How an Aussie (or Kiwi!) investor can use the MVB ETF
The VanEck MVB ETF provides focused exposure to Australia’s largest industry, the banking sector. This is a low-cost way to invest in the Australian banking industry through a single fund.
According to our most recent data, the MVB ETF had $115.35 million of money invested. With MVB’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 Australian 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.
Fees to consider
According to our numbers, the annual management fee on the MVB ETF is 0.28%. The issuer, Vaneck, collects this fee automatically.
Meaning, if you invested $2,000 in the MVB ETF for a full year you could expect to pay management fees of around $5.60. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.), which is the fee to buy or sell the ETF. In addition to a management fee charged by the issuer, be mindful to check the ‘spread‘ for the ETF.
A fee comparison
Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you’re looking at is too costly, compare it with other ETFs from the same sector, and against the industry average. For example, the average management fee (MER) across all of the ETFs covered by the Best ETFs Australia team was 0.5%, which is $10.00 per $2,000 invested. Keep in mind that small changes in the fees paid can make a big difference after 10 or 20 years. You should read the MVB Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
You can get a copy of our free investment review when click here to see the MVB ETF report.
Key facts about the VEU ETF
The Vanguard VEU ETF exposes investors to many of the largest listed companies from both developed and emerging economies around the world, excluding the US.
With our numbers for December 2020, VEU’s FUM stood at $1817.59 million. Since the VEU’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 VEU ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.09% for the VEU ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $1.80.
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.
Get the full VEU review available on our website by clicking this link to access our report.