The management expense ratio (MER) is the annual fee charged by an ETF issuer, expressed as a percentage of assets under management. It is one component of the total cost of owning an ETF. The following ETFs have among the lowest MERs of ASX-listed funds as at Q2 2026.
Last updated: Q2 2026. MER figures are sourced from each issuer's published disclosure documents and reviewed quarterly. This table is refreshed each quarter.
| Ticker | Name | MER | Asset class |
|---|---|---|---|
| IVV | iShares S&P 500 ETF | 0.04% p.a. | US shares |
| A200 | Betashares Australia 200 ETF | 0.04% p.a. | Australian shares |
| STW | SPDR S&P/ASX 200 ETF | 0.05% p.a. | Australian shares |
| VAS | Vanguard Australian Shares Index ETF | 0.07% p.a. | Australian shares |
| VGS | Vanguard MSCI Index International Shares ETF | 0.18% p.a. | Global shares |
| DHHF | Betashares Diversified All Growth ETF | 0.19% p.a. | Diversified |
| VDHG | Vanguard Diversified High Growth Index ETF | 0.27% p.a. | Diversified |
| NDQ | Betashares Nasdaq 100 ETF | 0.48% p.a. | US shares |
MER is not the only cost of owning an ETF. The indirect cost ratio (ICR), bid-ask spread, brokerage, and tax treatment also affect the true cost of ownership. Past performance is not a reliable indicator of future returns.
What does the MER actually measure?
The MER is the percentage of fund assets deducted each year to cover the issuer's management costs. A fund with an MER of 0.07% per year costs approximately $7 per year for every $10,000 invested. The fee is taken from the fund's assets rather than charged separately, so you do not see it as a line item, but it still reduces your return. You can model the long-run dollar impact of different MERs with the ETFLens fee calculator.
Why the lowest MER is not always the lowest total cost
MER is one component of the cost of ownership, not the whole picture. The indirect cost ratio (ICR) captures costs incurred inside the fund. The bid-ask spread is the gap between the buy and sell price each time you trade. Brokerage is charged by your broker per trade. Tax treatment, including the franking and capital gains components of distributions, also affects your after-tax outcome. A fund with the lowest management expense ratio is not automatically the lowest total cost or appropriate for any individual.
MER comparison table: major ASX ETF categories
Management expense ratios vary significantly across ETF categories. The table below covers the most widely held ETFs in each major category.
| Category | ETF | MER | Cost per $10,000/yr |
|---|---|---|---|
| Australian shares | A200 | 0.04% | $4/yr per $10,000 |
| Australian shares | VAS | 0.07% | $7/yr per $10,000 |
| Australian shares | IOZ | 0.05% | $5/yr per $10,000 |
| International developed | VGS | 0.18% | $18/yr per $10,000 |
| International developed | BGBL | 0.08% | $8/yr per $10,000 |
| US shares | VTS | 0.03% | $3/yr per $10,000 |
| US shares | IVV | 0.04% | $4/yr per $10,000 |
| Diversified | DHHF | 0.19% | $19/yr per $10,000 |
| Diversified | VDHG | 0.27% | $27/yr per $10,000 |
Why MER is not the only cost to consider
The MER is the most visible cost but not the only one. ETF investors also incur brokerage on each transaction (typically $5-$10 per trade on low-cost platforms), and a bid-ask spread when buying or selling on the ASX. For small, frequent purchases the brokerage cost can exceed the MER advantage of a lower-MER fund. Use our fee analyser to model the true cost of any ETF over your holding period.
Does a lower MER always mean lower total cost?
A lower MER means more of your return is retained each year, but the underlying index matters too. Two ETFs with different MERs may track different indices with different performance histories. A lower-MER ETF tracking a narrower index is not automatically a substitute for a slightly higher-MER ETF tracking a broader one. MER is one factor among several including index methodology, liquidity, tax structure and distribution treatment.
The real cost of fees over time
A difference of a few hundredths of a percent looks trivial, but a management fee is charged every year on your whole balance, so it compounds. Consider a $50,000 holding left for 10 years. As a simplified illustration (fees charged on the starting balance and ignoring any growth) a fund at approximately 0.03% p.a. would cost roughly $150 in fees over the decade, while a fund at approximately 0.18% p.a. would cost roughly $900, a difference of approximately $750.
In reality fees are charged on a growing balance, so over a long horizon the real gap is larger than this flat estimate. This illustration uses a simplified fee calculation and assumes nothing about investment returns. Use the ETFLens Fee Analyser for a more detailed comparison. Returns are not guaranteed.
Low-fee ETFs by category: live data table
The table below highlights a widely held low-cost option in each major category, with management fees pulled from live ETFLens data. It is a starting point, not an exhaustive ranking, the ETFLens browse page lets you sort every fund by fee.
| Category | Low-cost option | MER | Fund |
|---|---|---|---|
| Australian shares | A200 | 0.04% p.a. | Betashares Australia 200 |
| US shares | VTS | 0.03% p.a. | Vanguard US Total Market |
| Global developed shares | BGBL | 0.08% p.a. | Betashares Global Shares |
| Australian bonds | IAF | 0.1% p.a. | iShares Core Composite Bond |
| Cash | AAA | 0.18% p.a. | Betashares Australian High Interest Cash |
MER figures are sourced from ETFLens data and may change. Even within a single category, fees can vary several-fold between funds, so the lowest-cost option is not always the largest or most widely held one, the screener shows the full range. Verify current fees with the fund provider before investing.
When paying more is justified
A low fee is not the only thing that matters. Some ETFs charge more because they do something a plain index fund does not, and that extra exposure can be worth the cost for some investors.
- Factor and strategy ETFs: funds like QUAL (approximately 0.4% p.a.), MVW (approximately 0.35% p.a.) and MOAT (approximately 0.49% p.a.) weight or screen their holdings differently from the market, which a cheap market-cap index fund cannot replicate.
- Thematic ETFs: single-sector funds give targeted exposure (for example cybersecurity or clean energy) that a broad fund dilutes.
- Active ETFs: these charge more and aim to beat their benchmark, though there is no guarantee they will.
The useful question is not simply "which is cheapest" but whether you are getting meaningful additional exposure for the higher fee. If a pricier fund largely duplicates something you already own cheaply, the overlap checker will show it, and the Fee Analyser shows what the fee difference costs over time.
General information only. Not financial advice. This article does not consider your personal circumstances and does not constitute a recommendation to purchase any ETF. MER data is sourced from each issuer's published disclosure documents and reviewed quarterly; always check the current PDS for the most recent fee information before investing. Past performance is not a reliable indicator of future returns. Consider your personal circumstances and read the relevant PDS before making any investment decisions. ETFLens does not hold an Australian Financial Services Licence.