On the ASX, the SPDR Dow Jones Global Select Real Estate Fund ETF (ASX: DJRE) and iShares S&P Global 100 ETF (ASX: IOO) are two ASX ETFs that could be worthy of closer inspection.
1. SPDR DJRE ETF (ASX:DJRE) – what you need to know
The DJRE ETF by SPDR invests in global shares/securities of listed real estate investment trusts (REITs). Investors can use these property-focused ETFs to get global exposure to a broad basket of trusts and companies exposed to property, including office spaces, commercial rental spaces and construction projects.
As at the end of last month, the DJRE ETF had $287.28 million of money invested. Given DJRE’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 International shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM derisks the ETF.
Fees & costs
The yearly management fee on the DJRE ETF is 0.5%. The issuer, SPDR, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the DJRE ETF for a full year you could expect to pay management fees of around $10.00. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.) to buy or sell the ETF. Importantly, you should also be mindful of the ‘spread‘ for the ETF.
Is the ETF too expensive?
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. The average management fee (MER) across all of the ETFs covered by Best ETFs Australia is 0.54%, which is around $10.80 per $2,000 invested. Small changes in fees can make a big difference after 10 or 20 years. To understand all of the fees, you should read the DJRE Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
If you like the sound of the DJRE ETF, view our free investment report.
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2. The basics of the iShares IOO ETF (ASX:IOO)
The iShares IOO ETF provides investors with exposure to 100 leading, multi-national companies across global share markets. This is a low-cost way to access a variety of global companies through a single fund.
At the end of April 2020, IOO’s FUM stood at $1767.04 million. With IOO’s FUM over $100 million, we say the ETF has met our minimum criteria for the total amount invested. However, in reality, a very sustainable ETF in the Index sector should be able to scale well beyond that amount.
Are IOO’s fees too high?
iShares charge a yearly management fee of 0.4% for the IOO ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $8.00.
The management fee is above the average for all ETFs on our radar, but keep in mind the ETF may be able to justify it.
To get our full DJRE ETF review, click here now.
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