Australian and ASX-listed ETFs like the Betashares EX20 ETF (ASX: EX20) are gaining more attention than ever because of how easy they make it for investors to get exposure to the Australian shares sector.
What does the EX20 do in a portfolio?
The BetaShares EX20 ETF provides exposure to the largest 180 Australian shares, based on market capitalisation, excluding the top 20.
EX20 surpasses our minimum level for funds under management
As at the end of last month, the EX20 ETF had $102.17 million of money invested. Given EX20’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.
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EX20 ETF fees reviewed
With a yearly management fee of 0.25% charged by Betashares, if you invested $2,000 in the EX20 ETF for a full year you could expect to pay management fees of around $5.00. 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 $10.80 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 EX20 ETF, the most recent average monthly buy-sell spread we gathered (April 2020) was 0.37%. 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.
Where to from here
These are just some of the considerations or factors you would need to look at when weighing up the EX20 ETF. Before doing anything, take a look at our Betashares EX20 report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.