Smart Beta ETFs on the ASX: total returns
Smart beta ETFs on the ASX are exchange traded funds that track an index built on rules other than market capitalisation. Those rules may screen companies on value, quality, momentum or low volatility, weight every holding equally, or set weights from accounting figures such as sales or dividends. ASIC's guidance describes these funds as having elements of both index tracking and active investing. The table below lists smart beta ETFs ASX investors can buy across Australian and global shares, with each fund's total return, including distributions, for the year to date and over one, three, five and ten years.
14 ETFs. The sort order is not a ranking or recommendation.
General information only, not personal financial advice. Past performance is not a reliable indicator of future performance. Read the disclaimer.
Sorted by YTD, highest first. 14 of 14 funds.
| VLUESmart Beta | VanEck MSCI International Value ETF | Day-0.76% | YTD+32.73% | 1Y+42.28% | 3Y p.a.+26.00% | 5Y p.a.+18.18% | 10Y p.a.n/a | Inception p.a.+17.91% | Price$37.77 |
|---|---|---|---|---|---|---|---|---|---|
| SYISmart Beta | SPDR MSCI Australia Select High Dividend Yield Fund | Day+1.87% | YTD+16.95% | 1Y+15.75% | 3Y p.a.+15.44% | 5Y p.a.+11.84% | 10Y p.a.+9.34% | Inception p.a.+8.35% | Price$32.21 |
| QHALSmart Beta | VanEck MSCI International Quality (Hedged) ETF | Day-0.99% | YTD+11.13% | 1Y+15.69% | 3Y p.a.+17.63% | 5Y p.a.+9.87% | 10Y p.a.n/a | Inception p.a.+13.68% | Price$57.19 |
| VHYSmart Beta | Vanguard Australian Shares High Yield ETF | Day+0.83% | YTD+10.88% | 1Y+11.30% | 3Y p.a.+14.98% | 5Y p.a.+11.95% | 10Y p.a.+10.16% | Inception p.a.+9.67% | Price$83.89 |
| QOZSmart Beta | Betashares FTSE RAFI Australia 200 ETF | Day+0.26% | YTD+9.46% | 1Y+10.42% | 3Y p.a.+15.47% | 5Y p.a.+10.78% | 10Y p.a.+10.25% | Inception p.a.+9.69% | Price$19.35 |
| AQLTSmart Beta | Betashares Australian Quality ETF | Day+0.46% | YTD+8.62% | 1Y+4.72% | 3Y p.a.+18.41% | 5Y p.a.n/a | 10Y p.a.n/a | Inception p.a.+11.77% | Price$35.26 |
| QUALSmart Beta | VanEck MSCI International Quality ETF | Day-0.38% | YTD+6.21% | 1Y+8.06% | 3Y p.a.+15.04% | 5Y p.a.+12.21% | 10Y p.a.+15.60% | Inception p.a.+15.01% | Price$63.58 |
| MVWSmart Beta | VanEck Australian Equal Weight ETF | Day+0.16% | YTD+2.30% | 1Y-1.32% | 3Y p.a.+9.00% | 5Y p.a.+6.38% | 10Y p.a.+8.43% | Inception p.a.+8.57% | Price$38.27 |
| GWTHSmart Beta | VanEck MSCI International Growth ETF | Day-3.90% | YTD+2.27% | 1Y-1.73% | 3Y p.a.n/a | 5Y p.a.n/a | 10Y p.a.n/a | Inception p.a.+2.99% | Price$20.19 |
| MOATSmart Beta | VanEck Morningstar Wide Moat ETF | Day+0.18% | YTD+0.28% | 1Y+3.32% | 3Y p.a.+10.66% | 5Y p.a.+9.78% | 10Y p.a.+14.72% | Inception p.a.+14.00% | Price$119.20 |
| AUMFSmart Beta | iShares Edge MSCI Australia Multifactor ETF | Day-0.47% | YTD+0.02% | 1Y-1.86% | 3Y p.a.+13.29% | 5Y p.a.+8.07% | 10Y p.a.+8.93% | Inception p.a.+8.92% | Price$38.49 |
| MTUMSmart Beta | Betashares Australian Momentum ETF | Day-1.50% | YTD-5.03% | 1Y-9.40% | 3Y p.a.n/a | 5Y p.a.n/a | 10Y p.a.n/a | Inception p.a.+4.75% | Price$26.96 |
| MVSSmart Beta | VanEck Australian Small Companies Dividend Payers ETF | Day-2.54% | YTD-13.07% | 1Y-12.18% | 3Y p.a.+7.97% | 5Y p.a.+0.76% | 10Y p.a.+4.71% | Inception p.a.+4.99% | Price$19.95 |
| GTUMSmart Beta | Betashares Global Momentum ETF | Day-3.32% | YTDn/a | 1Yn/a | 3Y p.a.n/a | 5Y p.a.n/a | 10Y p.a.n/a | Inception p.a.n/a | Price$22.69 |
How smart beta differs from index and active ETFs
