It’s time to run a ruler over Montaka Montaka Global Extension Fund (ASX: MKAX) and BetaShares Active Australian Hybrids Fund (Managed Fund) ETF (ASX: HBRD). The ETFs invest in the International shares and Fixed interest – Australia sectors/industries, respectively.
The Montaka Global Extension Fund (ASX:MKAX)
The Montaka Global Extension fund is a listed managed fund which aims to offer investors exposure to long-term structural winning companies in attractive industries. Typically, the MKAX fund aims to hold 15 to 30 long positions in companies which are medium to large cap, together with 10-40 stock-specific short positions.
According to our most recent data, the MKAX ETF had $40.57 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 MKAX ETF, read our free ETF investment report once you’re done with this article.
BetaShares HBRD ETF (ASX:HBRD)
The BetaShares HBRD Fund provides investors with exposure to hybrids. Think of hybrids this way: companies can raise capital by either issuing debt or equity. Debt and equity each have different characteristics, advantages and disadvantages. Hybrid securities have some characteristics of both.
With our numbers for Oct 2020, HBRD’s FUM stood at $880.55 million. Since the HBRD’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 HBRD ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.55% for the HBRD ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $11.00.
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.
Did you know that you get access to our free investment report on Best ETFs Australia? View the free HBRD ETF report by clicking here.