Find out what the ETF does
The eInvest EIGA Fund invests in a diversified portfolio of high-yielding Australian companies and provides distributions on a monthly basis. EIGA is an actively-managed fund, with a focus on capital preservation.
The eInvest EIGA Fund could be used by investors looking for high dividend paying stocks from a broad basket of Australia’s largest public companies. EIGA aims to track the S&P/ASX 300 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) and provide long-term capital growth.
EIGA’s FUM does not meet our minimum hurdle
The Perennial Value/eInvest EIGA ETF had $30.42 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 Perennial Value/eInvest, 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.
Pay attention to yearly costs & fees
Perennial Value/eInvest charges investors a yearly management fee of 0.80% for the EIGA ETF. This means that if you invested $2,000 in EIGA for a full year, you could expect to pay management fees of around $16.00.
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.
Our takeaway
If you’re thinking about investing in EIGA, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free Perennial Value/eInvest EIGA report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Australian shares sector to do a good comparison.
