We think the BetaShares Nasdaq 100 ETF – Currency Hedged (ASX: HNDQ) and Schroder Investment Management Australia Limited Real Return Fund (Managed Fund) ETF (ASX: GROW) ASX ETFs could be worthy of closer inspection. Here’s why…
1. The BetaShares Nasdaq 100 ETF – Currency Hedged (ASX:HNDQ) ETF
The BetaShares Nasdaq 100 ETF invests in 100 of the largest non-financial companies listed on the NASDAQ stock exchange (i.e. the USA). This is the currency hedge version of the BetaShares NASDAQ 100 ETF (ASX: NDQ).
According to our most recent data, the HNDQ ETF had $123.67 million of money invested. With HNDQ’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 International shares 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.
Fees to consider
According to our numbers, the annual management fee on the HNDQ ETF is 0.0051. The issuer, BetaShares, collects this fee automatically.
Meaning, if you invested $2,000 in the HNDQ ETF for a full year you could expect to pay management fees of around $10.20. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.), which is the fee to buy or sell the ETF. In addition to a management fee charged by the issuer, be mindful to check the ‘spread‘ for the ETF.
A fee comparison
Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you’re looking at is too costly, compare it with other ETFs from the same sector, and against the industry average. For example, the average management fee (MER) across all of the ETFs covered by the Best ETFs Australia team was 0.51%, which is $10.20 per $2,000 invested. Keep in mind that small changes in the fees paid can make a big difference after 10 or 20 years. You should read the HNDQ Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Want to hear more about the HNDQ ETF? View our free investment review.
2. The Schroder Investment Management Australia Limited GROW ETF (ASX:GROW) ETF
The Schroder GROW Fund is a multi-asset class, actively-managed portfolio of global assets. The fund aims to deliver a return of 5% per annum above inflation (before fees), over a rolling 3-year period.
With our numbers for December 2021, GROW’s FUM stood at $66.42 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 Active ETF (e.g. ETMF) sector ETFs, using our full list of ETFs.
A look at the GROW ETF fee load?
Schroder Investment Management Australia Limited, the ETF issuer, charges a yearly management fee of 0.0083 for the GROW ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $16.60.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Want to know more? Get our team’s free GROW ETF review. Simply click here now.
