Spotlight: InvestSMART Australian Equities Portfolio

This year marks a decade since InvestSMART launched our investment portfolios, with six of our 10 ETF portfolios celebrating their 10th anniversary in 2024. We thought it would be a great opportunity to put our portfolios under the spotlight. Let's take a look at the second of our single asset class portfolios to hit the market - the Australian Equities Portfolio.

About the InvestSMART Australian Equities Portfolio

The Australian Equities Portfolio invests in one to five exchange-traded funds (ETFs) and provides diversified exposure to Australian shares. 

It is best suited to Aussies investing for longer-term goals as the minimum suggested investment timeframe is five years.

Here are a few quick facts about the Australian Equities Portfolio: 

• Inception date: 31 December 2014
• Suggested timeframe: 5-plus years
• Risk: High
• Minimum initial investment: $10,000
• Management fee: 0.44% p.a. capped at $880 p.a.
• Admin fee: 0.11% p.a. includes buy-side brokerage costs.
• Benchmark Index: S&P ASX 200 Accumulation Index

Where does the InvestSMART Australian Equities Portfolio invest?

The Australian Equities Portfolio has 99.5% invested in Australian shares with the remaining 0.5% in cash.

The Australian Equities Portfolio currently invests in the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

The top underlying ETF holdings include Commonwealth Bank, BHP Group, CSL, National Australia Bank, Westpac and ANZ.

What are the fees?

InvestSMART's annual management fee is 0.44%, which equates to $44 per year on a $10,000 investment (the minimum). The management fee is capped at $880 per year for balances of $200,000 or more.

There is a flat admin fee of 0.11% per year, which includes all buy-side brokerage costs. This means you won't pay extra when you invest or add funds. Brokerage fees apply to sell transactions (including rebalances). Brokerage costs are $4.40 per trade or 0.088% of the value of the trade (whichever is higher) and are paid entirely to a third-party broker.

There are also indirect costs charged by the underlying ETFs and for the Australian Equities Portfolio, these are estimated to be 0.05% a year.

How has the InvestSMART Australian Equities Portfolio performed?

The Australian Equities Portfolio has been a solid performer, averaging 7.51% a year since its inception in December 2014. In dollar terms, that means if you had invested $10,000 in the Australian Equities Portfolio when it first launched, your investment would have been worth $20,024 at the end of July 2024 - that's a total increase of 100.24%.

In the 12 months to the end of July 2024, the Australian Equities Portfolio provided a strong return of 12.71%. 

InvestSMART Australian Equities Portfolio performance

Returns to 31 July 2024. ¹Since inception on 31 December 2014.

How does the InvestSMART Australian Equities Portfolio compare to its peers?

The Australian Equities Portfolio has outperformed the majority of its peers both over one and five years, as well as since inception. As you can see from the table below, it has returned 7.51%p.a. since it launched in December 2024. The average annualised returns of its peer funds in this category was 5.72% over that same period.

Australian Equities Portfolio performance vs peers

Returns to 31 July 2024. ¹Since inception on 31 December 2014.

With a flat admin fee of 0.11% a year and a management fee of 0.44% per year (capped at $880 per year), the Australian Equities Portfolio's annual fee is lower than the average fee of its peer funds, which is sitting at 1.17% a year at the time of writing.

Key takeouts

The InvestSMART Australian Equities Portfolio is ideal if you are looking for exposure to the Aussie share market. It's an easy, low-cost way to achieve diversification. 

The fees are competitive and, while past performance is not a guarantee of future results, the portfolio's returns have been strong.