It’s time to run a ruler over iShares S&P/ASX Small Ordinaries ETF (ASX: ISO) and ETF Securities Morningstar Global Technology ETF (ASX: TECH). The ETFs invest in the Australian shares and International shares sectors/industries, respectively.
The iShares ISO ETF (ASX:ISO)
The iShares ISO ETF provides exposure to 200 small cap Australian shares. This is a low-cost way to access small Australian companies through a single fund.
According to our most recent data, the ISO ETF had $98.54 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.
To learn more about the ISO ETF, read our free ETF investment report once you’re done with this article.
ETF Securities TECH ETF (ASX:TECH)
The ETFS TECH ETF provides investors with exposure to the performance of shares in around 30 undervalued competitively-advantaged global technology businesses. Think global social media companies, online or cloud-based platforms, leaders in artificial intelligence, software creators and digital advertisers.
With our numbers for Oct 2020, TECH’s FUM stood at $192.65 million. Since the TECH’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 TECH ETF bad?
ETF Securities, the ETF issuer, charges a yearly management fee of 0.45% for the TECH ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $9.00.
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.
Did you know that you get access to our free investment report on Best ETFs Australia? View the free TECH ETF report by clicking here.