Are you sitting back and thinking it could be time to start analysing the Betashares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20) and Morningstar International Shares Active ETF (Managed Fund) ETF (ASX: MSTR)? These two ASX ETFs aim to provide conveninent exposure to the Australian shares and International shares sectors, respectively.
Why investors choose the EX20 ETF
The BetaShares EX20 ETF provides exposure to the largest 180 Australian shares, based on market capitalisation, excluding the top 20.
As at the end of last month, the EX20 ETF had $110.64 million of money invested. Given EX20’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 Australian 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 EX20 ETF is 0.25%. The issuer, Betashares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the EX20 ETF for a full year you could expect to pay management fees of around $5.00. 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 EX20 Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
Make sure you check out our EX20 ETF report, available free when you clock here: access the free investment report.
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A look at the MSTR ETF
The Morningstar MSTR Fund is an actively-managed fund that invests in a select portfolio of international companies for long-term capital growth. The fund hedges its exposure against the Australian dollar to manage currency risks.
At the end of May 2020, MSTR’s FUM stood at $10.59 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 MSTR’s fees too high?
Morningstar charge a yearly management fee of 0.39% for the MSTR ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $7.80.
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 like what you’re reading, access our full review of the MSTR ETF by clicking here