It’s time to put BetaShares FTSE 100 ETF (ASX: F100) and the VanEck Vectors Australian Property ETF (ASX: MVA) side-by-side.
Why would an investor want the own the BetaShares FTSE 100 ETF?
The BetaShares F100 ETF provides investors with exposure to the largest 100 blue-chip companies on the London Stock Exchange (LSE), by market capitalisation.
As at the end of last month, the F100 ETF had $135.07 million of money invested. Given F100’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.
Fees & costs
The yearly management fee on the F100 ETF is 0.45%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the F100 ETF for a full year you could expect to pay management fees of around $9.00. 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 0.5%, 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 F100 Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
Don’t stop there, to get our full F100 ETF review, click here now.
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VanEck Vectors Australian Property ETF
The VanEck MVA ETF provides investors with exposure to the Australian property market by investing in a portfolio of ASX-listed property companies and real estate investment trusts (REITs).
At the end of May 2020, MVA’s FUM stood at $213.31 million. With MVA’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 Property & Infrastructure sector should be able to scale well beyond that amount.
Are MVA’s fees too high?
VanEck charge a yearly management fee of 0.35% for the MVA ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $7.00.
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.
To keep discovering what makes the F100 ETF ‘tick’, so to speak, have a read our free ETF investment report.
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