Best iShares ETFs Of January 2025 In Australia

Made up of 102 of the world’s largest companies, the iShares Global 100 ETF  benefits investors who understand there are investment opportunities across the globe, but the US is where many of the most important companies reside.

It’s a bit of a stretch calling IOO a global ETF when US-based companies make up 71% of the fund’s portfolio. However, the stability of the component stocks, not to mention low price volatility and reasonable valuations, bodes well for this fund.

This passive fund tracks the S&P Global 100 Index, which is made up of 100 of the biggest mega-cap stocks in the global stock market. Tech stocks compose 29% of IOO’s portfolio, while healthcare names, consumer staples, consumer discretionary stocks and financials contributing 13%, 12%, 11% and 11%, respectively. It may suit Australian investors angling for broad access to the biggest companies in the world.

The passively managed iShares Core S&P 500is a popular choice among Australian investors keen for exposure to US stocks. This market capitalisation weighted, low-fee passive fund owns the most important publicly traded companies in the US and IVV’s expense ratio of .o3% makes capturing US stock market returns nearly free, while the fund’s healthy dividend yield cushions price declines and provides income.

Over the past 10 years, the S&P 500 has delivered an average annual return of 17.10%. Many diversified investment portfolios feature a fund like IVV to capture these benefits of US market movements without the added effort of stock picking.

As the name suggests, the iShares Core S&P/ASX 200 IOZ ETFis targetted at investors seeking exposure to the ASX200—the top 200 companies on the ASX by market capitalisation— by tracking the S&P/ASX 200 index. It has a price-to-earnings ratio of 12.48%, and a 10-year average return of 7.67%—just shy of the benchmark.

It attracts a management fee of .05%, making it one of the lowest cost ETFs on the market. BlackRock cautions that this is not a product for short-term investment, but is pitched at a “consumer seeking capital growth with a medium to high-risk return profile”. Many local investors use this ETF to round out their portfolio with a dose of domestic exposure.

The iShares S&P Mid-Cap IJHis a mid-cap ETF concentrated on reasonably valued mid- and smaller-sized US companies. The fund aims to provide Australian investors with exposure to the performance of the S&P Mid-Cap 400, which it tracks, and is therefore a popular choice among those seeking exposure to US markets or who want to diversify their holdings.

It is marketed for consumers “seeking capital growth with a high to very high-risk return profile”, so is not suited to beginners or conservative investors.

The fund is managed by BlackRock Fund Advisors, with a management fee of .07%.

Considering the impact of climate change, many investors are turning their attention to companies that are prioritising sustainability. The iShares Core Dividend Growth ETF (IGRO)is touted as a way to gain exposure to a portfolio of ETFs that is diversified across multiple asset classes and regions, that will also be attractive to ESG investors.

BlackRock explains: “Each ETF building block tracks an index that excludes companies/corporate bond issuers involved in serious ESG controversies, and avoid companies/corporate bond issuers engaged in select activities based on revenue thresholds.”

The ETF is approximately 90% equities and 10% fixed income exposure—reassessed quarterly. The actively managed ETF attracts a management fee of .22%. The fund launched in August last year, so there is no data yet for five and ten-year returns.

Selecting bond funds can be a tricky business. If you’re after a relatively cheap and easy way to gain exposure to the Australian bond market, then you may want to look into the iShares Core Composite Bond ETF (IAF)product.

The ETF tracks the performance of the Bloomberg AusBond Composite 0+ Yr Index, which is designed to measure the performance of the Australian bond market. It offers fixed-income securities issued by the Australian Treasury, Australian semi-government entities, supranational and sovereign entities and corporate entities.

Management fees come in at .1% It’s a fairly safe vehicle, and while it could make a nice piece of a portfolio, its not recommended as a investment product on its own.