In this article, we’ll try to explain why the Vanguard Diversified Conservative Index ETF (ASX: VDCO) and BetaShares Australian Investment Grade Bond ETF (ASX: CRED) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the VDCO ETF
The Vanguard VDCO ETF provides investors with exposure to a portfolio of other Vanguard funds/ETFs. Meaning, it’s an ETF which invests only in other funds/ETFs — in this case, it only invests in funds managed by its own provider, Vanguard. This ETF gives investors exposure to multiple asset classes with a single purchase, and is designed to be a diversified portfolio in itself.
According to our most recent data, the VDCO ETF had $149.29 million of money invested. With VDCO’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 Diversified ETF 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.
Like the look of the VDCO ETF? Grab our ETF free investment report.
The CRED ETF – a quick look for savvy investors
The BetaShares CRED Fund provides investors with exposure to a portfolio a portfolio of investment-grade, fixed-rate Australian corporate bonds.
With our numbers for December 2020, CRED’s FUM stood at $469.91 million. Since the CRED’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 CRED ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.25% for the CRED ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.00.
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 BetaShares CRED 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.