You might be sitting back and considering the iShares S&P Europe ETF (ASX: IEU) and thinking that Jun could be as good of a time as any to take closer look.
What does the IEU do for a diversified portfolio?
The iShares IEU ETF provides investors with a broad exposure to leading European companies. This is a low-cost way to access a variety of European companies through a single fund.
Pay attention to FUM
The IEU ETF had $523.79 million of money invested when we last pulled the monthly numbers. Given IEU’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.
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Consider the ETF’s fees & costs
With a yearly management fee of 0.6% charged by iShares, if you invested $2,000 in the IEU ETF for a full year you could expect to pay management fees of around $12.00. For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.54% or around $10.80 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
In addition to a yearly management fee, there are other costs investors must consider, including brokerage and taxes. A specific cost for ETF and mFund investors to consider is the buy-sell spread, which is the slippage or ‘invisible’ cost paid by an investor when he or she buys or sells the ETF. For the IEU ETF, the most recent average monthly buy-sell spread we gathered (April 2020) was 0.24%. Remember, the lower (or ‘tighter’) the buy-sell spread, the better. This buy-sell spread was below the average ETF spread of 0.51%, so that’s a good thing.
Takeaway
These are just some of the considerations or factors you would need to look at when weighing up the IEU ETF. Before doing anything, take a look at our iShares IEU report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
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