Could now be your opportunity to place the Vanguard US Total Market Shares Index ETF (ASX: VTS) and the Betashares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20) on your ASX investing watchlist?
Why do investors own the Vanguard US Total Market Shares Index ETF?
The Vanguard VTS ETF provides investors with broad, diversified exposure to the US market. The ETF is not hedged, meaning investors are also exposed to exchange rate fluctuations.
According to our most recent data, the VTS ETF had $1917.61 million of money invested. With VTS’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 VTS ETF is 0.03%. The issuer, Vanguard, collects this fee automatically.
Meaning, if you invested $2,000 in the VTS ETF for a full year you could expect to pay management fees of around $0.60. 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 VTS 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 VTS ETF review, click through to this ETF review page now.
Betashares Australian Ex-20 Portfolio Diversifier ETF
The BetaShares EX20 ETF provides exposure to the largest 180 Australian shares, based on market capitalisation, excluding the top 20.
With our numbers for Oct 2020, EX20’s FUM stood at $127.45 million. Since the EX20’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 EX20 ETF bad?
Betashares, the ETF issuer, charges a yearly management fee of 0.25% for the EX20 ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.00.
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.
To discover more facts about the EX20 ETF, read our free ETF investment report.
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