2 Down-Under ETFs for investors in 2024 and beyond: AASF & VAP

We think the Vanguard Australian Property Securities Index ETF (ASX: VAP) and Magellan Airlie Australian Share Fund (Managed Fund) (ASX: AASF) ASX ETFs could be worthy of closer inspection. Here’s why…

1. The Vanguard Australian Property Securities Index ETF (ASX:VAP) ETF

The Vanguard VAP ETF provides investors with low-cost exposure to listed Australian property companies and real estate investment trusts (REITs).

According to our most recent data, the VAP ETF had $2283.54 million of money invested. With VAP’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 Australian 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 VAP ETF is .23%. The issuer, Vanguard, collects this fee automatically.

Meaning, if you invested $2,000 in the VAP ETF for a full year you could expect to pay management fees of around $4.60. 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 0.5%, 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 VAP 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 VAP ETF? View our free investment review.

2. The Magellan Airlie Australian Share Fund (Managed Fund) (ASX:AASF) ETF

The Airlie Australian Share Fund invests in 15-35 companies on the Australian stock exchange using a ‘best ideas’ approach to active investing. The fund aims to have no more than 10% of its portfolio in cash. The AASF fund aims to provide long-term capital growth and regular income to their investors.

With our numbers for July 2022, AASF’s FUM stood at $336.69 million. Since the AASF’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 Active ETF (e.g. ETMF) sector should be able to scale well and become profitable for the ETF issuer.

A look at the AASF ETF fee load?

Magellan, the ETF issuer, charges a yearly management fee of 0.78% for the AASF ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $15.60.

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 AASF ETF review. Simply click here now.

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