If you’re on the hunt for exposure to the International shares sector, it could be worth adding the VanEck Vectors MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT) to your ASX watchlist. Let’s take a closer look at this VanEck ETF.
What is the EMKT ETF used for?
The VanEck EMKT ETF gives investors exposure to companies across a range of emerging markets. Emerging markets (EM) are markets which are typically associated with higher average returns over 10+ years, but they (typically) come with higher risk, as measured by volatility.
Keep an eye on FUM
The VanEck EMKT ETF had $34.96 million of money invested when we last pulled the monthly numbers. With a 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.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as VanEck, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
Fees and costs for investors
VanEck charges investors a yearly management fee of 0.69% for the EMKT ETF. This means that if you invested $2,000 in EMKT for a full year, you could expect to pay management fees of around $13.80.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the EMKT ETF. Before doing anything, take a look at our VanEck EMKT report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
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