In this article, we’ll try to explain why the Magellan Global Equities Fund Currency Hedged (Managed Fund) ETF (ASX: MHG) and Vanguard Diversified Balanced Index ETF (ASX: VDBA) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the MHG ETF
The Magellan MHG Fund is an actively-managed portfolio that invests in a select array of international companies. The fund typically selects between 20-40 global equities and hedges its exposure against the Australian dollar to manage currency risks.
According to our most recent data, the MHG ETF had $326.76 million of money invested. With MHG’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 International shares 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 MHG ETF? Grab our ETF free investment report.
The VDBA ETF – a quick look for savvy investors
The Vanguard VDBA ETF provides investors with exposure to a portfolio of other Vanguard funds. This ETF gives investors exposure to multiple asset classes with a single purchase, and is designed to be a diversified portfolio in itself.
With our numbers for December 2020, VDBA’s FUM stood at $342.92 million. Since the VDBA’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 VDBA ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.27% for the VDBA ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $5.40.
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 Vanguard VDBA 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.