Don’t you wonder if now is the time to start analysing the Vanguard Diversified Conservative Index ETF (ASX: VDCO) and SPDR S&P/ASX Australian Bond Fund ETF (ASX: BOND)? These Exchange-Traded Funds (ETFs) aim to provide exposure to the Diversified ETF and Fixed interest – Australia sectors, respectively.
Is the VDCO ETF a good investment? Here’s where you start…
The Vanguard VDCO ETF provides investors with exposure to a portfolio of other Vanguard funds/ETFs. Meaning, it’s an ETF which invests only in other funds/ETFs — in this case, it only invests in funds managed by its own provider, Vanguard. This ETF gives investors exposure to multiple asset classes with a single purchase, and is designed to be a diversified portfolio in itself.
According to our most recent data, the VDCO ETF had $263.37 million of money invested. With VDCO’s total funds under management (FUM) figure over $100 million, the ETF meets our team’s minimum investment criteria for FUM levels. As a general rule, our team draws the line at $100 million for ETFs in the Diversified ETF sector because we believe that, relative to smaller ETFs, achieving this amount of FUM lowers the chance that the ETF issuer will close the ETF.
Get our team’s VDCO ETF review, available free when you click this link: access the free investment report.
A quick take of the BOND ETF
The name’s… the SPDR BOND ETF. BOND invests in Australian bonds which are investment grade and denominated in Australian dollars with maturities more than one year.
With our numbers for December 2021, BOND’s FUM stood at $48.99 million. Given it has less than $100 million invested, ask yourself (or your adviser) if the ETF is still too small (and if you should wait to buy into it). If you’re concerned the ETF might not be established enough, compare it alongside one of the other Index sector ETFs, using our full list of ETFs.
A look at the BOND ETF fee load?
SPDR, the ETF issuer, charges a yearly management fee of 0.0024 for the BOND ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $4.80.
This management fee is below the average for all ETFs on our Best ETFs Australia list of ETFs. However, you might still be able to find a cheaper ETF for less.
Did you know: you can get our full ETF review of BOND by clicking here?
