The Betashares Geared Australian Equity Fund (Hedge Fund) ETF (ASX: GEAR) could be one to watch in June and in this short article, we’ll run through arguably the three most important factors to consider when you’re reviewing an ASX ETF.
What the Betashares GEAR ETF actually does
BetaShares GEAR Fund is an internally geared fund, investing in the largest 200 companies on the ASX, by market capitalisation.
GEAR meets our minimum FUM criteria
The Betashares GEAR ETF had $271.04 million of money invested when we last pulled the monthly numbers. Given GEAR’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Australian shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Don’t forget GEAR’s fees
Betashares charges investors a yearly management fee of 0.80% for the GEAR ETF. This means that if you invested $2,000 in GEAR for a full year, you could expect to pay management fees of around $16.00.
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.
What to do next
If you’re weighing up investing in the GEAR ETF, keep in mind that this is just a brief introduction. Indeed, before doing anything, take a look at our free Betashares GEAR report. And while you’re at it, consider searching our complete list of ASX ETFs for similar ETFs in the Australian shares sector to compare your options.