In this article, we’ll try to explain why the BetaShares BetaShares Global Quality Leaders ETF Currency Hedged (ASX: HQLT) and BetaShares Active Australian Hybrids Fund (Managed Fund) ETF (ASX: HBRD) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the HQLT ETF
The BetaShares HQLT ETF seeks to provide investors with exposure to a basket of 150 companies that exhibit factors which make them ‘high quality’. The HQLT is hedged to Australian dollars.
According to our most recent data, the HQLT ETF had $6.36 million of money invested. Given its funds under management (also known as FUM or ‘market cap’) is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. 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 general rule, especially if the ETF issuer/provider is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
Like the look of the HQLT ETF? Grab our ETF free investment report.
The HBRD ETF – a quick look for savvy investors
The BetaShares HBRD Fund provides investors with exposure to hybrids. Think of hybrids this way: companies can raise capital by either issuing debt or equity. Debt and equity each have different characteristics, advantages and disadvantages. Hybrid securities have some characteristics of both.
With our numbers for Oct 2020, HBRD’s FUM stood at $880.55 million. Since the HBRD’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 HBRD ETF bad?
BetaShares, the ETF issuer, charges a yearly management fee of 0.55% for the HBRD ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $11.00.
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.
The BetaShares HBRD 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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