On the ASX, the ETF Securities Physical Platinum ETF (ASX: ETPMPT) and Montgomery Global Equities Fund (Managed Fund) ETF (ASX: MOGL) are two ASX ETFs worthy of closer inspection.
What the ETF Securities ETPMPT does for investors
The ETFS ETPMPT ETF provides investors with access to the precious metal of platinum, by seeking to achieve a return equivalent to the movements in the platinum spot price, before fees and expenses.
As at the end of last month, the ETPMPT ETF had $5.69 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 ETPMPT ETF is 0.49%. The issuer, ETF Securities, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the ETPMPT ETF for a full year you could expect to pay management fees of around $9.80. 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 0.5%, which is around $10.00 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 ETPMPT 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 ETPMPT ETF by clicking here?
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Why does the Montgomery MOGL ETF do?
The Montgomery MOGL Fund is an actively-managed portfolio that invests in a concentrated portfolio of global equities. The fund typically selects between 15-30 global equities and aims to pay a distribution of at least 4.5% per year.
At the end of May 2020, MOGL’s FUM stood at $80.5 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 Active ETF (e.g. ETMF) sector ETFs, using our full list.
Are MOGL’s fees too high?
Montgomery charge a yearly management fee of 1.32% for the MOGL ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $26.40.
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 MOGL ETF, you should know that you can access our free investment report.
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