Best ETF match-up: VDGR Vs. MVA

Could now be your opportunity to place the VanEck Vectors Australian Property ETF (ASX: MVA) and the Vanguard Diversified Growth Index ETF (ASX: VDGR) on your ASX investing watchlist?

Why do investors own the VanEck Vectors Australian Property ETF?

The VanEck MVA ETF provides investors with exposure to the Australian property market by investing in a portfolio of ASX-listed property companies and real estate investment trusts (REITs).

According to our most recent data, the MVA ETF had $214.27 million of money invested. With MVA’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 Australian 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 MVA ETF is 0.35%. The issuer, VanEck, collects this fee automatically.

Meaning, if you invested $2,000 in the MVA ETF for a full year you could expect to pay management fees of around $7.00. 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 MVA Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.

Don’t stop here, to get our full MVA ETF review, click through to this ETF review page now.

Vanguard Diversified Growth Index ETF

The Vanguard VDGR ETF provides investors with exposure to a portfolio of other Vanguard funds. This ETF gives investors exposure to multiple asset classes with a single purchase, and is designed to be a diversified portfolio in itself.

With our numbers for July 2020, VDGR’s FUM stood at $258.8 million. Since the VDGR’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 Diversified sector should be able to scale well and become profitable for the ETF issuer.

Are the fees for the VDGR ETF bad?

Vanguard, the ETF issuer, charges a yearly management fee of 0.27% for the VDGR ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.40.

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.

To discover more facts about the MVA ETF, read our free ETF investment report.

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