Why we’re watching Betashares’s Australian Dividend Harvester Fund (Managed Fund) ETF

Australian and ASX-listed ETFs like the Betashares HVST ETF (ASX: HVST) 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 HVST do in a portfolio?

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.

HVST surpasses our minimum level for funds under management

As at the end of last month, the HVST ETF had $126.79 million of money invested. Given HVST’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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HVST ETF fees reviewed

With a yearly management fee of 0.9% charged by Betashares, if you invested $2,000 in the HVST ETF for a full year you could expect to pay management fees of around $18.00. 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 HVST ETF, the most recent average monthly buy-sell spread we gathered (April 2020) was 0.24%. 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 HVST ETF. Before doing anything, take a look at our Betashares HVST report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.

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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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