2020 ETF watch: VanEck GDX & BetaShares NDQ

On the ASX, the VanEck Vectors Gold Miners ETF (ASX: GDX) and BetaShares NASDAQ 100 ETF (ASX: NDQ) are two ASX ETFs worthy of closer inspection.

What the VanEck GDX does for investors

The VanEck GDX ETF gives investors exposure to companies from around the world which are involved primarily in gold mining.

As at the end of last month, the GDX ETF had $279.83 million of money invested. Given GDX’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 GDX ETF is 0.53%. The issuer, VanEck, takes this out automatically.

What this fee means is, if you invested, say, $2,000 in the GDX ETF for a full year you could expect to pay management fees of around $10.60. 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 GDX 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 GDX ETF by clicking here?

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Why does the BetaShares NDQ ETF do?

The BetaShares NDQ ETF provides investors with exposure to the performance of the 100 largest non-financial companies listed on the NASDAQ stock market, weighted by market capitalisation.

At the end of May 2020, NDQ’s FUM stood at $876.64 million. With NDQ’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 NDQ’s fees too high?

BetaShares charge a yearly management fee of 0.48% for the NDQ ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $9.60.

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 NDQ ETF, you should know that you can access our free investment report.

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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.

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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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