Don’t you wonder if now is the time to start analysing the iShares S&P Global Consumer Staples ETF (ASX: IXI) and BetaShares U.S Dollar ETF (ASX: USD)? These Exchange-Traded Funds (ETFs) aim to provide exposure to the International shares and US dollar sectors, respectively.
Is the IXI ETF a good investment? Here’s where you start…
The iShares IXI ETF provides investors with targeted exposure to global consumer staple companies. Think along the lines of milk, chocolate, soft drink, makeup, clothes and wine.
According to our most recent data, the IXI ETF had $117.68 million of money invested. With IXI’s total funds under management (FUM) figure over $100 million, the ETF meets our team’s minimum investment criteria for FUM levels. As a general rule, our team draws the line at $100 million for ETFs in the International shares sector because we believe that, relative to smaller ETFs, achieving this amount of FUM lowers the chance that the ETF issuer will close the ETF.
Fees to consider
According to our numbers, the annual management fee on the IXI ETF is 0.47%. The issuer, iShares, collects this fee automatically.
Meaning, if you invested $2,000 in the IXI ETF for a full year you could expect to pay management fees of around $9.40. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.), which is the fee to buy or sell the ETF. In addition to a management fee charged by the issuer, be mindful to check the ‘spread‘ for the ETF.
A fee comparison
Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you’re looking at is too costly, compare it with other ETFs from the same sector, and against the industry average. For example, the average management fee (MER) across all of the ETFs covered by the Best ETFs Australia team was 0.51%, which is $10.20 per $2,000 invested. Keep in mind that small changes in the fees paid can make a big difference after 10 or 20 years. You should read the IXI Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Get our team’s IXI ETF review, available free when you click this link: access the free investment report.
A quick take of the USD ETF
The BetaShares USD ETF provides investors with exposure to the performance of the US dollar, relative to the Australian dollar.
With our numbers for July 2020, USD’s FUM stood at $274.05 million. Since the USD’s FUM is over $100 million, our investing team would say the ETF has met our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the Index sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the USD ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.45% for the USD ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $9.00.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Did you know: you can get our full ETF review of USD by clicking here?