Would a shrewd ASX investor consider the Betashares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20) and Morningstar International Shares Active ETF (Managed Fund) ETF (ASX: MSTR) right about now? These two ASX ETFs invest in the Australian shares and International shares sectors, respectively.
The Betashares EX20 ETF (ASX:EX20)
The BetaShares EX20 ETF provides exposure to the largest 180 Australian shares, based on market capitalisation, excluding the top 20.
According to our most recent data, the EX20 ETF had $127.45 million of money invested. With EX20’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 Australian 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 EX20 ETF is 0.25%. The issuer, Betashares, collects this fee automatically.
Meaning, if you invested $2,000 in the EX20 ETF for a full year you could expect to pay management fees of around $5.00. 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 EX20 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 EX20 ETF. To learn more about it, click through to access our free investment review.
The Morningstar MSTR ETF (ASX:MSTR)
The Morningstar MSTR Fund is an actively-managed fund that invests in a select portfolio of international companies for long-term capital growth. The fund hedges its exposure against the Australian dollar to manage currency risks.
With our numbers for Oct 2020, MSTR’s FUM stood at $90.07 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 MSTR ETF bad?
Morningstar, the ETF issuer, charges a yearly management fee of 0.39% for the MSTR ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $7.80.
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.
Before you read the Product Disclosure Statement (PDS) or speak to your financial adviser about the MSTR ETF report (both are very important), take a look at our free investment review.