) holds about 300 companies against A200's 200. The two are about 94% the same. See VAS vs A200.
- Cheap global funds differ. BGBL and VGS track similar developed-world indexes. IWLD (0.09%) uses an ESG-screened version. WXOZ (0.07%) uses a carbon-aware one. See VGS vs BGBL.
- An active fund at an index price. MQAE charges just 0.03% for Australian shares, but it is an active fund with less than three years of history, so we have left it out of the table.
What the cheapest funds have returned
Low cost doesn't mean low return. Here is what $10,000 grew to over five years in the cheapest fund for each main job.
What $10,000 grew to over 5 years
US shares led, Australian shares lagged and bonds went slightly backwards as interest rates rose from 2022. Over three years VAF has returned 3.4% a year as bond prices recovered. These figures say nothing about which will lead next.
How cheap can a whole portfolio be?
Many investors build around two or three of these funds. The blended fee is simply each fund's fee weighted by how much you hold.
Yearly fee on $100,000 for some simple portfolios
The all-in-one funds cost more, but they rebalance for you and keep the mix steady. For some investors that convenience, and the discipline of not tinkering, is worth $100 or so a year. Compare them in VDHG vs DHHF.
What the fee costs on $100,000 over 20 years
Choosing a low-cost index fund
- Size and spread. Large funds like A200, IVV and VAS trade with very small spreads (about 0.02%). A cheaper but tiny fund can cost more to buy and sell.
- Hedged or unhedged. Hedged global funds such as HGBL remove currency moves for a small extra fee. See hedged vs unhedged ETFs.
- Overlap. IVV, VTS and VGS hold many of the same companies. IVV and VTS are about 88% the same. Check with the overlap calculator.
- Switching costs. If you already own a slightly pricier fund, selling may trigger capital gains tax. The fee saving often isn't worth it.
See every low-cost ETF on the ASX →
Common questions
What is the cheapest index fund in Australia?
On the ASX, VTS (US whole market) charges 0.03% a year. For Australian shares, A200 is cheapest among index ETFs at 0.04%, followed by IOZ and STW at 0.05%.
Is an ETF the same as an index fund?
Most ETFs are index funds that trade on the ASX. Some ETFs are actively managed, and some index funds are unlisted. In Australia, the ETF version of an index usually has the lowest fee.
What is the cheapest global shares ETF?
Among large funds, BGBL charges 0.08% for developed-world shares outside Australia, against 0.18% for VGS. VEU covers shares outside the US for 0.07%.
Is A200 or VAS better?
A200 is cheaper (0.04% vs 0.07%) and returned 6.9% a year over five years against 6.5% for VAS. VAS holds about 100 more smaller companies. They are about 94% the same.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.