We think it could be time to run the rule over Betashares Australia 200 ETF (ASX: A200) and Betashares Australian Dividend Harvester Fund (Managed Fund) ETF (ASX: HVST), two ASX ETFs both operating in the Australian Dividend Harvester Fund (Managed Fund) ETF sector.
The Betashares A200 ETF (ASX:A200)
The Betashares A200 ETF provides exposure to the largest 200 Australian companies, based on market capitalisation. Unlike many other Australian shares ETFs, A200 uses the Solactive Australia 200 Index. This is virtually the same thing as the indices provided by S&P/ASX, as it also uses a market capitalisation weighting.
As at the end of last month, the A200 ETF had $676.74 million of money invested. Given A200’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 Australian shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM derisks the ETF.
Fees & costs
The yearly management fee on the A200 ETF is 0.07%. The issuer, Betashares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the A200 ETF for a full year you could expect to pay management fees of around $1.40. These fees would be automatically deducted from your investment. This does not include any performance fees, and it’s different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.) to buy or sell the ETF. Importantly, you should also be mindful of the ‘spread‘ for the ETF.
Is the ETF too expensive?
The easiest way to know if the ETF is too costly is to compare it with other ETFs in the same sector, and against the industry average. The average management fee (MER) across all of the ETFs covered by Best ETFs Australia is 0.54%, which is around $10.80 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years. What’s more, you should read the A200 Product Disclosure Statement (PDS) because it has the complete and updated information on all fees.
To learn more about the A200 ETF, read our free ETF investment report once you’re done with this article.
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Betashares HVST ETF (ASX:HVST)
With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.
At the end of April 2020, HVST’s FUM stood at $126.79 million. With HVST’s FUM over $100 million, we say the ETF has met our minimum criteria for the total amount invested. However, in reality, a very sustainable ETF in the Yield/income sector should be able to scale well beyond that amount.
Are HVST’s fees too high?
Betashares charge a yearly management fee of 0.9% for the HVST ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $18.00.
The management fee is above the average for all ETFs on our radar, but keep in mind the ETF may be able to justify it.
Did you know that you get access to our free investment report on ? View the free HVST ETF report by clicking here.