What you need to know about the EBND ETF
The VanEck EBND ETF is an actively-managed ETF which provides investors with exposure to a portfolio of bonds and currencies from a range of emerging markets.
As at the end of last month, the EBND ETF had $10.62 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 EBND ETF is 0.95%. The issuer, VanEck, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the EBND ETF for a full year you could expect to pay management fees of around $19.00. This fee is 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. Small changes in fees can make a big difference after 10 or 20 years. To understand all of the fees, you should read the EBND Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
If you want to learn more about the EBND ETF, take a look at our ETF free investment report.
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The IVE ETF
The iShares IVE ETF provides investors with exposure to over 900 companies from Europe, Australia, Asia, and the Far East. This is a low-cost way to access a variety of global companies through a single fund.
At the end of April 2020, IVE’s FUM stood at $350.33 million. With IVE’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 IVE’s fees too high?
iShares charge a yearly management fee of 0.31% for the IVE ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $6.20.
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 IVE 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.