Best ETF match-up: IAA Vs. AAA

Could now be your opportunity to place the BetaShares Australian High Interest Cash ETF (ASX: AAA) and the iShares S&P Asia 50 ETF (ASX: IAA) on your ASX investing watchlist?

Why do investors own the BetaShares Australian High Interest Cash ETF?

The BetaShares AAA ETF provides investors with exposure to Australian cash, without the need to open a bank account or have capital locked up in a term deposit.

According to our most recent data, the AAA ETF had $2209.07 million of money invested. With AAA’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 Cash – Australian 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 AAA ETF is 0.18%. The issuer, BetaShares, collects this fee automatically.

Meaning, if you invested $2,000 in the AAA ETF for a full year you could expect to pay management fees of around $3.60. 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 AAA Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.

Don’t stop here, to get our full AAA ETF review, click through to this ETF review page now.

iShares S&P Asia 50 ETF

The iShares IAA ETF provides exposure to the performance of 50 large, established Asian companies listed on the stock exchanges of China, Hong Kong, South Korea, Singapore, Taiwan, and Macau.

With our numbers for Oct 2020, IAA’s FUM stood at $650 million. Since the IAA’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 IAA ETF bad?

iShares, the ETF issuer, charges a yearly management fee of 0.5% for the IAA ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $10.00.

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.

To discover more facts about the IAA ETF, read our free ETF investment report.

1 ASX stock to buy RIGHT NOW...

Rask Australia's top investment analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond.

Click here or enter your email address below to access the stock code, 3,500-word analysis and founder interview. Our top expert's free investment reports are exactly that -- completely free! No gimmicks, just expert-proofed stock research and more.

Click here now to get the report.

1 ASX stock to buy RIGHT NOW...

Rask Australia's top investment analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond.

Click here to access the stock code, 3,500-word analysis and founder interview. Our top expert's investment reports are completely free with a Rask Australia account. No gimmicks, just free stock research and more.

Click here now to get the report.


Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. 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. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
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.

© Rask Australia 2020

feedback-icon

What can we do better? Please give us us some feedback :)

We care about your experience, please let us know if you have any suggestions to improve our site.