A look at the SPDR DJRE ETF

If you’re considering getting exposure to the International shares sector, the SPDR Dow Jones Global Select Real Estate Fund ETF (ASX: DJRE) might be one ASX ETF to watch in May.

What does the SPDR DJRE actually do?

The DJRE ETF by SPDR invests in global shares/securities of listed real estate investment trusts (REITs). Investors can use these property-focused ETFs to get global exposure to a broad basket of trusts and companies exposed to property, including office spaces, commercial rental spaces and construction projects.

DJRE meets our minimum FUM criteria

As at the end of last month, the DJRE ETF had $287.28 million of money invested. Given DJRE’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the International shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM derisks the ETF.

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Don’t forget the fees (and other costs)

With a yearly management fee of 0.5% charged by SPDR, if you invested $2,000 in the DJRE ETF for a full year you could expect to pay management fees of around $10. This does not include any performance fees earned by the ETF’s manager for doing a good job. For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.54% or around $10.8 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.

In addition to a yearly management fee, there are other costs investors must consider, including brokerage and taxes. A specific cost for ETF and mFund investors to consider is the buy-sell spread, which is the slippage or ‘invisible’ cost paid by an investor when he or she buys or sells the ETF. For the DJRE ETF, the most recent average monthly buy-sell spread we gathered (April 2020) was 0.4%. Remember, the lower (or ‘tighter’) the buy-sell spread, the better. This buy-sell spread was below the average ETF spread of 0.51%, so that’s a good thing.

Next steps

Before buying any ETF based on what you read here, feel free to read our free SPDR DJRE report. Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector.

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Disclaimer: Any information contained in this article is limited to general financial advice/information only. The information should not be relied upon because it has not taken into account your specific needs, goals or objectives. Please, consult a licenced and trusted financial adviser before acting on the information. Past performance is no guarantee of future performance. Nothing in this article should be considered a guarantee. Investing is risky and can result in capital loss. By reading this website, you acknowledge this warning and agree to our terms & conditions available here. This article is authorised by Owen Raszkiewicz of The Rask Group Pty Ltd.


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