On the ASX, the BetaShares Asia Technology Tigers ETF (ASX: ASIA) and VanEck Vectors FTSE Global Infrastructure (Hedged) ETF (ASX: IFRA) are two ASX ETFs that could be worthy of closer inspection.
1. BetaShares ASIA ETF (ASX:ASIA) – what you need to know
The BetaShares ASIA ETF provides investors with exposure to shares of the largest technology and online retail companies, that have their main area of business in Asia (excluding Japan).
As at the end of last month, the ASIA ETF had $113.88 million of money invested. Given ASIA’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.
Fees & costs
The yearly management fee on the ASIA ETF is 0.67%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the ASIA ETF for a full year you could expect to pay management fees of around $13.40. 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 ASIA Product Disclosure Statement (PDS) because it has the complete and updated information on all fees.
If you like the sound of the ASIA ETF, view our free investment report.
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2. The basics of the VanEck IFRA ETF (ASX:IFRA)
The VanEck IFRA ETF provides investors with exposure to a portfolio of infrastructure securities from developed markets around the world.
At the end of April 2020, IFRA’s FUM stood at $209.02 million. With IFRA’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 Property & Infrastructure sector should be able to scale well beyond that amount.
Are IFRA’s fees too high?
VanEck charge a yearly management fee of 0.52% for the IFRA ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $10.40.
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.
To get our full ASIA ETF review, click here now.
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