In this article, we’ll try to explain why the iShares Treasury ETF (ASX: IGB) and Russell Investments Australian Responsible Investment ETF (ASX: RARI) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the IGB ETF
The iShares IGB ETF provides investors with diversified access to Australian government bonds with a broad range of maturities. This is a relatively low-cost way to get exposure to Australian Treasury bonds in a single fund.
According to our most recent data, the IGB ETF had $109.83 million of money invested. With IGB’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.
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The RARI ETF – a quick look for savvy investors
The Russell Investments RARI ETF invests in companies that demonstrate positive environmental, social and governance (ESG) characteristics. RARI also negatively screens out companies that have significant involvement in activities that are deemed inconsistent with responsible investment considerations.
With our numbers for December 2020, RARI’s FUM stood at $265.41 million. Since the RARI’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 RARI ETF bad?
Russell Investments, the ETF issuer, charges a yearly management fee of 0.45% for the RARI ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $9.00.
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 Russell Investments RARI 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.