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(but still make lots of money)?

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2020 ETF watch: Perennial Value/eInvest EIGA & iShares IWLD

On the ASX, the Perennial Value/eInvest Income Generator Fund (Managed Fund) ETF (ASX: EIGA) and iShares Core MSCI World All Cap ETF (ASX: IWLD) are two ASX ETFs worthy of closer inspection.

What the Perennial Value/eInvest EIGA does for investors

The eInvest EIGA Fund invests in a diversified portfolio of high-yielding Australian companies and provides distributions on a monthly basis. EIGA is an actively-managed fund, with a focus on capital preservation.

As at the end of last month, the EIGA ETF had $20.21 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 EIGA ETF is 0.8%. The issuer, Perennial Value/eInvest, takes this out automatically.

What this fee means is, if you invested, say, $2,000 in the EIGA ETF for a full year you could expect to pay management fees of around $16.00. 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 EIGA Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.

Side note: did you know you can access our full review of the EIGA ETF by clicking here?

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Why does the iShares IWLD ETF do?

The iShares IWLD ETF provides investors with exposure to a globally diversified portfolio of over 3,800 companies. This is a low-cost way to access global companies from developed markets through a single fund.

At the end of April 2020, IWLD’s FUM stood at $116.48 million. With IWLD’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 IWLD’s fees too high?

iShares charge a yearly management fee of 0.09% for the IWLD ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $1.80.

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 want to learn more about the IWLD ETF, you should know that you can access our free investment report.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

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This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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