On the ASX, the Vanguard Australian Government Bond Index ETF (ASX: VGB) and VanEck Vectors Emerging Income Opportunities Active ETF (Managed Fund) ETF (ASX: EBND) might be worth digging into in 2021.
What to know about the Vanguard VGB ETF
The Vanguard VGB ETF provides investors with exposure to a portfolio of Australian Commonwealth Government bonds, state government bonds and bonds from treasury corporations.
According to our most recent data, the VGB ETF had $581.34 million of money invested. With VGB’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 Fixed interest – Australia 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.
Keep learning about the VGB ETF. Click here to access our free ETF review.
The VanEck EBND ETF – key points
The VanEck EBND ETF is an actively-managed ETF which provides investors with exposure to a portfolio of bonds and currencies from a range of emerging markets.
With our numbers for December 2020, EBND’s FUM stood at $41.75 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 Active ETF (e.g. ETMF) sector ETFs, using our full list of ETFs.
Are the fees for the EBND ETF bad?
VanEck, the ETF issuer, charges a yearly management fee of 0.95% for the EBND ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $19.00.
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.
Before rushing out and investing in the EBND fund, consider searching our full ETF list to compare the fees and costs of another ETF side-by-side. Another idea might be using our website to get a free but comprehensive investment review on EBND.