A market-cap index ETF such as VAS or VGS weights each company by its market value, so the largest companies take the largest share. A smart beta ETF's index instead screens companies on a factor, caps every holding at the same weight, or sets weights from accounting figures rather than share price. The index provider publishes the method and rebalances on set dates; the fund manager replicates the result.
An active ETF works the other way round: a manager picks holdings to beat a benchmark, and ASIC's Regulatory Guide 282 requires the words "Active ETF" in its name. The same guide gives a smart beta fund the plain "ETF" label as long as it tracks a published index that meets recognised benchmark principles. A fund that relies on the issuer's own quantitative models takes the "Active" label instead, so two funds with similar factor language can sit in different groups.
The common factors
Value screens for companies that look cheap on price to earnings, price to book or dividend yield. Quality screens on return on equity, earnings stability and debt. Momentum holds the companies whose prices have risen most over a recent window, often 6 to 12 months, and drops them as they slip. Low volatility selects the companies whose prices have moved least, typically utilities, infrastructure and consumer staples.
Equal weight ignores size: with 200 holdings, each gets 0.5 per cent at every rebalance. Fundamental weighting uses sales, cash flow, book value or dividends, so a company's weight does not rise simply because its share price has. Multifactor funds combine two or more of these screens in one index.
What the returns in the table show
Each figure combines the change in the ASX closing price with distributions paid over the period. The useful comparison is with the broad market fund for the same market and period, since a factor index exists to differ from it.
Factor returns run in long cycles: value indices trailed growth for most of the 2010s and then beat them in 2022 as interest rates rose, so a 1-year or 3-year figure largely records where the factor sat in its cycle.
The table does not show how far a fund fell along the way, how closely it tracked its own index, or the capital gains distributed after a rebalance, which rise with index turnover.
Questions
Are smart beta ETFs active or passive?
Both, in different ways. The decision to depart from market-cap weighting is an active one, but it is made once, in the index rules, rather than day by day by a manager. Because the fund then follows those rules mechanically, its result against the broad market depends on how the factor performs.
Is smart beta the same as factor investing?
Mostly. Factor investing is the research finding that traits such as value, quality, momentum, size and low volatility have explained differences in share returns over long periods. Smart beta is the ETF industry's name for index products built on those traits, and it also takes in weighting schemes such as equal weight and fundamental weighting, which are rules rather than factors.
Are smart beta ETFs riskier than index ETFs?
It depends on the factor. A low volatility fund is built to fall less than the market, while a momentum or equal weight fund can swing more than it because of its tilt towards smaller or faster-moving companies. Every smart beta fund carries tracking risk against the broad market: it can trail a plain index ETF for several years when its factor is out of favour.
How often does a smart beta ETF rebalance?
On a fixed schedule set by the index provider, most often quarterly or twice a year. Between rebalances the weights drift with prices, so an equal weight fund is only truly equal on the rebalance date. Turnover at each rebalance is usually highest for momentum indices, because their rankings change fastest.