In this article, we’ll try to explain why the Vanguard Australian Property Securities Index ETF (ASX: VAP) and SPDR S&P/ASX Australian Bond Fund ETF (ASX: BOND) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the VAP ETF
The Vanguard VAP ETF provides investors with low-cost exposure to listed Australian property companies and real estate investment trusts (REITs).
According to our most recent data, the VAP ETF had $1568.94 million of money invested. With VAP’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.
Like the look of the VAP ETF? Grab our ETF free investment report.
The BOND ETF – a quick look for savvy investors
The name’s… the SPDR BOND ETF. BOND invests in Australian bonds which are investment grade and denominated in Australian dollars with maturities more than one year.
With our numbers for Oct 2020, BOND’s FUM stood at $49.25 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 BOND ETF bad?
SPDR, the ETF issuer, charges a yearly management fee of 0.24% for the BOND ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $4.80.
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.
The SPDR BOND ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.