We think it could be time to run the rule over ETF Securities Precious Metals Basket ETF (ASX: ETPMPM) and VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT), two ASX ETFs operate in the Commodities and International shares sectors, respectively.
The ETF Securities ETPMPM ETF (ASX:ETPMPM)
The ETFS ETPMPM ETF provides investors with access to the precious metal market, by seeking to achieve a return equivalent to the movements in the spot prices of four precious metals: gold, silver, platinum, and palladium – before fees and expenses.
As at the end of last month, the ETPMPM ETF had $13.28 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 ETPMPM ETF is 0.44%. The issuer, ETF Securities, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the ETPMPM ETF for a full year you could expect to pay management fees of around $8.80. 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 ETPMPM Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
To learn more about the ETPMPM ETF, read our free ETF investment report once you’re done with this article.
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VanEck MOAT ETF (ASX:MOAT)
The VanEck MOAT ETF provides investors with exposure to a portfolio of carefully selected US companies which fit the criteria of having a sustainable competitive advantage, sometimes called a ‘moat’.
At the end of May 2020, MOAT’s FUM stood at $166.19 million. With MOAT’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 Multifactor sector should be able to scale well beyond that amount.
Are MOAT’s fees too high?
VanEck charge a yearly management fee of 0.49% for the MOAT ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $9.80.
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.
Did you know that you get access to our free investment report on ? View the free MOAT ETF report by clicking here.
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