VAS, A200, IOZ, VHY

IOZ is basically the same as A200 and VAS, so no real differences there at all.

For someone who isn’t able to add to their investments, then the DRP thing can matter, but for most people who are going to buy every month (or even every 3 months), this isn’t really a factor, since any dividend can be bundled with normal savings towards the next purchase.

VHY is a very specific strategy, a high yield fund, which trades off growth for income. And while it can suit some investors, just be aware of what the strategy is going in.

All the best.

Hello Grace,

It’s great to see you’re considering your options in the ETF space and thinking about how best to structure your investments for dividends and growth. Let’s dive into the ETFs you mentioned: IOZ, A200, VAS, and VHY.

IOZ vs. A200 vs. VAS:
– iShares Core S&P/ASX 200 ETF (IOZ) tracks the S&P/ASX 200 index, which includes the top 200 Australian listed companies. It’s known for its lower expense ratio and smaller unit price compared to some other ETFs, which might explain why you can purchase more units of IOZ compared to A200.
– BetaShares Australia 200 ETF (A200) also tracks the top 200 Australian companies but has one of the lowest expense ratios in the category. The difference in the dividend reinvestment plan (DRP) efficiency that you mentioned could be a factor to consider if quicker reinvestment of dividends is a priority for you.
– Vanguard Australian Shares Index ETF (VAS) covers a broader range with the top 300 Australian companies, providing slightly more diversification within the Australian market. This might be a consideration if you’re looking for broader exposure.

Regarding the DRP, it’s worth noting that the speed and efficiency of reinvestment can vary between providers and is influenced by factors like the price of new units and the frequency of dividends. If the DRP’s speed is a significant factor for you, comparing the specifics of each ETF’s DRP terms might be helpful.

Adding VHY:
– Vanguard Australian Shares High Yield ETF (VHY) focuses on high-yielding Australian shares. It’s designed to provide investors with regular income streams, which might be attractive as you’re looking towards dividends coming in over time. Given your interest in generating dividend income and the fact that you’re considering a dollar-cost averaging (DCA) strategy, VHY could complement your portfolio by enhancing its income-generating potential

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