ETF alert: The WVOL ETF Vs. the CRED ETF

Is 2024 going to be the year to invest in ASX ETFs like the iShares Edge MSCI World Minimum Volatility ETF (ASX: WVOL) and BetaShares Australian Investment Grade Bond ETF (ASX: CRED)?

How an Aussie (or Kiwi!) investor can use the WVOL ETF

The iShares WVOL ETF provides exposure to the performance of developed share markets that, on the whole, have lower volatility characteristics relative to the broader global developed share markets.

According to our most recent data, the WVOL ETF had $254.25 million of money invested. With WVOL’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 WVOL ETF is .3%. The issuer, iShares, collects this fee automatically.

Meaning, if you invested $2,000 in the WVOL ETF for a full year you could expect to pay management fees of around $6.00. 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 WVOL Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.

You can get a copy of our free investment review when click here to see the WVOL ETF report.

Key facts about the CRED ETF

The BetaShares CRED Fund provides investors with exposure to a portfolio a portfolio of investment-grade, fixed-rate Australian corporate bonds.

With our numbers for July 2022, CRED’s FUM stood at $445.81 million. Since the CRED’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 Index sector should be able to scale well and become profitable for the ETF issuer.

A look at the CRED ETF fee load?

BetaShares, the ETF issuer, charges a yearly management fee of 0.25% for the CRED ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $5.00.

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.

Get the full CRED review available on our website by clicking this link to access our 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.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.