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(but still make lots of money)?

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Your 3-min guide to the ETF Securities ACDC ETF

The ETF Securities Battery Tech & Lithium ETF (ASX: ACDC) could be one to watch in November and in this short article, we’ll run through arguably the three most important factors to consider when you’re reviewing an ASX ETF.

What the ETF Securities ACDC ETF actually does

The ETFS ACDC ETF provides investors with passive exposure to the performance of companies involved in battery technology and lithium mining. ACDC adopts an equal weight strategy, meaning that it weights the shares within the portfolio equally – this is different from traditional index fund ETFs which invest more in the largest companies (as determined by market capitalisation).

Below $100m in FUM

The ETF Securities ACDC ETF had $18.02 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.

We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as ETF Securities, to continue to operate it.

That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.

Don’t forget ACDC’s fees

ETF Securities charges investors a yearly management fee of 0.82% for the ACDC ETF. This means that if you invested $2,000 in ACDC for a full year, you could expect to pay management fees of around $16.40.

For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.

What to do next

If you’re weighing up investing in the ACDC ETF, keep in mind that this is just a brief introduction. Indeed, before doing anything, take a look at our free ETF Securities ACDC report. And while you’re at it, consider searching our complete list of ASX ETFs for similar ETFs in the International shares sector to compare your options.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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