The ETF Securities S&P Biotech ETF (ASX: CURE) could be one to watch in February and in this short article, we’ll run through arguably the three most important factors to consider when you’re reviewing an ASX ETF.
What the ETF Securities CURE ETF actually does
The ETFS CURE ETF provides investors with exposure to the US biotechnology sub-industry within the health care sector. CURE adopts an equally weighted strategy, which allocates greater exposure to small and mid-cap shares compared to a market capitalisation weighted approach.
CURE could be used by investors to get tactical exposure to a basket of companies within the USA’s biotechnology industry. Most biotech companies are heavily research-focused and their success can often depend on one breakthrough or regulatory approval, making it a speculative industry.
Below $100m in FUM
The ETF Securities CURE ETF had $57.73 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.
Don’t forget CURE’s fees
ETF Securities charges investors a yearly management fee of 0.45% for the CURE ETF. This means that if you invested $2,000 in CURE for a full year, you could expect to pay management fees of around $9.00.
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.
What to do next
If you’re weighing up investing in the CURE ETF, keep in mind that this is just a brief introduction. Indeed, before doing anything, take a look at our free ETF Securities CURE report. And while you’re at it, consider searching our complete list of ASX ETFs for similar ETFs in the International shares sector to compare your options.
So how can you actually invest in the CURE ETF? In the month of February 2022, you can buy the CURE ETF and get free brokerage with Pearler. All you have to do is buy and hold the ETF for 12 months! You can invest as little as $500. To buy CURE for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
