We think the Platinum Funds Management Asia Fund (Quoted Managed Hedge Fund) ETF (ASX: PAXX) and Vanguard International Fixed Interest Index (Hedged) ETF (ASX: VIF) ASX ETFs could be worthy of closer inspection. Here’s why…
1. The Platinum Funds Management PAXX ETF (ASX:PAXX) ETF
The Platinum PAXX Fund is an actively-managed fund that invests in a diversified portfolio of Asian companies, excluding Japan. The fund typically selects between 50-100 Asian companies that the investment team at Platinum believe to be undervalued by the market.
According to our most recent data, the PAXX ETF had $148.72 million of money invested. With PAXX’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 PAXX ETF is 1.1%. The issuer, Platinum Funds Management, collects this fee automatically.
Meaning, if you invested $2,000 in the PAXX ETF for a full year you could expect to pay management fees of around $22.00. 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 PAXX Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Want to hear more about the PAXX ETF? View our free investment review.
2. The Vanguard VIF ETF (ASX:VIF) ETF
The Vanguard VIF ETF provides investors with exposure to high-quality securities issued by governments from around the world.
With our numbers for July 2020, VIF’s FUM stood at $520.49 million. Since the VIF’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 VIF ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.2% for the VIF ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $4.00.
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.
Want to know more? Get our team’s free PAXX ETF review. Simply click here now.
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