If you’re looking for an ASX ETF in the International shares sector, chances are, the ETF Securities ETFS Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS) is an ETF you’re considering. Here’s what you need to know.
How ASX investors can use the LNAS ETF
The ETF Securities Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS) ETF is an ETF designed to provide amplified or ‘geared’ exposure to the popular NASDAQ 100 stock market index.
The LNAS ETF could be used by investors who are seeking to add gearing to their portfolio and are willing to accept the higher risks associated with that. There are particular risks associated with geared ETFs that your financial adviser can (and should) explain to you before investing.
The LNAS ETF is yet to reach scale
The ETF Securities LNAS ETF had $22.11 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 ETF Securities, 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.
LNAS ETF fees explained
ETF Securities charges investors a yearly management fee of 1.00% for the LNAS ETF. This means that if you invested $2,000 in LNAS for a full year, you could expect to pay management fees of around $20.00.
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 LNAS, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free ETF Securities LNAS report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the International shares sector to compare your options.
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