Best ETF match-up: BOND Vs. WDMF

Could now be your opportunity to place the iShares Edge MSCI World Multifactor ETF (ASX: WDMF) and the SPDR S&P/ASX Australian Bond Fund ETF (ASX: BOND) on your ASX investing watchlist?

Why do investors own the iShares Edge MSCI World Multifactor ETF?

The iShares WDMF ETF invests in a diversified portfolio of global equities using a specific rules-based multifactor strategy. According to iShares, the four key factors used to select companies for this ETF are quality (financially healthy firms), value (inexpensive stocks), size (smaller companies) and momentum (trending stocks).

According to our most recent data, the WDMF ETF had $142.07 million of money invested. With WDMF’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 WDMF ETF is .35%. The issuer, iShares, collects this fee automatically.

Meaning, if you invested $2,000 in the WDMF ETF for a full year you could expect to pay management fees of around $7.00. 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 WDMF 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 WDMF ETF review, click through to this ETF review page now.

SPDR S&P/ASX Australian Bond Fund ETF

The name’s… the SPDR BOND ETF. BOND invests in Australian bonds which are investment grade and denominated in Australian dollars with maturities more than one year.

With our numbers for July 2022, BOND’s FUM stood at $40.31 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 BOND ETF fee load?

SPDR, the ETF issuer, charges a yearly management fee of 0.24% for the BOND ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $4.80.

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.

To discover more facts about the BOND 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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