The ETF Securities Physical Palladium ETF (ASX: ETPMPD) and BetaShares Global Gold Miners ETF – Currency Hedged ETF (ASX: MNRS) are two ASX ETFs worth taking a look at.
What you need to know about the ETPMPD ETF
The ETFS ETPMPM ETF provides investors with access to the precious metal of palladium, by seeking to achieve a return equivalent to the movements in the palladium spot price, before fees and expenses. Palladium comes from the same family of metals as platinum and is used in many electronic and industrial products, particularly in the automotive industry.
As at the end of last month, the ETPMPD ETF had $6.57 million of money invested. Since its funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this rule of thumb, especially if the ETF issuer/provider is committed to growing the ETF’s FUM to the point where it becomes profitable.
Fees & costs
The yearly management fee on the ETPMPD ETF is 0.49%. The issuer, ETF Securities, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the ETPMPD ETF for a full year you could expect to pay management fees of around $9.80. 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 0.5%, which is around $10.00 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 ETPMPD Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
If you want to learn more about the ETPMPD ETF, take a look at our ETF free investment report.
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The MNRS ETF
The BetaShares MNRS ETF provides investors with exposure to the performance of shares of the largest gold miners around the world, hedged into Australian dollars. This is a more indirect exposure to gold compared to physically-backed gold ETFs like GOLD and PMGOLD.
At the end of May 2020, MNRS’s FUM stood at $20.48 million. 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 sector ETFs, using our full list.
Are MNRS’s fees too high?
BetaShares charge a yearly management fee of 0.57% for the MNRS ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $11.40.
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.
The BetaShares MNRS 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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