Would a shrewd ASX investor consider the Vanguard Global Value Equity Active ETF (Managed Fund) ETF (ASX: VVLU) and ETF Securities FANG+ ETF (ASX: FANG) right about now? These two ASX ETFs provide exposure to the International shares sector, and aim to make investing in it as convenient as possible.
The Vanguard VVLU ETF (ASX:VVLU)
The Vanguard VVLU Fund is an actively-managed ETF which invests in small, mid and large-cap companies across global equity markets, focusing on companies which have low prices relative to fundamental measures of value.
According to our most recent data, the VVLU ETF had $21.19 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.
Fees to consider
According to our numbers, the annual management fee on the VVLU ETF is 0.28%. The issuer, Vanguard, collects this fee automatically.
Meaning, if you invested $2,000 in the VVLU ETF for a full year you could expect to pay management fees of around $5.60. 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 VVLU Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
These are high-level ideas or basics of the VVLU ETF. To learn more about it, click through to access our free investment review.
The ETF Securities FANG ETF (ASX:FANG)
The ETFS FANG ETF provides investors with exposure to the performance of the 10 most highly-traded next-generation technology and tech-enabled companies listed on US stock markets. FANG adopts an equal weight strategy, meaning that it weights the shares within the portfolio equally – this differs from the more commonly used method of weighting by market capitalisation.
With our numbers for November 2020, FANG’s FUM stood at $145 million, has grown quickly in recent months since its listing on the ASX.
Fees for FANG
ETF Securities, the ETF issuer, charges a yearly management fee of 0.35% for the FANG ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $7.00.
This management fee is below the average for all ETFs on our Best ETFs Australia list of ETFs. However, you might still be able to find a comparable ETF with lower annual fees.
Before you read the Product Disclosure Statement (PDS) or speak to your financial adviser about the FANG ETF report (both are very important), take a look at our free investment review
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Editor’s note: This article originally stated that the FANG ETF had $14.8 million of funds invested (FUM). We apologize. This was incorrect and the figure has since been updated.