What the ETF Securities CORE ETF does for investors
The ETFS CORE ETF provides investors with exposure to the performance of shares from the largest infrastructure-focused companies listed on global markets, with weightings tilted towards the shares with lower volatility.
According to our most recent data, the CORE ETF had $18.16 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 CORE ETF is 0.45%. The issuer, ETF Securities, collects this fee automatically.
Meaning, if you invested $2,000 in the CORE ETF for a full year you could expect to pay management fees of around $9.00. 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 CORE Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Side note: did you know you can access our full review of the CORE ETF by clicking here?
What does the iShares ILB ETF do?
The iShares ILB ETF provides investors with exposure to the performance of a segment of the Australian bond market comprised of inflation-linked fixed income securities.
With our numbers for Oct 2020, ILB’s FUM stood at $160.09 million. Since the ILB’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 ILB ETF bad?
iShares, the ETF issuer, charges a yearly management fee of 0.18% for the ILB ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $3.60.
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.
If you want to learn more about the ILB ETF, you should know that you can access our free investment report.