Could now be your opportunity to place the Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD) and the VanEck Vectors Emerging Income Opportunities Active ETF (Managed Fund) ETF (ASX: EBND) on your ASX investing watchlist?
Why do investors own the Vanguard MSCI Index International Shares (Hedged) ETF?
The Vanguard VGAD ETF provides exposure to listed companies from developed markets around the world excluding Australia. This ETF is hedged to Australian dollars to minimise the impact of currency fluctuations.
According to our most recent data, the VGAD ETF had $1374.17 million of money invested. With VGAD’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 VGAD ETF is 0.21%. The issuer, Vanguard, collects this fee automatically.
Meaning, if you invested $2,000 in the VGAD ETF for a full year you could expect to pay management fees of around $4.20. 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 VGAD 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 VGAD ETF review, click through to this ETF review page now.
VanEck Vectors Emerging Income Opportunities Active ETF (Managed Fund) ETF
The VanEck EBND ETF is an actively-managed ETF which provides investors with exposure to a portfolio of bonds and currencies from a range of emerging markets.
With our numbers for December 2020, EBND’s FUM stood at $41.75 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 Active ETF (e.g. ETMF) sector ETFs, using our full list of ETFs.
Are the fees for the EBND ETF bad?
VanEck, the ETF issuer, charges a yearly management fee of 0.95% for the EBND ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $19.00.
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.
To discover more facts about the EBND ETF, read our free ETF investment report.