There’s no single best ETF for every SMSF, but most SMSF portfolios can be built from a handful of low-cost building blocks: a diversified core (an all-in-one ETF like DHHF or VDHG, or Australian and global share ETFs like A200 and BGBL), a few satellites for income or gold, and in pension phase a cash buffer to pay the pension. Low fees, good liquidity and full franking matter more in an SMSF than almost anywhere else.
Why ETFs suit SMSFs
- Low cost: core ETFs charge as little as 0.04% a year, so more of the return stays in the fund.
- Diversification in one trade: a single ETF can hold hundreds or thousands of companies, which helps the fund meet its investment strategy.
- Liquidity: ETFs trade on the ASX every day, which makes it easier to fund pension payments and lump sums.
- Simple admin: daily prices and an annual tax statement make reporting and audits easier.
- Franking credits: Australian share ETFs pass on franking, which is worth the most at the SMSF’s 15% or 0% tax rate. See franking credits and ETFs.
ETFs should be held in the SMSF’s name, separate from your personal investments, and fit the fund’s written investment strategy. More on the rules in our SMSF essentials.
Watch: SMSF vs industry funds, and the simple three-part SMSF portfolio.
ETFs commonly used in SMSFs
These are some of the largest, lowest-cost ETFs in each role. Filter by role or sort by fee, size or return:
| ETF | ROLE | ||||
|---|---|---|---|---|---|
Betashares Diversified All Growth | Core: all-in-one | 0.19% | $1.7bn | +8.1% | +52.4% |
Vanguard Diversified High Growth | Core: all-in-one | 0.27% | $4.1bn | +7.5% | +47.5% |
Vanguard Diversified Growth | Core: all-in-one | 0.27% | $1.6bn | +5.6% | +39.1% |
Vanguard Australian Shares | Core: Australian shares | 0.07% | $26.7bn | +2.2% | +36.0% |
Betashares Australia 200 | Core: Australian shares | 0.04% | $11.1bn | +2.9% | +36.8% |
iShares Core S&P/ASX 200 | Core: Australian shares | 0.05% | $9.7bn | +2.6% | +36.0% |
SPDR S&P/ASX 200 | Core: Australian shares | 0.05% | $6.5bn | +2.6% | +36.7% |
Vanguard MSCI International Shares | Core: global shares | 0.18% | $18.7bn | +10.1% | +64.1% |
Betashares Global Shares | Core: global shares | 0.08% | $5.5bn | +10.4% | +67.4% |
iShares S&P 500 | Core: global shares | 0.04% | $14.9bn | +10.1% | +69.5% |
Vanguard MSCI Indx International Shre (Hedged) | Core: global shares | 0.21% | $7.9bn | +17.1% | +72.0% |
Betashares Global Shares Currency Hedged | Core: global shares | 0.11% | $3.0bn | +17.4% | +75.6% |
Vanguard Australian Shares High Yield | Satellite: income | 0.25% | $8.2bn | +12.0% | +46.1% |
State Str SPDR MSCI Aus Select High Div Yield | Satellite: income | 0.20% | $739m | +14.8% | +46.7% |
Global X S&P/ASX 200 High Dividend | Satellite: income | 0.24% | $100m | +10.7% | +41.9% |
Global X S&P/ASX 200 Covered Call Complex | Satellite: income | 0.60% | $125m | +7.9% | +31.0% |
Global X Physical GOLD Structured | Satellite: gold | 0.40% | $5.8bn | +1.7% | +104.8% |
Perth Mint Gold Structured Product A | Satellite: gold | 0.15% | $2.4bn | +1.9% | +106.1% |
Vanguard Australian Fixed Interest | Defensive: bonds | 0.10% | $3.9bn | -0.4% | +10.5% |
iShares Core Composite Bond | Defensive: bonds | 0.10% | $3.7bn | -0.4% | +10.5% |
Vanguard Global Aggregate Bond (Hedged) | Defensive: bonds | 0.20% | $4.9bn | -1.2% | +10.2% |
Betashares Australian Credit Income Active | Defensive: bonds | 0.55% | $2.5bn | +4.4% | +16.2% |
Betashares Australian High Interest Cash | Cash buffer | 0.18% | $5.1bn | +4.1% | +12.7% |
iShares Core Cash | Cash buffer | 0.07% | $1.3bn | +4.0% | +12.6% |
Watch: I compare A200, VAS and IOZ, the global shares options, DHHF, and cash and bond ETFs.
Accumulation vs pension phase
The same core and satellite structure works in both phases. What changes is the cash buffer and the role of income:
Core 80%: or , or + .
Satellites 20%: themes, regions or gold, managed actively.
Core 80%: or , or Australian + global share ETFs.
Satellites 20%: income ETFs like (franking refunds are worth the most here), gold or other opportunities.
We wouldn’t go more conservative than a 70/30 fund like VDGR, even in pension phase. The cash buffer manages short-term risk, so the core can keep growing over what could be a 25+ year retirement. Watch how I build this in ETFs for retirement.
How to choose ETFs for an SMSF
Watch: David Tuckwell explains how feeder funds can strip out franking, and the distribution tax trap.
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General information only. It doesn’t consider your objectives, financial situation or needs, and it isn’t advice about whether to set up or run an SMSF. Super and tax rules change; check the ATO and consider personal advice. ETFs named are examples, not recommendations. Past performance is not a reliable indicator of future performance.
Frequently asked questions
What are the best ETFs for an SMSF?
There’s no single best ETF. Many SMSFs use a low-cost diversified core, such as DHHF, VDHG or VDGR, or Australian and global share ETFs like VAS, A200, VGS and BGBL, plus income, bond, gold or cash ETFs depending on the fund’s investment strategy and members’ needs.
Can an SMSF buy ETFs?
Yes. ETFs are among the most common SMSF investments. They should be held in the fund’s name and fit the fund’s written investment strategy.
Do SMSFs get franking credits from ETFs?
Yes. Australian share ETFs pass on franking credits. With earnings taxed at 15% in accumulation and generally 0% in pension phase, excess credits can be refunded to the fund.
Should an SMSF in pension phase hold growth ETFs?
A pension can last 25 years or more, so many SMSFs keep a growth core and manage short-term risk with a cash buffer of two to three years of pension payments. The right mix depends on the members’ needs and risk tolerance.
Are geared ETFs allowed in an SMSF?
Some SMSFs hold internally geared ETFs, but they’re higher risk and must fit the investment strategy. We’ve left geared and leveraged ETFs out of this list.