In this article, we’ll try to explain why the SPDR S&P Emerging Markets Fund ETF (ASX: WEMG) and ETF Securities FANG+ ETF (ASX: FANG) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the WEMG ETF
WEMG invests in shares of medium and large companies listed on stock markets from approximately 20 emerging markets.
According to our most recent data, the WEMG ETF had $20.79 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.
Like the look of the WEMG ETF? Grab our ETF free investment report.
The FANG ETF – a quick look for savvy investors
The ETFS FANG ETF provides investors with exposure to the performance of the 10 most highly-traded next generation technology and tech-enabled companies listed on US stock markets. FANG adopts an equal weight strategy, meaning that it weights the shares within the portfolio equally – this differs from the more commonly used method of weighting by market capitalisation.
With our numbers for December 2020, FANG’s FUM stood at $176.28 million. Since the FANG’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 FANG ETF bad?
ETF Securities, the ETF issuer, charges a yearly management fee of 0.35% for the FANG ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $7.00.
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.
The ETF Securities FANG 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.
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