Are you sitting back and thinking it could be time to start analysing the BetaShares Japan ETF – Currency Hedged ETF (ASX: HJPN) and BetaShares Commodities Basket ETF-Currency Hedged (Synthetic) ETF (ASX: QCB)? These two ASX ETFs aim to provide conveninent exposure to the International shares and Commodities sectors, respectively.
Why investors choose the HJPN ETF
The BetaShares HJPN ETF provides investors with exposure to leading Japanese equities, that generate most of their revenue from outside Japan. This ETF is hedged into AUD, to reduce exposure to the Japanese Yen.
As at the end of last month, the HJPN ETF had $29.24 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 HJPN ETF is 0.58%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the HJPN ETF for a full year you could expect to pay management fees of around $11.60. 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 HJPN 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 HJPN ETF report, available free when you clock here: access the free investment report.
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A look at the QCB ETF
The BetaShares QCB ETF provides investors with exposure to the performance of a broad basket of commodities, hedged into Australian dollars.
At the end of May 2020, QCB’s FUM stood at $6.3 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 QCB’s fees too high?
BetaShares charge a yearly management fee of 0.69% for the QCB 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.
If you like what you’re reading, access our full review of the QCB ETF by clicking here