In this article, we’ll try to explain why the Vaneck Australian Equal Weight ETF (ASX: MVW) and Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the MVW ETF
The VanEck MVW ETF provides exposure to over 60 of the largest and most liquid Australian shares, equally weighted. By equally weighting shares, this ETF aims to reduce concentration risk in specific Australian stocks and sectors.
According to our most recent data, the MVW ETF had $1066.86 million of money invested. With MVW’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.
Like the look of the MVW ETF? Grab our ETF free investment report.
The VGAD ETF – a quick look for savvy investors
The Vanguard VGAD ETF provides exposure to listed companies from developed markets around the world excluding Australia. This ETF is hedged to Australian dollars to minimise the impact of currency fluctuations.
With our numbers for July 2020, VGAD’s FUM stood at $1060.78 million. Since the VGAD’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 VGAD ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.21% for the VGAD ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $4.20.
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.
The Vanguard VGAD ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.
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