In this article, we’ll try to explain why the SPDR S&P/ASX 200 ETF (ASX: STW) and Betashares Australian Strong Bear (Hedge Fund) ETF (ASX: BBOZ) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the STW ETF
The SPDR STW ETF is Australia’s first ETF and has been operating for over 15 years. STW provides exposure to the largest 200 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
According to our most recent data, the STW ETF had $3614.72 million of money invested. With STW’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 Australian shares 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.
Like the look of the STW ETF? Grab our ETF free investment report.
The BBOZ ETF – a quick look for savvy investors
The BetaShares BBOZ Fund is designed to provide protection from a declining Australian equity market. When the S&P/ASX 200 Accumulation Index falls, BBOZ aims to generate magnified returns for investors.
With our numbers for July 2020, BBOZ’s FUM stood at $496.5 million. Since the BBOZ’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 Hedge fund sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the BBOZ ETF bad?
Betashares, the ETF issuer, charges a yearly management fee of 1.38% for the BBOZ ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $27.60.
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.
The Betashares BBOZ ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.
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