Would a shrewd ASX investor consider the BetaShares Strong US Dollar Fund (Hedge Fund) ETF (ASX: YANK) and BetaShares Geared US Equity Fund Currency Hedged (Hedge Fund) ETF (ASX: GGUS) right about now? These two ASX ETFs invest in the US dollar and International shares sectors, respectively.
The BetaShares YANK ETF (ASX:YANK)
The BetaShares YANK Fund provides investors with geared exposure to the change in value of the US dollar, relative to the Australian dollar.
According to our most recent data, the YANK ETF had $11.39 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.
Fees to consider
According to our numbers, the annual management fee on the YANK ETF is 1.38%. The issuer, BetaShares, collects this fee automatically.
Meaning, if you invested $2,000 in the YANK ETF for a full year you could expect to pay management fees of around $27.60. 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 YANK Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
These are high level ideas or basics of the YANK ETF. To learn more about it, click through to access our free investment review.
The BetaShares GGUS ETF (ASX:GGUS)
The BetaShares GGUS Fund is an internally geared fund, investing in the largest 500 US-listed companies by market capitalisation.
With our numbers for Oct 2020, GGUS’s FUM stood at $44.21 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 Hedge fund sector ETFs, using our full list of ETFs.
Are the fees for the GGUS ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.8% for the GGUS ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $16.00.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Before you read the Product Disclosure Statement (PDS) or speak to your financial adviser about the GGUS ETF report (both are very important), take a look at our free investment review.