If you’re considering getting exposure to the Australian shares sector, the Perennial Value/eInvest Future Impact Small Caps Fund (Managed Fund) ETF (ASX: IMPQ) might be one ASX ETF to watch in December.
How the IMPQ ETF fits into an ASX portfolio
The eInvest IMPQ Fund provides actively-managed exposure to Australian and New Zealand-listed small caps. IMPQ also focuses on investing in companies with positive environmental, social and governance (ESG) outcomes.
IMPQ ETF is not yet at our $100m minimum FUM level
The Perennial Value/eInvest IMPQ ETF had $2.43 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 Perennial Value/eInvest, 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.
What about management fees and costs?
Perennial Value/eInvest charges investors a yearly management fee of 0.99% for the IMPQ ETF. This means that if you invested $2,000 in IMPQ for a full year, you could expect to pay management fees of around $19.80.
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.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our Perennial Value/eInvest IMPQ report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
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