On the ASX, the VanEck Vectors Australian Corporate Bond Plus ETF (ASX: PLUS) and Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) might be worth digging into in 2020.
What to know about the VanEck PLUS ETF
The VanEck PLUS ETF provides investors with exposure to a portfolio of Australian dollar-denominated bonds from investment-grade companies.
According to our most recent data, the PLUS ETF had $234.92 million of money invested. With PLUS’s total funds under management (FUM) figure over $100 million, the ETF meets our team’s minimum investment criteria for FUM levels. As a general rule, our team draws the line at $100 million for ETFs in the Fixed interest – Australia sector because we believe that, relative to smaller ETFs, achieving this amount of FUM lowers the chance that the ETF issuer will close the ETF.
Keep learning about the PLUS ETF. Click here to access our free ETF review.
The Vanguard VLC ETF – key points
The Vanguard VLC ETF provides exposure to the MSCI Australian Shares Large Cap Index. This index is a ‘free float-adjusted market capitalization index’ which provides investors with exposure to the largest companies on the ASX.
With our numbers for July 2020, VLC’s FUM stood at $106.53 million. Since the VLC’s FUM is over $100 million, our investing team would say the ETF has met our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the Index sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the VLC ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.2% for the VLC ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $4.00.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Before rushing out and investing in the PLUS fund, consider searching our full ETF list to compare the fees and costs of another ETF side-by-side. Another idea might be using our website to get a free but comprehensive investment review on PLUS.
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