How would an investor add E200 to a portfolio?
The SPDR ASX 200 ESG ETF provides investors with exposure to the largest 200 Australian/ASX-listed companies while also being tilted towards companies which exhibit strong Environmental, Social and Governance (ESG) characteristics — and E200 excludes companies in tobacoo and controversial weapons and those which earn more than 5% of their revenue from thermal coal.
According to our most recent data, the E200 ETF had $34.96 million of money invested. Given its funds under management (also known as FUM or ‘market cap’) is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this general rule, especially if the ETF issuer/provider is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
Fees to consider
According to our numbers, the annual management fee on the E200 ETF is .13%. The issuer, SPDR, collects this fee automatically.
Meaning, if you invested $2,000 in the E200 ETF for a full year you could expect to pay management fees of around $2.60. 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 E200 Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
The E200 ETF could be one to add to your watchlist. If you want to access our full ETF review, click here to get our full report – it’s totally free.
Getting to know the ESTX ETF
The ETFS ESTX ETF provides investors with exposure to 50 blue-chip companies from 12 eurozone countries; namely Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
With our numbers for July 2022, ESTX’s FUM stood at $63.78 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 ESTX ETF fee load?
Global X, the ETF issuer, charges a yearly management fee of 0.35% for the ESTX ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $7.00.
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.
Picking over ETFs seems too easy to be true: ‘just pick one and put it in your bottom-drawer’. However, it’s important to get it right the first time so that you won’t end up having to chop-and-change positions (and potentially pay extra tax). To make your life a little easier, if you’re looking at the ESTX ETF, make sure you click here to access our analyst’s investment report. It’s free.
