Could now be your opportunity to place the BetaShares NASDAQ 100 ETF (ASX: NDQ) and the Vanguard MSCI Index International Shares ETF (ASX: VGS) on your ASX investing watchlist?
Why do investors own the BetaShares NASDAQ 100 ETF?
The BetaShares NDQ ETF provides investors with exposure to the performance of the 100 largest non-financial companies listed on the NASDAQ stock market, weighted by market capitalisation.
According to our most recent data, the NDQ ETF had $1246.44 million of money invested. With NDQ’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 International 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 NDQ ETF is 0.48%. The issuer, BetaShares, collects this fee automatically.
Meaning, if you invested $2,000 in the NDQ ETF for a full year you could expect to pay management fees of around $9.60. 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 NDQ Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Don’t stop here, to get our full NDQ ETF review, click through to this ETF review page now.
Vanguard MSCI Index International Shares ETF
The Vanguard VGS ETF provides exposure to listed companies from developed markets around the world, excluding Australia. This ETF is not hedged so it is exposed to currency fluctuations.
With our numbers for Oct 2020, VGS’s FUM stood at $2337.24 million. Since the VGS’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 VGS ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.18% for the VGS 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.
To discover more facts about the VGS ETF, read our free ETF investment report.
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