How to research the VanEck Vectors Australian Subordinated Debt ETF (ASX:SUBD)

You might be sitting back and considering the VanEck Vectors Australian Subordinated Debt ETF (ASX: SUBD) and thinking that January 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 VanEck SUBD ETF invests in a portfolio of Australian dollar-denominated subordinated bonds from a range of banks and insurance companies.
Investors could use the SUBD ETF to diversify an existing equities portfolio and gain exposure to subordinated debt, or to create a regular income stream from the monthly distributions offered by this ETF.

SUBD’s FUM meets our hurdle

The VanEck SUBD ETF had $228.24 million of money invested when we last pulled the monthly numbers. Given SUBD’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw 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 de-risks the ETF.

Pay attention to yearly costs & fees

VanEck charges investors a yearly management fee of 0.29% for the SUBD ETF. This means that if you invested $2,000 in SUBD for a full year, you could expect to pay management fees of around $5.80.

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.

Our takeaway

If you’re thinking about investing in SUBD, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free VanEck SUBD report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Fixed interest – Australia sector to do a good comparison.

[ls_content_block id=”4954″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.