Don’t you wonder if now is the time to start analysing the Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD) and VanEck Vectors MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT)? These Exchange-Traded Funds (ETFs) operate in the International shares sector, a key sector for diversified portfolios.
Is the VGAD ETF a good investment? Here’s where you start…
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.
According to our most recent data, the VGAD ETF had $1060.78 million of money invested. With VGAD’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.
Get our team’s VGAD ETF review, available free when you click this link: access the free investment report.
A quick take of the EMKT ETF
The VanEck EMKT ETF gives investors exposure to companies across a range of emerging markets. Emerging markets (EM) are markets which are typically associated with higher average returns over 10+ years, but they (typically) come with higher risk, as measured by volatility.
With our numbers for July 2020, EMKT’s FUM stood at $29.68 million. Given it has less than $100 million invested, ask yourself (or your adviser) if the ETF is still too small (and if you should wait to buy into it). If you’re concerned the ETF might not be established enough, compare it alongside one of the other Multifactor sector ETFs, using our full list of ETFs.
Are the fees for the EMKT ETF bad?
VanEck, the ETF issuer, charges a yearly management fee of 0.69% for the EMKT ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $13.80.
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 EMKT by clicking here?
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