How the SWTZ ETF fits into an ASX portfolio
The Switzer SWTZ Fund is an actively-managed fund, with the aim to provide investors with capital growth and a tax-effective income stream.
The SWTZ Fund could be used by investors looking for a diversified portfolio of Australian companies that have a track record of paying regular, tax-effective dividends to their shareholders.
SWTZ ETF is not yet at our $100m minimum FUM level
The Switzer SWTZ ETF had $67.73 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 Switzer, 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.
What about management fees and costs?
Switzer charges investors a yearly management fee of 0.89% for the SWTZ ETF. This means that if you invested $2,000 in SWTZ for a full year, you could expect to pay management fees of around $17.80.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our Switzer SWTZ report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
