ETF alert: The IHCB ETF Vs. the RBTZ ETF

Is 2021 going to be the year to invest in ASX ETFs like the iShares Core Global Corporate Bond (AUD Hedged) ETF (ASX: IHCB) and BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)?

How an Aussie (or Kiwi!) investor can use the IHCB ETF

The iShares IHCB ETF provides investors with access to the performance of investment-grade corporate bonds across global markets and sectors, hedged into Australian dollars. This is a relatively low-cost way to get exposure to global investment-grade corporate bonds in a single fund.

According to our most recent data, the IHCB ETF had $319.11 million of money invested. With IHCB’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 Fixed interest – International 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 IHCB ETF is 0.26%. The issuer, iShares, collects this fee automatically.

Meaning, if you invested $2,000 in the IHCB ETF for a full year you could expect to pay management fees of around $5.20. 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 IHCB Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.

You can get a copy of our free investment review when click here to see the IHCB ETF report.

Key facts about the RBTZ ETF

The BetaShares RBTZ ETF provides investors with exposure to leading global companies involved in the production and utilisation of robotics and artificial intelligence – a rising global trend.

With our numbers for December 2020, RBTZ’s FUM stood at $107.54 million. Since the RBTZ’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 RBTZ ETF bad?

BetaShares, the ETF issuer, charges a yearly management fee of 0.57% for the RBTZ ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $11.40.

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.

Get the full RBTZ review available on our website by clicking this link to access our report.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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