Compare AEX ETF: iShares or VanEck?
When it comes to passive investing in the Dutch stock market, you will soon end up with an AEX ETF. Two popular options that investors often consider are the VanEck AEX ETF and the iShares AEX ETF . However, it is important not to randomly choose one of the two, do your homework and make a well-considered choice. In this blog we discuss these two providers and highlight important differences between the two. This way you can make a well-considered investment decision.
The best AEX ETF: Comparison of providers iShares & VanEck
Many Dutch investors choose to invest in the AEX index . This index contains the 25 largest companies in the Netherlands (view the AEX companies ). With an ETF, you can invest in the entire index with one transaction. Want to know more about an AEX ETF in general? Then read our blog about AEX ETFs .
Have you decided to invest in an AEX ETF? Then the two largest providers are: iShares AEX and VanEck AEX. Let’s take a closer look at these two providers and compare them with each other.
In the table below a summary of the comparison between the VanEck AEX ETF and the iShares AEX ETF. Read the blog for more information.
| # | ETF Name & ISIN Code | Running costs | Tracking error | Dividend leakage |
|---|
| 1 | iShares AEX UCITS ETF (IE00B0M62Y33) | 0,30% | Beta: 0.96 | And |
| 2 | VanEck AEX UCITS ETF (NL0009272749) | 0,30% | Beta: 0.96 | Nee |
iShares AEX ETF: What is it?
iShares is a collective name for various funds on the stock exchange. These are managed by fund house BlackRock. This is one of the largest asset managers in the world. iShares is also one of the largest providers of ETFs, with over 700 products. The first ETFs from iShares were known as World Equity Benchmark Shares, but now have the new name.
The iShares AEX ETF aims to track the performance of the AEX index and offer investors exposure to the Dutch stock market. The ETF invests in a diversified portfolio of shares that are part of the AEX index, with the focus on replicating the AEX index as closely as possible.
VanEck AEX ETF: What is it?
On the one hand, you have the VanEck AEX ETF. Just like the iShares AEX ETF, the VanEck AEX ETF has the same goal. Since its foundation, VanEck has been a private company owned by the Van Eck family. The company was founded in 1955 to provide American investors with access to investment opportunities in the post-war economy. Since then, the company has grown internationally. Since 2006, the company has been involved in ETFs. In 2018, VanEck acquired the Dutch ETF provider ‘Think ETF’.
Like the iShares ETF, the VanEck ETF attempts to replicate the index by investing in a diversified portfolio of shares that are part of the AEX index.
iShares AEX ETF and VanEck AEX ETF compared
Although both VanEck AEX ETF and iShares AEX ETF aim to track the performance of the AEX index, there are some important differences between the two that investors should take into account. You can compare an ETF by looking at factors such as yields and costs, but also things like liquidity, trading volume and replication. Of course, there are more factors that can be compared, but in this blog we will take these factors as a starting point.
The ETFs have many similarities, logically given that they both follow the same index. Comparing the ETFs on diversification therefore does not make much sense. They both follow the 25 largest Dutch companies.
Performance comparison: yield & dividend
One of the most important factors that investors often look at when comparing ETFs is their historical performance. While past performance is not indicative of future results, it can provide insight into how the ETF has performed in different market conditions.
Based on historical performance, VanEck AEX ETF and iShares AEX ETF have shown similar returns in recent years, closely tracking the performance of the AEX index. However, it is important to note that market conditions can change and the performance of the two ETFs may vary in the future.
Historical yield
If we look at history, we see no major differences in terms of return. The table below shows the annualized return for 3 years, 5 years and 10 years. Annualized means that the return from 10 years ago has been calculated as a return on an annual basis.
| # | ETF Name & ISIN Code | 3 years | 5 years | 10 years |
|---|
| 1 | iShares AEX UCITS ETF (IE00B0M62Y33) | 5,43% | 6,23% | 9,45% |
| 2 | VanEck AEX UCITS ETF (NL0009272749) | 5,68% | 6,54% | 9,81% |
Dividend: iShares AEX or VanEck AEX
In addition to dividends, you can also have returns with an ETF through the distributed dividend. Both ETFs pay out dividends, so there is no difference. Both pay out the profit and do not automatically reinvest it. They both pay out this dividend once per quarter.
In terms of dividend tax, you need to look at the country of origin. For the ETFs in question, this is as follows:
- iShares AEX ETF is based in Ireland
- VanEck AEX ETF is based in the Netherlands
Where the ETFs do differ is whether there is dividend leakage . VanEck AEX ETF is listed in the Netherlands and therefore has no leakage. The iShares AEX ETF does have leakage. This is the main difference between the two ETFs.
iShares ETF and VanEck ETF costs
Another important factor to consider when comparing ETFs is the cost of investing in them. This includes the expense ratio, the annual fee charged by the ETF issuer for managing the fund, and other costs such as trading commissions and bid-ask spreads.
In terms of expense ratio, VanEck AEX ETF and iShares AEX ETF have the same costs. However, as an investor, you should carefully read the prospectus and other documents of the ETF issuers to gain insight into the exact cost structure of each ETF and how it can affect your total investment return. You can easily do this by looking at the website of the provider. The annual ongoing charges (TER) are indicated on both websites at 0.30%.
Management style and investment approach
The management style and investment approach of an ETF can also differ and can affect the performance and risk profile of the fund. Management style refers to how the fund is managed, for example actively managed or passively managed. Investment approach refers to the strategy the fund uses to select and manage its investments.
VanEck AEX ETF and iShares AEX ETF are both passively managed funds, which means that the fund tries to replicate the AEX Index as closely as possible without actively selecting individual stocks. However, the ETFs can deviate from the AEX Index by using other optimization techniques to minimize tracking error.
Replication: iShares AEX ETF & VanEck AEX ETF
Both ETFs also have a physical replication. This means that both ETFs actually invest in the shares of the index that is being followed. In this case, it means that both ETFs actually buy the shares of companies in the AEX.
Conclusion: iShares AEX ETF or VanEck AEX ETF?
In conclusion, VanEck AEX ETF and iShares AEX ETF are both popular ETFs that offer investors the opportunity to invest in the AEX Index. They are similar, but there are some differences in, for example, liquidity, trading volume, management style and investment approach. It is important for investors to carefully weigh the pros and cons of each fund and base their choice on their own investment objectives and risk appetite.
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