In this article, we’ll try to explain why the BetaShares Strong Australian Dollar Fund (Hedge Fund) ETF (ASX: AUDS) and iShares Core Global Corporate Bond (AUD Hedged) ETF (ASX: IHCB) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the AUDS ETF
The BetaShares AUDS Fund provides investors with geared exposure to the change in value of the Australian dollar, relative to the US dollar.
According to our most recent data, the AUDS ETF had $9.39 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.
Like the look of the AUDS ETF? Grab our ETF free investment report.
The IHCB ETF – a quick look for savvy investors
The iShares IHCB ETF provides investors with access to the performance of investment-grade corporate bonds across global markets and sectors, hedged into Australian dollars. This is a relatively low-cost way to get exposure to global investment-grade corporate bonds in a single fund.
With our numbers for Oct 2020, IHCB’s FUM stood at $345.58 million. Since the IHCB’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 IHCB ETF bad?
iShares, the ETF issuer, charges a yearly management fee of 0.26% for the IHCB ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.20.
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 cheaper ETF for less.
The iShares IHCB ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.