In this article, we’ll try to explain why the BetaShares Legg Mason Real Income Fund (Managed Fund) ETF (ASX: RINC) and Betashares Australia 200 ETF (ASX: A200) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the RINC ETF
The BetaShares Legg Mason RINC ETF is an actively managed fund that invests in companies that own physical assets, like A-REITs, utilities and infrastructure. These companies are expected to grow revenues and profits overtime and provide sustainable dividend income to investors.
According to our most recent data, the RINC ETF had $41.77 million of money invested. Given its funds under management (also known as FUM or ‘market cap’) is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this general rule, especially if the ETF issuer/provider is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
Like the look of the RINC ETF? Grab our ETF free investment report.
The A200 ETF – a quick look for savvy investors
The Betashares A200 ETF provides exposure to the largest 200 Australian companies, based on market capitalisation. Unlike many other Australian shares ETFs, A200 uses the Solactive Australia 200 Index. This is virtually the same thing as the indices provided by S&P/ASX, as it also uses a market capitalisation weighting.
With our numbers for July 2020, A200’s FUM stood at $798.82 million. Since the A200’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 A200 ETF bad?
Betashares, the ETF issuer, charges a yearly management fee of 0.07% for the A200 ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $1.40.
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.
The Betashares A200 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.