What you need to know about the CORE ETF
The ETFS CORE ETF provides investors with exposure to the performance of shares from the largest infrastructure-focused companies listed on global markets, with weightings tilted towards the shares with lower volatility.
As at the end of last month, the CORE ETF had $19.39 million of money invested. Since its funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this rule of thumb, especially if the ETF issuer/provider is committed to growing the ETF’s FUM to the point where it becomes profitable.
Fees & costs
The yearly management fee on the CORE ETF is 0.45%. The issuer, ETF Securities, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the CORE ETF for a full year you could expect to pay management fees of around $9.00. 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 CORE Product Disclosure Statement (PDS) because it has the complete and updated information on all fees.
If you want to learn more about the CORE ETF, take a look at our ETF free investment report.
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The ILB ETF
The iShares ILB ETF provides investors with exposure to the performance of a segment of the Australian bond market comprised of inflation-linked fixed income securities.
At the end of April 2020, ILB’s FUM stood at $131.53 million. With ILB’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 Index sector should be able to scale well beyond that amount.
Are ILB’s fees too high?
iShares charge a yearly management fee of 0.18% for the ILB ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $3.60.
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.
The iShares ILB ETF is one for the watchlist, but if you want to access our full ETF review, simply click here to get our full report – it’s free.