Are you sitting back and thinking it could be time to start analysing the BetaShares Diversified Balanced ETF (ASX: DBBF) and BetaShares Global Income Leaders ETF (ASX: INCM)? These two ASX ETFs aim to provide conveninent exposure to the Diversified ETF and International shares sectors, respectively.
Why investors choose the DBBF ETF
The BetaShares DBBF ETF provides investors with a low-cost, diversified portfolio of assets, including shares, property securities, bonds and cash, across Australian and global markets.
As at the end of last month, the DBBF ETF had $2.36 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 DBBF ETF is 0.26%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the DBBF ETF for a full year you could expect to pay management fees of around $5.20. 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 DBBF Product Disclosure Statement (PDS) because it has the complete and updated information on all fees.
Make sure you check out our DBBF ETF report, available free when you clock here: access the free investment report.
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A look at the INCM ETF
The BetaShares INCM ETF provides investors with exposure to a diversified global portfolio of 100 high-yielding companies (ex-Australia), with a focus on companies that are able to generate sustainable income for investors.
At the end of April 2020, INCM’s FUM stood at $16.49 million. With less than $100 million invested, it’s important to consider if this ETF is still too small and you should wait to buy in. If you’re worried about the size of the ETF, consider comparing it alongside some of the other Yield/income sector ETFs, using our full list.
Are INCM’s fees too high?
BetaShares charge a yearly management fee of 0.45% for the INCM ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $9.00.
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.
If you like what you’re reading, access our full review of the INCM ETF by clicking here