If you’re looking for an ASX ETF in the Fixed interest – Australia sector, chances are, the BetaShares Australian Bank Senior Floating Rate Bond ETF (ASX: QPON) is an ETF you’re considering.
How Australian investors can use the QPON ETF
The BetaShares QPON ETF provides investors with exposure to a portfolio of some of the largest and most liquid senior floating rate bonds issued by Australian banks.
QPON exceeds our minimum market cap (FUM) criteria
The QPON ETF had $717.32 million of money invested when we last pulled the monthly numbers. Given QPON’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.
Don’t forget the fees (and other costs)
With a yearly management fee of 0.22% charged by BetaShares, if you invested $2,000 in the QPON ETF for a full year you could expect to pay management fees of around $4.40. For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
In addition to a yearly management fee, there are other costs investors must consider, including brokerage and taxes. A specific cost for ETF and mFund investors to consider is the buy-sell spread, which is the slippage or ‘invisible’ cost paid by an investor when he or she buys or sells the ETF. For the QPON ETF, the most recent average monthly buy-sell spread we gathered (July 2020) was 0.07%. Remember, the lower (or ‘tighter’) the buy-sell spread, the better. This buy-sell spread was below the average ETF spread of 0.43%, so that’s a good thing.
Putting it all together
If you’re weighing up investing in QPON, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free BetaShares QPON report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the Fixed interest – Australia sector to compare your options.