Want to invest ethically for a brighter future?
(but still make lots of money)?

Want to invest ethically for a brighter future? (but still make lots of money)?

 Take Rask’s FREE Ethical Investing course today.

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Want to invest ethically for a brighter future? 
(but still make lots of money)?

 Take Rask’s FREE online Ethical Investing course.

Is The UBA ETF A Better Ethical ETF Than Betashares FAIR?

Ethical investing has grown to be extremely popular over the last few years, as has the use of ASX ETFs. Combine the two and you get the UBS IQ MSCI Australia Ethical ETF (ASX: UBA).

ASX ETFs Vs. LICs

Is UBA The Best Ethical ETF?

UBS Australia’s Ethical ETF (UBA) started in February 2015, making it one of the more established ethical ETFs. It holds shares in !70 companies at any given point and aims to track the performance of the MSCI Australia ex Tobacco ex Controversial Weapons Index.

The UBA ETF has just over $185 million of money invested in it (meaning that’s the market capitalisation). While this pales in comparison to the size of competitors such as the BetaShares Australian Sustainability Leaders ETF (ASX: FAIR), it offers lower management fees and much higher dividends.

The UBA ETF uses a negative screening approach to avoid companies involved in the tobacco or weapons industries, but apart from that, it invests in some of the largest companies on the ASX. This Rask Media article explains negative screening in more detail.

In the past three years, the UBA ETF has returned an average of 11.83% annually, although much of this performance comes from dividends rather than capital growth. UBA’s current trailing dividend yield is 5.44%, 66.45% franked.

UBA Fees & Risks

UBA’s fees are lower than most other ethical ETFs with an annual management fee of only 0.17% per year.

Capital growth has not been a strength of the UBA ETF so it might be best considered as a dividend ETF.

Another point is that some investors may not consider this a true ethical ETF. Depending on your approach, you may be looking for an ETF that actively seeks out ethical companies that are operating in areas such as renewable energy. While this may not be considered a risk, it’s important to note that the UBA ETF doesn’t take a noticeably proactive approach to ethical investing.

UBA ETF – My Take

The UBA ETF is one of the more appealing ethical ETFs in terms of dividend yield and management fees, but it lacks capital growth. Personally, if I was going to invest in an ethical ETF, I would also prefer one that actively seeks ethical companies rather than just excluding companies in a select industry. You can read more about the Betashares FAIR ETF by clicking here, or  Betashares ETHI (ASX: ETHI) by clicking here.

For our number one ETF pick, check out the free report below.

Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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