The BetaShares Global Energy Companies ETF – Currency Hedged ETF (ASX: FUEL) and Vaneck Australian Equal Weight ETF (ASX: MVW) are two ASX ETFs worth taking a look at.
What you need to know about the FUEL ETF
The BetaShares FUEL ETF provides investors with exposure to the performance of the largest energy companies around the world, hedged into Australian dollars.
As at the end of last month, the FUEL ETF had $166.2 million of money invested. Given FUEL’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 FUEL ETF is 0.57%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the FUEL ETF for a full year you could expect to pay management fees of around $11.40. 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 FUEL 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 FUEL ETF, take a look at our ETF free investment report.
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The MVW ETF
The VanEck MVW ETF provides exposure to over 60 of the largest and most liquid Australian shares, equally weighted. By equally weighting shares, this ETF aims to reduce concentration risk in specific Australian stocks and sectors.
At the end of May 2020, MVW’s FUM stood at $1051.37 million. With MVW’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 Equal weight sector should be able to scale well beyond that amount.
Are MVW’s fees too high?
Vaneck charge a yearly management fee of 0.35% for the MVW ETF. Meaning, with $2,000 invested for 12 months you can expect to pay a base management fee of around $7.00.
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.
The Vaneck MVW 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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