Could now be your opportunity to place the Platinum Funds Management Asia Fund (Quoted Managed Hedge Fund) ETF (ASX: PAXX) and the Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) on your ASX investing watchlist?
Why do investors own the Platinum Funds Management Asia Fund (Quoted Managed Hedge Fund) ETF?
The Platinum PAXX Fund is an actively-managed fund that invests in a diversified portfolio of Asian companies, excluding Japan. The fund typically selects between 50-100 Asian companies that the investment team at Platinum believe to be undervalued by the market.
According to our most recent data, the PAXX ETF had $183.24 million of money invested. With PAXX’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 PAXX ETF is 1.10%. The issuer, Platinum Funds Management, collects this fee automatically.
Meaning, if you invested $2,000 in the PAXX ETF for a full year you could expect to pay management fees of around $22.00. 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 PAXX 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 PAXX ETF review, click through to this ETF review page now.
Vanguard MSCI Australian Small Companies Index ETF
The Vanguard VSO ETF provides exposure to a diversified portfolio of Australian small caps and tracks the MSCI Australian Shares Small Cap Index. This is a low-cost way to access the performance of Australian small-cap shares through a single fund.
With our numbers for December 2020, VSO’s FUM stood at $464.55 million. Since the VSO’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 VSO ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.30% for the VSO ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $6.00.
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 VSO ETF, read our free ETF investment report.
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