In a research note sent to clients, Morgan Stanley Wealth Management's Nathan Lim shared the four Australian ETFs the firm prefers over the rest.
The list represents Morgan Stanley's preferred picks for Australian exposure in multi-asset portfolios, sent out late in September.
BetaShares and BlackRock's products made the cut for vanilla ASX 200 exposure.
The more expensive of the two, the BlackRock iShares CORE S&P/ASX 200 (ASX:IOZ) got Morgan Stanley's tick of approval, with the analysts noting its low tracking error.
BetaShares Australia 200 ETF (ASX: A200) was an obvious addition, with the analysts noting it as the cheapest way to access the ASX 200. This is despite recent fee cuts from competitors Vanguard and BlackRock.
For a dividend objective, Morgan Stanley noted ETFSecurities' S&P/ASX 300 High Yield Plus ETF (ASX: ZYAU), noting that the trailing 12-month total return to September 26 is 8.65% including a yield of 5.12%. This excludes the 57.7% franking level.
Only one sector-based ETF made the cut - the resources fund from State Street.
SPDR S&P/ASX 200 Resources Fund (ASX: OZR) had 61% invested in top five holdings of BHP Group, Rio Tinto, Woodside Petroleum, Newcrest Mining, and Fortescue Metals.