ETF management fees on the ASX run from 0.03% (VTS) to 1.89% a year, with a median of 0.45%. The average invested dollar pays about 0.32%. Higher fees have not reliably bought better results: among international share ETFs with five-year records, the cheapest group returned 10.9% a year and the most expensive 5.3%. Large ETFs also tend to have the lowest trading costs.
The three costs of owning an ETF
- The management fee (MER). The yearly cost of running the fund, shown as a percentage of your balance. You never see a bill: it is taken out of the fund bit by bit, so the returns you see are already after this fee. On $100,000, a 0.20% fee is $200 a year.
- The spread. The small gap between the price buyers pay and the price sellers get on the ASX. You pay roughly half of it each time you buy or sell. For big ETFs it is tiny; for small or thinly traded ones it can be more than a year of fees.
- Brokerage. What your broker charges per trade. It doesn't depend on the ETF, but trading often makes it add up.
Some active ETFs can also charge a performance fee on top of the MER when they beat a target. Check the fund's product disclosure statement (PDS) if you are looking at an active fund.
What ETF fees look like in Australia
Across 508 ETFs on the ASX and TMX, most charge between 0.25% and 0.80%. But most of the money sits at the cheap end. The 23 funds charging under 0.10%, including A200, IVV and VAS, hold about a quarter of all ETF money, around $97 billion.
Share of funds vs share of money, by fee band
Fees broadly follow the type of fund:
- Broad index funds for Australian, US and global shares: 0.03% to 0.20%.
- All-in-one diversified funds such as DHHF (0.19%) and VDHG (0.27%).
- Theme, sector and smart-beta funds: usually 0.35% to 0.70%. NDQ is 0.48%.
- Active funds: often 0.50% to 1.20%, with a median around 0.80% to 0.90% for share funds.
- Geared and short funds: around 1.00% to 1.50%.
What fees cost over 20 years
A fee comes off every year, and you also lose the growth that money would have earned. That is why small differences matter over a long retirement horizon.
What the fee costs on $100,000 over 20 years
At 0.04% you give up about $2,900 over 20 years. At 0.80% it is about $54,000. The higher-fee fund has to beat the cheap one by 0.76 points every year just to come out even.
Do higher fees buy better performance?
We took every ETF with a five-year record (excluding geared and short funds) and grouped them by fee. In international shares, the pattern was clear: the cheapest funds did best and the most expensive did worst.
Median 5-year return a year, by fee band
- International shares: funds under 0.20% had a median of 10.9% a year; funds at 0.70% or more had 5.3%.
- Australian shares: the 0.20 to 0.40% band did best, at 7.7% a year. That band includes resources and high-yield funds such as MVR and VHY, which had a strong run. Above 0.40%, where most active funds sit, the medians dropped to 2.3% and 3.5%.
- Across all asset classes, fee alone told you almost nothing. Of 205 funds, about as many cheap funds had poor returns (50) as expensive funds had good ones (47). Bond funds are cheap but had a weak five years; gold funds cost more and soared.
The lesson: the asset class decides most of your return. Within an asset class, a lower fee has been a reliable advantage. We tested this group by group in Is the cheapest ETF always the best? and looked at active funds in which funds beat the index.
The hidden cost: spreads
The spread depends mostly on how big and how busy the ETF is. Market makers keep prices close to the fund's real value, but they charge more to do it for small funds.
Typical bid-ask spread by fund size
- Large core ETFs such as VAS, A200, VGS and IVV had spreads of about 0.02%.
- Small funds under $50m had a median of 0.26%, more than six years of A200's fee on a round trip.
- Timing matters. Spreads are often wider in the first part of the trading day while market makers settle in. Many investors avoid trading in the first 15 to 30 minutes, and use limit orders.
How to compare ETFs on cost
- Compare like with like. Only compare fees between funds that hold similar things. A 0.04% Australian shares fund and a 0.48% Nasdaq fund do different jobs.
- Look at returns after fees. The returns ETFs report are already after the MER, so compare them directly over five years where you can.
- Check size and spread. A slightly cheaper but tiny fund can cost more to trade.
- Trade less. For a long-term holder, the fee matters more than the spread. For a frequent trader, it is the other way around.
- Don't switch just for a few basis points. Selling can trigger capital gains tax and brokerage, which can outweigh years of fee savings.
Compare ETF fees and returns side by side →
Common questions
What is a good ETF fee in Australia?
For broad Australian, US or global share index funds, 0.03% to 0.20% a year is typical. Theme and smart-beta funds usually charge 0.35% to 0.70%, and active funds often more. The median across all ETFs is 0.45%.
Is the ETF fee taken from my account?
No. The management fee is deducted inside the fund, a little each day, so the unit price and returns you see are already after fees. You don't get a separate bill.
Do more expensive ETFs perform better?
Not reliably. Among international share ETFs with five-year records, the cheapest group returned a median 10.9% a year and the most expensive 5.3%. Within the same asset class, lower fees have generally been an advantage.
What is the cheapest ETF on the ASX?
VTS, Vanguard's US total market fund, at 0.03% a year. A200 and IVV charge 0.04%.
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.