We think it could be time to run the rule over BetaShares Sustainability leaders Diversified Bond ETF – Currency Hedged ETF (ASX: GBND) and ETF Securities Reliance India Nifty 50 ETF (ASX: NDIA), two ASX ETFs operate in the Fixed interest – International and International shares sectors, respectively.
The BetaShares GBND ETF (ASX:GBND)
The BetaShares GBND ETF provides investors with exposure to a portfolio of fixed-rate, investment-grade global and Australian bonds, with a significant allocation to “green bonds” which are issued to directly fund projects that have positive environmental and/or climate benefits.
As at the end of last month, the GBND ETF had $52.33 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 GBND ETF is 0.49%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the GBND 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 GBND Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
To learn more about the GBND ETF, read our free ETF investment report once you’re done with this article.
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ETF Securities NDIA ETF (ASX:NDIA)
The ETFS NDIA ETF provides investors with exposure to the performance of shares of the largest companies listed on the Indian stock market, based on market capitalisation.
At the end of May 2020, NDIA’s FUM stood at $11.04 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 Index sector ETFs, using our full list.
Are NDIA’s fees too high?
ETF Securities charge a yearly management fee of 1% for the NDIA ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $20.00.
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.
Did you know that you get access to our free investment report on ? View the free NDIA ETF report by clicking here.