In this article, we’ll try to explain why the iShares Global High Yield Bond (AUD Hedged) ETF (ASX: IHHY) and VanEck Vectors FTSE International Property (Hedged) ETF (ASX: REIT) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the IHHY ETF
The iShares IHHY ETF provides investors with exposure to the performance of high-yield corporate bonds across global markets and sectors, hedged into Australian dollars. This is a simple way to get exposure to high-yield corporate bonds across global developed markets in a single fund.
According to our most recent data, the IHHY ETF had $77.02 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 IHHY ETF? Grab our ETF free investment report.
The REIT ETF – a quick look for savvy investors
The VanEck Vectors FTSE International Property (Hedged) ETF gives investors exposure to developed international property markets outside of Australia.
With our numbers for December 2020, REIT’s FUM stood at $71.27 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 Property sector ETFs, using our full list of ETFs.
Are the fees for the REIT ETF bad?
VanEck, the ETF issuer, charges a yearly management fee of 0.43% for the REIT ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $8.60.
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 VanEck REIT 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.