We think the WCM Quality Global Growth Fund (Quoted Managed Fund) ETF (ASX: WCMQ) and Fidelity Global Emerging Markets Fund (Managed Fund) ETF (ASX: FEMX) ASX ETFs could be worthy of closer inspection. Here’s why…
1. The WCM Quality ETF (ASX:WCMQ) ETF
The WCMQ Fund is issued by Switzer and investments are managed by WCM Investment Management. WCMQ uses an active investment approach and invests with high conviction in shares of companies that its investment team deem to be high-quality, growth-style companies.
According to our most recent data, the WCM Global Growth Fund ETF had $129.98 million of money invested. With WCMQ’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 WCMQ ETF is 1.35%. The issuer, Switzer, collects this fee automatically.
Meaning, if you invested $2,000 in the WCMQ ETF for a full year you could expect to pay management fees of around $27.00. 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 0.5%, which is $10.00 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 WCMQ 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 WCMQ ETF? View our free investment review.
2. The Fidelity FEMX ETF (ASX:FEMX) ETF
The Fidelity FEMX Fund provides investors with exposure to the performance of emerging market companies. The Fidelity Global Emerging Markets Fund is a managed fund that has been operating since 2013. It listed on the ASX in October 2018, making it easier for investors to enter and exit the fund.
With our numbers for July 2020, FEMX’s FUM stood at $76.69 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 Active ETF (e.g. ETMF) sector ETFs, using our full list of ETFs.
Are the fees for the FEMX ETF bad?
Fidelity, the ETF issuer, charges a yearly management fee of 0.99% for the FEMX ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $19.80.
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.
Want to know more? Get our team’s free FEMX ETF review. Simply click here now.