Getting exposure to the Australian shares sector has never been easier thanks to ASX ETFs like the Switzer Dividend Growth Fund (Managed Fund) ETF (ASX: SWTZ). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review.
How the SWTZ ETF could be used in portfolios
The Switzer SWTZ Fund is an actively-managed fund, with the aim to provide investors with capital growth and a tax-effective income stream.
The SWTZ ETF is yet to reach our FUM target
The Switzer SWTZ ETF had $80.85 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as Switzer, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
SWTZ’s fees & costs explained
Switzer charges investors a yearly management fee of 0.89% for the SWTZ ETF. This means that if you invested $2,000 in SWTZ for a full year, you could expect to pay management fees of around $17.80.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
This is just a quick overview of the SWTZ ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the SWTZ ETF’s Product Disclosure Statement (PDS), available on the Switzer website, or speak to your financial adviser. For another handy resource, take a look at our Switzer SWTZ report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.