We think the Betashares Australian Dividend Harvester Fund (Managed Fund) ETF (ASX: HVST) and Betashares S&P/ASX 200 Financials Sector ETF (ASX: QFN) ASX ETFs could be worthy of closer inspection. Here’s why…
1. The Betashares HVST ETF (ASX:HVST) ETF
With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.
According to our most recent data, the HVST ETF had $122.07 million of money invested. With HVST’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 HVST ETF is 0.9%. The issuer, Betashares, collects this fee automatically.
Meaning, if you invested $2,000 in the HVST ETF for a full year you could expect to pay management fees of around $18.00. 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 HVST Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Want to hear more about the HVST ETF? View our free investment review.
2. The Betashares QFN ETF (ASX:QFN) ETF
The BetaShares QFN ETF is a more unique ETF that invests in financial companies from within the ASX 200, while excluding A-REITs. This ETF has a substantial exposure to the ‘Big 4’ Australian banks.
With our numbers for Oct 2020, QFN’s FUM stood at $29.44 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 Index sector ETFs, using our full list of ETFs.
Are the fees for the QFN ETF bad?
Betashares, the ETF issuer, charges a yearly management fee of 0.34% for the QFN ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $6.80.
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.
Want to know more? Get our team’s free QFN ETF review. Simply click here now.