ETF battle: QFN Vs. HVST

It’s time to put Betashares Australian Dividend Harvester Fund (Managed Fund) ETF (ASX: HVST) and the Betashares S&P/ASX 200 Financials Sector ETF (ASX: QFN) side-by-side.

Why would an investor want the own the Betashares Australian Dividend Harvester Fund (Managed Fund) ETF?

With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.

As at the end of last month, the HVST ETF had $129.13 million of money invested. Given HVST’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 HVST ETF is 0.9%. The issuer, Betashares, takes this out automatically.

What this fee means is, if you invested, say, $2,000 in the HVST ETF for a full year you could expect to pay management fees of around $18.00. 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 HVST 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 HVST ETF review, click here now.

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Betashares S&P/ASX 200 Financials Sector ETF

The BetaShares QFN ETF is a more unique ETF that invests in financial companies from within the ASX 200, while excluding A-REITs. This ETF has a substantial exposure to the ‘Big 4’ Australian banks.

At the end of May 2020, QFN’s FUM stood at $13.43 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 QFN’s fees too high?

Betashares charge a yearly management fee of 0.39% for the QFN 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.

To keep discovering what makes the HVST ETF ‘tick’, so to speak, have a read our free ETF investment report.

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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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