We think it could be time to run the rule over BetaShares Active Australian Hybrids Fund (Managed Fund) ETF (ASX: HBRD) and BetaShares Agriculture ETF-Currency Hedged (Synthetic) ETF (ASX: QAG), two ASX ETFs operate in the Fixed interest – Australia and Commodities sectors, respectively.
The BetaShares HBRD ETF (ASX:HBRD)
The BetaShares HBRD Fund provides investors with exposure to hybrids. Think of hybrids this way: companies can raise capital by either issuing debt or equity. Debt and equity each have different characteristics, advantages and disadvantages. Hybrid securities have some characteristics of both.
As at the end of last month, the HBRD ETF had $681.66 million of money invested. Given HBRD’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 Fixed interest – Australia 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 HBRD ETF is 0.55%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the HBRD ETF for a full year you could expect to pay management fees of around $11.00. 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 HBRD 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 HBRD ETF, read our free ETF investment report once you’re done with this article.
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BetaShares QAG ETF (ASX:QAG)
The BetaShares QAG ETF provides investors with exposure to a basket of the most significant global agricultural commodities, hedged into Australian dollars.
At the end of May 2020, QAG’s FUM stood at $2.83 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 QAG’s fees too high?
BetaShares charge a yearly management fee of 0.69% for the QAG ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $13.80.
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.
Did you know that you get access to our free investment report on ? View the free QAG ETF report by clicking here.