You might be sitting back and considering the Schroder Investment Management Australia Limited Real Return Fund (Managed Fund) ETF (ASX: GROW) and thinking that November could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
The Schroder GROW Fund is a multi-asset class, actively-managed portfolio of global assets. The fund aims to deliver a return of 5% per annum above inflation (before fees), over a rolling 3-year period.
November
GROW’s FUM does not meet our minimum hurdle
The Schroder Investment Management Australia Limited GROW ETF had $60.31 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as Schroder Investment Management Australia Limited, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
Pay attention to yearly costs & fees
Schroder Investment Management Australia Limited charges investors a yearly management fee of 0.83% for the GROW ETF. This means that if you invested $2,000 in GROW for a full year, you could expect to pay management fees of around $16.60.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Our takeaway
If you’re thinking about investing in GROW, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free Schroder Investment Management Australia Limited GROW report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Multi-Asset sector to do a good comparison.
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