Like us, you’re probably looking at the iShares S&P Asia 50 ETF (ASX: IAA) and thinking now could be a good to consider taking a closer look.
1. What the IAA does for investors
The iShares IAA ETF provides exposure to the performance of 50 large, established Asian companies listed on the stock exchanges of China, Hong Kong, South Korea, Singapore, Taiwan, and Macau.
2. Funds Under Management (FUM)
As at the end of last month, the IAA ETF had $523.08 million of money invested. Given IAA’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.
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3. It’s all about the fees & costs
With a yearly management fee of 0.5% charged by iShares, if you invested $2,000 in the IAA ETF for a full year you could expect to pay management fees of around $10.00. 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 IAA ETF, the most recent average monthly buy-sell spread we gathered (April 2020) was 0.45%. 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.
These are just some of the considerations or factors you would need to look at when weighing up the IAA ETF. Before doing anything, take a look at our iShares IAA report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.