Don’t you wonder if now is the time to start analysing the Vanguard Ethically Conscious Global Aggregate Bond Index (Hedged) ETF (ASX: VEFI) and BetaShares Ethical Diversified Growth ETF (ASX: DGGF)? These Exchange-Traded Funds (ETFs) aim to provide exposure to the Fixed interest – International and Diversified ETF sectors, respectively.
Is the VEFI ETF a good investment? Here’s where you start…
The Vanguard VEFI ETF provides investors with exposure to high-quality debt securities issued by governments, government-owned and government-guaranteed entities, and investment-grade corporate issuers from global markets. This ethical ETF excludes issuers with significant business activities in fossil fuels, alcohol, tobacco, gambling, weapons, nuclear power, and adult entertainment.
According to our most recent data, the VEFI ETF had $37 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.
Get our team’s VEFI ETF review, available free when you click this link: access the free investment report.
A quick take of the DGGF ETF
The BetaShares DGGF ETF provides investors with a diversified portfolio of ethical assets, including shares and bonds, by screening out unethical industries and giving preference to sustainable companies.
With our numbers for December 2020, DGGF’s FUM stood at $3.78 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 Ethical sector ETFs, using our full list of ETFs.
Are the fees for the DGGF ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.26% for the DGGF ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.20.
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.
Did you know: you can get our full ETF review of DGGF by clicking here?