It’s time to put BetaShares Geared US Equity Fund Currency Hedged (Hedge Fund) ETF (ASX: GGUS) and the SPDR S&P/ASX 200 Financials ex A-REITs Fund ETF (ASX: OZF) side-by-side.
Why would an investor want the own the BetaShares Geared US Equity Fund Currency Hedged (Hedge Fund) ETF?
The BetaShares GGUS Fund is an internally geared fund, investing in the largest 500 US-listed companies by market capitalisation.
As at the end of last month, the GGUS ETF had $38.53 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 GGUS ETF is 0.8%. The issuer, BetaShares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the GGUS ETF for a full year you could expect to pay management fees of around $16.00. 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 0.5%, 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 GGUS Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
Don’t stop there, to get our full GGUS ETF review, click here now.
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SPDR S&P/ASX 200 Financials ex A-REITs Fund ETF
The SPDR OZF ETF is a more unique ETF that invests in financial companies from within the ASX 200, while excluding A-REITs and other real-estate and development related companies.
At the end of May 2020, OZF’s FUM stood at $61 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 OZF’s fees too high?
SPDR charge a yearly management fee of 0.4% for the OZF 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 keep discovering what makes the GGUS ETF ‘tick’, so to speak, have a read our free ETF investment report.
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