Best ETF match-up: WDIV Vs. SPY

Could now be your opportunity to place the SPDR S&P 500 Trust ETF (ASX: SPY) and the SPDR S&P Global Dividend Fund ETF (ASX: WDIV) on your ASX investing watchlist?

Why do investors own the SPDR S&P 500 Trust ETF?

The SPDR SPY ETF is the oldest ETF in the world and provides exposure to the 500 largest US-listed shares. These 500 shares represent approximately 80% of the total market capitalisation of the US stock market.

According to our most recent data, the SPY ETF had $127.84 million of money invested. With SPY’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 SPY ETF is .09%. The issuer, SPDR, collects this fee automatically.

Meaning, if you invested $2,000 in the SPY ETF for a full year you could expect to pay management fees of around $1.80. 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 0.5%, which is $10.00 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 SPY Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.

Don’t stop here, to get our full SPY ETF review, click through to this ETF review page now.

SPDR S&P Global Dividend Fund ETF

WDIV invests in shares of global companies that have a strong track record for paying dividends to their investors (i.e. they have paid a dividend for at least 10 years in a row).

With our numbers for July 2022, WDIV’s FUM stood at $340.25 million. Since the WDIV’s FUM is over $100 million, our investing team would say the ETF has met our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the Yield/income sector should be able to scale well and become profitable for the ETF issuer.

A look at the WDIV ETF fee load?

SPDR, the ETF issuer, charges a yearly management fee of 0.5% for the WDIV ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $10.00.

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.

To discover more facts about the WDIV ETF, read our free ETF investment report.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

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