The Betashares Australian Strong Bear (Hedge Fund) ETF (ASX: BBOZ) and BetaShares Japan ETF – Currency Hedged ETF (ASX: HJPN) are two ASX ETFs worth taking a look at.
What you need to know about the BBOZ ETF
The BetaShares BBOZ Fund is designed to provide protection from a declining Australian equity market. When the S&P/ASX 200 Accumulation Index falls, BBOZ aims to generate magnified returns for investors.
As at the end of last month, the BBOZ ETF had $377.61 million of money invested. Given BBOZ’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw 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 derisks the ETF.
The yearly management fee on the BBOZ ETF is 1.38%. The issuer, Betashares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the BBOZ ETF for a full year you could expect to pay management fees of around $27.60. This does not include any performance fees, and it’s different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.). Importantly, you should also be mindful of the ‘spread’ for the ETF.
The easiest way to know if the ETF is too costly is to compare it with other ETFs in the same sector, and against the industry average. So, for context, the average management fee (MER) across all of the ETFs covered by Best ETFs Australia on our list of ASX ETFs is 0.54%, which is around $10.80 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years. What’s more, you should read the BBOZ Product Disclosure Statement (PDS) because it has the complete and updated information on all fees.
If you want to learn more about the BBOZ ETF, take a look at our ETF free investment report.
The HJPN ETF
The BetaShares HJPN ETF provides investors with exposure to leading Japanese equities, that generate most of their revenue from outside Japan. This ETF is hedged into AUD, to reduce exposure to the Japanese Yen.
At the end of April 2020, the HJPN ETF had $29.24 million of money invested, otherwise called funds under management (FUM) or ‘market cap’. With less than $100 million invested, it’s important to consider if this ETF is still too small and you should wait to buy in. If you’re worried about the size of the ETF, consider comparing it alongside some of the other Index ETFs, using our Complete List of ETFs.
BetaShares charge a yearly management fee of 0.58% for the HJPN ETF. Meaning, with $2,000 invested in the HJPN ETF for 12 months you can expect to pay management fees of around $11.60.
The management fee is above the average for all ETFs on our radar, but keep in mind the ETF may be able to justify a higher fee. Make sure you read the PDS for any other charges or costs, and take a look through our list of ASX ETFs to see if there is a lower-cost ETF on offer.
The BetaShares HJPN ETF is one for the watchlist, but if you want to access our full ETF review, simply click here to get our full report – it’s free.
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