If you’re looking for an ASX ETF in the Australian shares sector, chances are, the Vaneck Small Companies Masters ETF (ASX: MVS) is an ETF you’re considering. Here’s what you need to know.
How ASX investors can use the MVS ETF
The VanEck MVS ETF provides exposure to a diversified portfolio of Australian small caps, with a focus on highly liquid, dividend-paying companies. This ETF tracks the MVIS Australia Small-Cap Dividend Payers Index.
The MVS ETF could be used by investors looking to invest in Australian small caps, with a focus on stocks that are paying dividends and have high levels of liquidity. Navigating away from the largest ASX companies removes a lot of the exposure to the financials sector and could diversify your Australian portfolio allocation.
The MVS ETF is yet to reach scale
The Vaneck MVS ETF had $49.77 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 Vaneck, 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.
MVS ETF fees explained
Vaneck charges investors a yearly management fee of 0.49% for the MVS ETF. This means that if you invested $2,000 in MVS for a full year, you could expect to pay management fees of around $9.80.
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.
Putting it all together
If you’re weighing up investing in MVS, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free Vaneck MVS report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the Australian shares sector to compare your options.